Avnel Gold Mining Limited - Exploration Update

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STEADY PROGRESS ON THE KALANA PROJECT WITH A REVISED AND UPDATED GEOLOGICAL MODEL AND ENCOURAGING INITIAL RESULTS FROM THE RE-ASSAY OF DRILL DUPLICATES

ST. PETER PORT, GUERNSEY, Nov. 26, 2013 /CNW/ - Avnel Gold Mining Limited ("Avnel") (TSX: AVK) is pleased to report on the status of on-going work on its 387.4 sq km Kalana Exploitation Permit and its abutting 150 sq km Fougadian Exploration Permit.

Kalana Exploitation Permit

Avnel and its consultants, Snowden Mining Consultants ("Snowden"), are currently finalising a new geological model in respect of the Kalana deposit and expects that model to be completed during Q4 of 2013. The geological model is being updated using 25,000 metres of drill hole data which was not available to IAMGOLD during Q4 of 2012 and was not incorporated into their geological model. That data became available in February 2013 enabling the re-interpretation and definition of a geological model which will likely result in the increase of the mineralised volumes.

As previously announced Avnel, together with Snowden, have selected 20,000 samples to test and quantify the influence of the coarse nuggety gold typical of the mineralisation at Kalana on grade. IAMGOLD used a conventional 50g Fire Assay protocol for the treatment of its drill samples. Snowden have advised that this protocol likely understates gold values particularly where, as they concluded, the veins carry course gold mineralisation, potentially >35% plus 100 micron based on liberated gold study and up to 75% based on Screen Fire Assay ("SFA") results. Snowden have recommended a re-assay programme using one of metallic SFA, Leachwell cyanide extraction and/or laboratory-scale gravity processing of bulk samples. The use of these protocols will reduce the sampling error inherent in the previously applied IAMGOLD sample programme.

20,000 samples have been selected for re-assay using Leachwell. In October 2013, 901 samples were submitted to the Bigs Global Laboratory in Burkina Faso for Leachwell assay. The weight of each of these samples is approximately 2-4kg. The protocol requires 2kg of each sample to be split after crushing, treated with 24 hour leaching followed by a conventional fire assay of the leach tail.

The re-assay programme is now continuing on an on-going basis with the full sample set anticipated to have been re-assayed by the end of January 2014 so that the results can be incorporated into a new database and used to undertake a mineral resource report in Q1 2014.

The initial results show the overall grade of the selected samples to have increased by 52% (uncapped). The 901 samples in respect of which results are available represent geographic and grade distribution in the different mineralised rock types and weathering zones. The results show there is a grade increase in the weathered saprolite and saprock, particularly in the higher grades. As the weathering profile at Kalana averages 70m, gold in the saprolite is an important contributor to a potential mineral resource. Historically at Kalana the mining has been limited to hard rock narrow stope vein mining with the historical results demonstrating that drill hole assay grades (standard 50g FA) underestimate the mine grades.

Management is encouraged by these early results and the programme is on-going.

In October 2013, 298 samples were submitted to SGS Metals and Mineralogy Laboratory in Johannesburg to carry out gravity and cyanidation test work. This is the same laboratory that conducted this test work with positive results in 2012. The results of this programme are expected during December 2013.

Potential grade is conceptual in nature. There has been insufficient exploration and testing to define a mineral resource, and it is uncertain if further exploration and testing will result in the target being delineated as a mineral resource.

Fougadian Exploration Permit

IAMGOLD, who have an option to enter into a JV agreement with Avnel in regard to the Fougadian Permit, is back in the field following the rainy season. A report is awaited from IAMGOLD on the results of its earlier programme and when this is obtained a press release will be issued.

Presentations

Avnel is, simultaneously with this press release, posting two presentations on its website (www.avnelgold.com) which will be used in IR presentations to market participants. The presentations posted are:

• Kalana Geology and Strategy, November 2013.
• Kalana Regional Exploration (2004 - 2012), November 2013.

ABOUT THE COMPANY

Avnel is a producing gold mining company operating the Kalana Mine in south-west Mali and is engaged in the exploration of the 30-year Kalana Exploitation Permit encompassing 387.4 sq km around and to the south of the Kalana Mine as well as on Avnel's abutting Fougadian Exploration Permit.

Avnel's principal asset is an 80% interest in Société d'Exploitation des Mines d'Or de Kalana ("SOMIKA") which is the holder of the Kalana Exploitation Permit. The Kalana Project is situate in south west Mali. The 387.4 sq km exploitation permit has a NI-43-101 compliant resource of 1,020,000 oz (at an average grade of 10.4 g/t) in the measured and indicated category, and 249,000 oz (at an average grade of 3.4 g/t) in the inferred category at January 2005. There remains approximately 826,000 ounces in the measured and indicated category due to mining depletion from 2005.

Avnel also holds the Fougadian Exploration Permit covering an area of 75 sq. km. to the south of the main Kalana Exploitation Permit area and abutting it. Avnel and IAMGOLD have entered into a joint venture arrangement agreement whereby IAMGOLD has the option to acquire up to an initial 51% in Avnel's interest in the Fougadian Exploration Permit and in an additional 75 sq. kms to the south of Avnel's Fougadian Exploration Permit area for which IAMGOLD has an exploration permit which is subject to that joint venture arrangement.

Technical Information and Qualified Person/Quality Control Notes
Information in this release arising subsequent to the date of the 2005 Snowden Technical Report regarding the Kalana Gold Mine and exploration activity is provided by Avnel management under the supervision of EurGeol Dr. Olivier Féménias, Vice President Geology and Mr. Roy Meade (a director of the Company), both of whom are non-independent "Qualified Persons" as such term is defined in National Instrument 43-101. Portions of the information are based on assumptions, qualifications and procedures which are not fully described herein.

Forward-Looking Information
This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts are forward-looking statements. Although Avnel believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include the results and timing of re-assaying the balance of the selected samples from the Kalana deposit, market prices, continued availability of capital and financing and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Avnel does not assume any obligation to update or revise its forward- looking statements, whether as a result of new information, future events or otherwise.

SOURCE Avnel Gold Mining Ltd.