Avnel Gold Mining Limited - Kalana Project Update

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EXPECTED COMPLETION OF 8,000 METRES OF INFILL DRILLING ON THE KALANA I NORTH DOMAIN BEFORE RAINY SEASON

ST. PETER PORT, GUERNSEY, Aug. 1, 2012 /CNW/ - Avnel Gold Mining Limited (TSX: AVK) -

Avnel Gold Mining Limited ("Avnel") is pleased to report that IAMGOLD Corporation expects to complete 8,000 metres of reverse circulation holes on the Kalana I North domain ahead of the onset of the rainy season, reducing the drilling centres to 50m x 25m in that domain for the purposes of resource delineation.  The objective of the campaign is to enable IAMGOLD to prepare a Resource Study in Q4 2012 pursuant to the Option Agreement between Avnel and IAMGOLD to enter into joint venture arrangements.

The resumption of limited drilling during the extension granted to IAMGOLD on May 15, 2012 (see press release in this regard (posted on www.avnelgold.com) reflects both Avnel and IAMGOLD's confidence in the project.

It is anticipated that a further release will be issued within the next few days updating the "Kalana Project Update" released on March 12, 2012 (posted on www.avnelgold.com).

Avnel is further pleased to report that Mr. Alan McFarlane has been appointed Chief Financial Officer effective July 1, 2012.  Mr. McFarlane has served as Avnel's VP Finance for the period February 1, 2009 to June 30, 2012.  Alan has over 20 years experience in finance in the resource sector having been group accountant for Hardy Oil & Gas Plc, and thereafter VP Finance and Company Secretary for Avocet Mining Plc.

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.

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.

SOURCE: AVNEL GOLD MINING LTD.

Howard Miller
Chief Executive Officer
Phone: [phone]; Fax [phone]
UK Mobile: [phone]
Canadian Mobile: [phone]
Email: [email protected]
www.avnelgold.com

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

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Ari Todd 
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