Avnel and IAMGOLD agree exploration extension

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Status update no. 2 on Avnel's operations in south west Mali following the coup d'etat

ST. PETER PORT, Guernsey, May 15, 2012 /CNW/ - Avnel Gold Mining Limited (TSX: AVK) -

Avnel reports that it and IAMGOLD Corporation have agreed to extend the Exploration Phase under the OptionAgreement between Avnel and IAMGOLD to enter into joint venture arrangements. In terms of the Kalana Option Agreement IAMGOLD was scheduled to deliver a Resource Study during the third quarter of 2012 (subject to IAMGOLD's rights to extend the Exploration Phase for a maximum period of 12 months in specified circumstances).  It has now been agreed to extend the Exploration Phase to December 31, 2012.  A similar extension on the Fougadian Joint Venture has been agreed in principle.

Avnel and IAMGOLD share the hope that the Republic of Mali will return to a stable situation allowing full scale exploration to recommence.  The period of the extension has taken into account both the political circumstances in Mali and the onset of the rainy season in June.

IAMGOLD's Kalana exploration team continue to work on geological and resource modelling, the taking and selection of bulk samples for shipment to the SGS laboratory Lakeshore Canada for test work and ongoing analysis of the very large database that IAMGOLD have developed since the commencement of the exploration in the fourth quarter of 2009.  The large backlog of assays is also being caught up.

IAMGOLD have indicated that the Kalana project is important to it and one in which they have a major exploration investment.

The small Kalana underground mine continues to operate normally with free movement of goods, including shipment of dore.  No disruption has been experienced at the Kalana mine and there are no tensions within the surrounding communities.

Avnel has filed its MD&A and Financial Statements for the quarter ended March 31, 2012 and today issued a press release on those results.

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 Sociétéd'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.

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 Corporation have entered into a joint venture arrangements agreement whereby IAMGOLD has the option to acquire up to an initial 51% in Avnel's interest in the Kalana Exploitation Permit as well as 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 applied for an exploration permit.

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 Roy Meade (a director of the Company) who is a non-independent "Qualified Person" 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 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

Howard Miller
Chief Executive Officer
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Email: [email protected]
www.avnelgold.com 

Roy Meade
ExecutiveDirector,Technical and Operations
Phone : [phone]
Email:[email protected] 

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