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Avnel Gold Mining Limited

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Avnel Intersects 29.7 g/t Au over 11 m and 22.6 g/t over 15 m in drilling at Kalanako

SAINT PETER PORT, GUERNSEY--(Marketwired - March 9, 2017) - Avnel Gold Mining Limited ("Avnel" or the "Company") (TSX:AVK) is pleased to report new results of the 2016 Kalanako drilling programme with the receipt of the remainder of outstanding assays. The drill programme objective is to provide additional information in support of an updated Mineral Resource Estimate for its Kalanako prospect in south-western Mali, West Africa.

Located less than 3 km northeast of the Kalana Main Project proposed in the Kalana OFS-DFS, the Kalanako prospect is an old area of traditional mining activity with a March 2015 Mineral Resource Estimate of an Inferred in-situ resource of 0.07 Moz (0.38 Mt grading 5.55 g/t Au). The high-grade and close proximity makes Kalanako our highest priority advanced stage exploration target with the potential to become a high-grade open-pit supplemental satellite deposit delivering additional ore to the Kalana Main operation, which could help increase average gold production or extend the mine life.

Kalanako Drill Programme Highlights:

  • All assay have been received, updated geological model is in progress.
  • Infill drilling continues to deliver high grades over long intersections in the South-East and in the North-West Zones
  • New High-grade gold mineralization intersected in the Central and Central South and Central North Zones outside the main resource pit shells

Howard Miller, Avnel's Chairman and CEO said, "I am pleased to report that we have now received all the assays from the 2016 drilling programme successfully concluded at the Kalanako deposit. These new results from the remainder of our 2016 drill program at Kalanako are very encouraging as being essentially located outside the existing resource pits. Infill results in the North West should support the conversion of a large part of this inferred resource into Measured and indicated categories. The geological model is being updated and we are now looking forward to a new Mineral Resource Estimate in mid-April."

New Exploration Results from Kalanako Deliver Positive Results

The results reported in this news release reflect the second and third batches of assays from 60 holes over 6,447m from a total programme of 82 holes over 8,635m. These second and third batches represent nearly three-quarter of the total drill programme (holes RC226 to RC285). Maps of the general layout of the drill program, the location of individual drill holes and significant intersections is provided in figures 1 (A & B) and 2 near the end of this news release. Drill hole locations for the entire drill program, IAMGOLD's 2010 to 2012 and Avnel's 2016 drill programmes, and geophysical gradient IP are respectively presented in figures 2 and 3. Select composite assays and related drill hole information is presented in the tables at the end of this news release.

Results reported in the existing MRE pit shells (North West and South East Zones) are encouraging and should support the conversion of a large part of the Inferred Resource into Measured or Indicated categories. High grade results reported outside the existing MRE pit shells (Central and Central South and Central North Zones) provide a significant opportunity to improve known mineralisation into large portions of the bock model that were not classified as resources.

Significant intervals (>25g/t.m) from the South-East Zone (inside the main 2015 resources pit shells):

  • KO-SOM-RC230: 6.7 g/t Au over 13 m
    Including: 73.8 g/t Au over 1 m
    and: 2.4 g/t Au over 29 m
    Including: 11.6 g/t Au over 1 m and 13.9 g/t Au over 1 m
  • KO-SOM-RC231: 1.2 g/t Au over 39 m
    and: 7.3 g/t Au over 4 m
    Including: 20.6 g/t Au over 1 m
  • KO-SOM-RC232: 2.3 g/t Au over 11 m

Significant intervals (>25g/t.m) from the Central South and Central Zones (outside the main 2015 resources pit shells):

  • KO-SOM-RC236: 14.6 g/t Au over 2 m
  • KO-SOM-RC239: 4.5 g/t Au over 6 m
    Including: 20.6 g/t Au over 1 m
  • KO-SOM-RC240: 29.7 g/t Au over 11 m
    Including: 154 g/t Au over 2 m

Significant intervals (>25g/t.m) from the Central North Zone (outside the main 2015 resources pit shells):

  • KO-SOM-RC253: 22.6 g/t Au over 15 m
    Including: 155 g/t Au over 2 m
  • KO-SOM-RC254: 1.6 g/t Au over 20 m
    Including: 12.1 g/t Au over 1 m

Significant intervals (>25g/t.m) from the North West Zone (inside the main 2015 resources pit shells):

  • KO-SOM-RC261: 3.7 g/t Au over 25 m
    Including: 30.7 g/t Au over 2 m
  • KO-SOM-RC262: 3.9 g/t Au over 15 m
    Including: 12.4 g/t Au over 1 m
    and: 15.4 g/t Au over 6 m
    Including: 38.0 g/t Au over 2 m
  • KO-SOM-RC264: 6.0 g/t Au over 27 m
    Including: 15.6 g/t Au over 8 m
  • KO-SOM-RC265: 2.0 g/t Au over 15 m
    Including: 13.4 g/t Au over 1 m

Significant intervals (>25g/t.m) from the South Zone (outside the main 2015 resources pit shells):

  • KO-SOM-RC272: 1.1 g/t Au over 25 m

A summary of select composite assays and drill hole information from the 2016 drilling campaign are presented in tables 1 and 2, respectively.

Regional Exploration:

As Avnel commences construction on Kalana Main we will be accelerating our regional geology programme to progress our portfolio of exploration targets. To date, only 3 of our 30 targets have been partially drill tested, all successful. Exploration work is being conducted to evaluate and rank our premier targets.

A first group of 4 prospects (Solomanina, Tonda, Bandiala, Kodialani which is the NW extension of Kalanako) have been selected for an advanced geochemical survey. Sampling grids (5 x 5 or 10 x 10m) have been implemented to sample the rejected quartz and tailing domes produced by historical and traditional mining activities in order to localise the ore shoot inside these large prospects. 1,100 grab samples and 3,500 tailing dome samples have been collected at Solomanina, Tonda and Bandiala; 320 grab samples and 1,070 tailing dome samples from Solomanina have been assayed and QAQC validated. First results are encouraging.

Exploration and QA/QC Programmes

Exploration programmes are conducted under the supervision of Dr. Olivier Féménias, EurGeol 1115, Avnel's Vice-President, Geology. Dr. Féménias, is a Qualified Person as defined by National Instrument 43-101 of the Canadian Securities Administrators. Strict sampling and QA/QC protocol are followed, including the insertion of standards, blanks, and duplicates on a regular basis as well as laboratory visit by senior geologists. Sample intervals are usually 1.0 m. Samples are prepared on site and collected by BIGS Global Burkina SARL ("BIGS Global") and transported to Ouagadougou in Burkina Faso for analysis. Analytical method is a 2-kilogram bottle-roll cyanidation using a LeachWELL catalyst. The leach residues from all samples with a grade in excess of 0.1 g/t Au were prepared by BIGS Global and split to 50 grams and then analysed by standard Fire Assay. Composites presented in the assay results tables include intervals with a grade x thickness equal or greater than 5 grams of gold per tonne x metre ("g/t.m") with a minimum grade of 0.65 g/t Au over a 1 m minimum width with a maximum internal dilution of 3 m. No assay result was capped. Due to the exploratory nature of this programme the true width of the mineralisation has not been reported. The intersections presented herein may not represent the true width of mineralisation.

About Avnel Gold

Avnel Gold is a TSX-listed gold mining, exploration and development company with operations in south-western Mali in West Africa. The Company's focus is to develop its 80%-owned Kalana Main Project from a small underground mine into a low-cost, high-grade, open pit mining operation. The Company is also advancing exploration on several nearby satellite deposits on the 387 km2 30-year Kalana Exploitation Permit.

On January 9, 2017, the Company reported the results of an Optimized Feasibility Study ("OFS") prepared by Snowden Mining Industry Consultants. The OFS outlines an 18-year open-pit mine life at the Kalana Main Project recovering 1.82 million ounces of gold at an average "all-in sustaining cost" of $561 per ounce over the first five years of steady state production and $730 per ounce over the life of mine with an initial capital cost of $171 million. Utilising a gold price of $1,200 per ounce and a 5% discount rate, the DFS reported a net present value ("NPV") of $321 million after-tax and imputed interest, and an internal rate of return ("IRR") of 50% on a 100% project basis.

On March 30, 2016, the Company reported a Mineral Reserve estimate and the results of a Definitive Feasibility Study ("DFS") prepared by Snowden Mining Industry Consultants. The DFS outlines an 18-year open-pit mine life at the Kalana Main Project recovering 1.82 million ounces of gold at an average "all-in sustaining cost" of $595 per ounce over the first five years of steady state production and $784 per ounce over the life of mine with an initial capital cost of $196 million. Utilising a gold price of $1,200 per ounce and a 5% discount rate, the DFS reported a net present value ("NPV") of $257 million after-tax and imputed interest, and an internal rate of return ("IRR") of 38% on a 100% project basis

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained in this news release.

CAUTIONARY STATEMENTS

Forward-Looking Statements

This news release includes certain "forward-looking statements". All statements, other than statements of historical fact, included in this release, including the future plans and objectives of Avnel Gold, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that forward-looking statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Avnel Gold's expectations include, among others, risks related to international operations, the actual results of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future prices of gold and silver, as well as those factors discussed in the section entitled "Risk Factors" in Avnel Gold's most recently completed Annual Information Form, which is available on SEDAR (www.sedar.com). Although Avnel Gold has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Technical Information

Except where indicated, the disclosure contained or incorporated into this news release of an economic, scientific or technical nature, has been summarised or extracted from the National Instrument 43-101 - Standards of Disclosure for Mineral Projects("NI43-101") compliant technical report titled "NI43-101 Technical Report on Kalana Main Project", dated effective 30 March 2016 (the "Kalana Technical Report"), prepared by Snowden Mining Industry Consultants (Pty) Ltd. ("Snowden"), Denny Jones Ltd ("Denny Jones"), DRA Projects SA (Pty) Ltd ("DRA") and Epoch Resources (Pty) Ltd ("Epoch Resources"). The Kalana Technical Report was prepared under the supervision of Mr. Allan Earl (Executive Consultant - Mining Engineering of Snowden), Mr. Ivor Jones (Executive Consultant - Applied Geosciences of Denny Jones (Pty) Limited), Mr. Glenn Bezuidenhout (Principal Process Engineer of DRA), Mr. Sybrand van der Spuy (Civil Engineer of DRA), Mr. Guy Wiid (Principal Consultant -Tailings and Waste Rock Facilities of Epoch Resources), and Mr. Stephanus (Fanie) Coetzee (Principal Consultant -Environmental and Social of Epoch Resources), all of whom are independent "Qualified Persons" as such term is defined in NI 43-101. Readers should consult the Kalana Technical Report to obtain further particulars regarding the Kalana Project, which contains the Kalana Main Project, the Kalana Mine, plus a number of mineral exploration prospects. The Company filed the Kalana Technical Report in support of the Feasibility Study and the ESIA on SEDAR on May 6, 2016.

Table 1A: Kalanako Drilling (batch 2) - Select Composite Intervals
Includes intervals >5 g/t.m, cut-off of 0.65 g/t Au, maximum 3m of internal dilution, no assay are capped

Drill Hole ID   From
(m)
  To
(m)
  Interval
(m)
  Grade
(g/t Au)
  Metal
(g/t.m)
  Comment   Zone
KO-SOM-RC226                       No significant interval   Central S
KO-SOM-RC227                       No significant interval   Central S
KO-SOM-RC228   88   92   4   2.41   9.7       Central S
KO-SOM-RC229   37   44   7   3.15   22.0   inc 1m@15.1g/t   SE
KO-SOM-RC230   79   92   13   6.73   87.5   inc 1m@73.8g/t   SE
KO-SOM-RC230   97   126   29   2.36   68.4   inc 1m@11.6g/t and 1m@13.9g/t   SE
-   58   71   13   1.70   22.1       SE
KO-SOM-RC231   35   74   39   1.24   48.5       SE
-   80   84   4   7.34   29.3   inc 1m@20.6g/t   SE
-   12   13   1   7.99   8.0       SE
KO-SOM-RC232   94   105   11   2.26   24.9   inc 1m@12.1g/t   SE
-   38   47   9   0.78   7.0       SE
KO-SOM-RC233   74   78   4   3.52   14.1   inc 1m@10.1g/t   SE
KO-SOM-RC234   41   50   9   0.79   7.1   inc 4m@0.27g/t   SE
-   7   17   10   0.63   6.3   inc 4m@0.31g/t   SE
KO-SOM-RC235   6   9   3   2.73   8.2       SE
KO-SOM-RC236   46   48   2   14.62   29.2       Central S
KO-SOM-RC237                       No significant interval   Central
KO-SOM-RC238   76   80   4   1.41   5.6       Central
KO-SOM-RC239   37   43   6   4.49   26.9   inc 1m@20.6g/t   Central
-   23   30   7   1.93   13.5       Central
KO-SOM-RC240   5   16   11   29.73   327.0   inc 2m@154g/t   Central
KO-SOM-RC241                       No significant interval   Central
KO-SOM-RC242   96   106   10   1.37   13.7       Central
KO-SOM-RC242   110   120   10   0.64   6.4       Central
KO-SOM-RC243   53   77   24   0.75   17.9       Central
KO-SOM-RC244                       No significant interval   Central
KO-SOM-RC245                       No significant interval   Central
KO-SOM-RC246   64   74   10   1.16   11.6       Central
-   95   96   1   5.22   5.2       Central
KO-SOM-RC247                       No significant interval   Central
KO-SOM-RC248                       No significant interval   Central
KO-SOM-RC249                       No significant interval   Central
KO-SOM-RC250                       No significant interval   Central
KO-SOM-RC251                       No significant interval   Central N
(1) Due to the exploratory nature of this programme the true width of the mineralisation has not been reported, the intersections presented herein may not represent the true width of mineralisation.
(2) Numbers in bold represent intervals greater than 30 grams/tonne x metres (25 g/t.m)
(3) "BOH" denotes that the hole began in mineralisation
(4) "EOH" denotes that the hole ended in mineralisation

Table 1B: Kalanako Drilling (batch 3) - Select Composite Intervals
Includes intervals >5 g/t.m, cut-off of 0.65 g/t Au, maximum 3m of internal dilution, no assay are capped

Drill Hole ID   From
(m)
  To
(m)
  Interval
(m)
  Grade
(g/t Au)
  Metal
(g/t.m)
  Comment   Zone
KO-SOM-RC252                       No significant interval   Central N
KO-SOM-RC253   59   74   15   22.57   338.6   inc 2m@155.4g/t   Central N
KO-SOM-RC254   6   26   20   1.61   32.1   inc 1m@12.1g/t   Central N
-   51   62   11   1.82   20.0       Central N
KO-SOM-RC255   46   51   5   2.14   10.7       Central N
KO-SOM-RC256                       No significant interval   Central N
KO-SOM-RC257   96   107   11   1.23   13.6       Central N
KO-SOM-RC258   45   56   11   1.11   12.2       Central N
KO-SOM-RC259                       No significant interval   Central N
KO-SOM-RC260                       No significant interval   Central N
KO-SOM-RC261   98   123   25   3.72   92.9   inc 2m@30.7g/t   NW
KO-SOM-RC262   9   24   15   3.94   59.0   inc 1m@12.4g/t   NW
-   39   45   6   15.40   92.4   inc 2m@38.0g/t   NW
KO-SOM-RC263   115   124   9   1.39   12.5       NW
KO-SOM-RC264   23   50   27   5.99   161.6   inc 8m@15.6g/t   NW
KO-SOM-RC265   115   130   15   1.96   29.3   inc 1m@13.4g/t   NW
KO-SOM-RC266                       No significant interval   NW
KO-SOM-RC267                       No significant interval   NW
KO-SOM-RC268                       No significant interval   NW
KO-SOM-RC269   73   80   7   0.84   5.9       South
KO-SOM-RC270   20   25   5   4.74   23.7   inc 1m@18.6g/t   South
KO-SOM-RC271                       No significant interval   South
KO-SOM-RC272   35   60   25   1.13   28.3       South
KO-SOM-RC273                       No significant interval   South
KO-SOM-RC274                       No significant interval   South
KO-SOM-RC275                       No significant interval   SE
KO-SOM-RC276                       No significant interval   SE
KO-SOM-RC277                       No significant interval   SE
KO-SOM-RC278                       No significant interval   SE
KO-SOM-RC279                       No significant interval   SE
KO-SOM-RC280                       No significant interval   SE
KO-SOM-RC281                       No significant interval   SE
KO-SOM-RC282   80   85   5   1.22   6.1       SE
KO-SOM-RC283                       No significant interval   SE
KO-SOM-RC284                       No significant interval   SE
KO-SOM-RC285                       No significant interval   SE
(1) Due to the exploratory nature of this programme the true width of the mineralisation has not been reported, the intersections presented herein may not represent the true width of mineralisation.
(2) Numbers in bold represent intervals greater than 30 grams/tonne x metres (25 g/t.m)
(3) "BOH" denotes that the hole began in mineralisation
(4) "EOH" denotes that the hole ended in mineralisation

Table 2A: Kalanako (batch 2) - Drill Hole Collar

Hole ID   Easting (1)   Northing (1)   Length (m)   Dip (°)   Azimuth (°)   Type (2)   Line
KO-SOM-RC226   589714   1194950   67   -55   265   RCH   4950
KO-SOM-RC227   589754   1194950   75   -55   265   RCH   4950
KO-SOM-RC228   589779   1194904   103   -55   265   RCH   4900
KO-SOM-RC229   589825   1194950   145   -55   265   RCH   4950
KO-SOM-RC230   589949   1194925   130   -55   265   RCH   4925
KO-SOM-RC231   589923   1194925   97   -55   265   RCH   4925
KO-SOM-RC232   589900   1194932   140   -55   263   RCH   4925
KO-SOM-RC233   589874   1194934   115   -55   260   RCH   4925
KO-SOM-RC234   589847   1194931   135   -55   263   RCH   4925
KO-SOM-RC235   589833   1194933   115   -55   265   RCH   4925
KO-SOM-RC236   589699   1194975   78   -55   265   RCH   4975
KO-SOM-RC237   589650   1194975   145   -55   265   RCH   4975
KO-SOM-RC238   589624   1194975   105   -55   265   RCH   4975
KO-SOM-RC239   589599   1194988   60   -55   244   RCH   5000
KO-SOM-RC240   589579   1194999   93   -55   265   RCH   5000
KO-SOM-RC241   589626   1195025   99   -55   265   RCH   5025
KO-SOM-RC242   589599   1195024   160   -55   265   RCH   5025
KO-SOM-RC243   589574   1195025   120   -55   265   RCH   5025
KO-SOM-RC244   589549   1195025   81   -55   265   RCH   5025
KO-SOM-RC245   589524   1195024   50   -55   265   RCH   5025
KO-SOM-RC246   589550   1195049   117   -55   265   RCH   5050
KO-SOM-RC247   589524   1195077   130   -55   265   RCH   5075
KO-SOM-RC248   589502   1195081   93   -55   265   RCH   5075
KO-SOM-RC249   589499   1195082   63   -51   265   RCH   5075
KO-SOM-RC250   589485   1195049   69   -55   265   RCH   5050
KO-SOM-RC251   589433   1195049   91   -55   265   RCH   5050
(1) Collar coordinates in UTM Zone 29 WGS84 surveyed using a DGPS
(2) RCH = reverse circulation drill hole

Table 2B: Kalanako (batch 3) - Drill Hole Collar

Hole ID   Easting (1)   Northing (1)   Length (m)   Dip (°)   Azimuth (°)   Type (2)   Line
KO-SOM-RC252   589450   1195074   129   -55   265   RCH   5075
KO-SOM-RC253   589421   1195073   111   -55   265   RCH   5075
KO-SOM-RC254   589399   1195075   91   -59   265   RCH   5075
KO-SOM-RC255   589349   1195125   103   -55   265   RCH   5125
KO-SOM-RC256   589329   1195150   81   -59   265   RCH   5150
KO-SOM-RC257   589348   1195175   117   -55   265   RCH   5175
KO-SOM-RC258   589298   1195175   69   -55   265   RCH   5175
KO-SOM-RC259   589254   1195175   105   -55   265   RCH   5175
KO-SOM-RC260   589231   1195176   111   -55   265   RCH   5175
KO-SOM-RC261   589225   1195225   175   -55   265   RCH   5225
KO-SOM-RC262   589174   1195225   105   -55   265   RCH   5225
KO-SOM-RC263   589175   1195275   165   -55   265   RCH   5275
KO-SOM-RC264   589124   1195275   105   -55   265   RCH   5275
KO-SOM-RC265   589114   1195325   141   -55   265   RCH   5325
KO-SOM-RC266   589073   1195325   105   -55   265   RCH   5325
KO-SOM-RC267   589035   1195376   105   -55   265   RCH   5375
KO-SOM-RC268   589010   1195373   81   -55   265   RCH   5375
KO-SOM-RC269   589750   1194825   111   -55   265   RCH   4825
KO-SOM-RC270   589725   1194825   75   -55   265   RCH   4825
KO-SOM-RC271   589790   1194775   105   -55   265   RCH   4775
KO-SOM-RC272   589764   1194775   91   -55   265   RCH   4775
KO-SOM-RC273   589824   1194725   126   -55   265   RCH   4725
KO-SOM-RC274   589849   1194701   129   -55   265   RCH   4700
KO-SOM-RC275   590218   1194675   159   -55   265   RCH   4675
KO-SOM-RC276   590193   1194675   138   -55   265   RCH   4675
KO-SOM-RC277   590174   1194724   105   -55   265   RCH   4725
KO-SOM-RC278   590148   1194728   135   -55   265   RCH   4725
KO-SOM-RC279   590099   1194725   75   -55   265   RCH   4725
KO-SOM-RC280   590074   1194750   93   -55   265   RCH   4750
KO-SOM-RC281   589805   1194975   75   -55   265   RCH   4975
KO-SOM-RC282   589829   1194975   111   -55   265   RCH   4975
KO-SOM-RC283   589855   1194975   146   -55   265   RCH   4975
KO-SOM-RC284   589904   1194975   147   -55   265   RCH   4975
KO-SOM-RC285   589775   1195000   51   -55   265   RCH   5000
(1) Collar coordinates in UTM Zone 29 WGS84 surveyed using a DGPS
(2) RCH = reverse circulation drill hole

To view Figure 1A: Kalanako mineralisations, 2016 campaign and batch 2 significant intercepts (>5g/t.m), please visit the following link: https://media3.marketwire.com/docs/1088302_Fig1A.pdf

To view Figure 1B: Kalanako mineralisations, 2016 campaign and batch 2 significant intercepts (>5g/t.m), please visit the following link: https://media3.marketwire.com/docs/1088302_Fig1B.pdf

To view Figure 2: Kalanako mineralisations, drilling pattern, maiden resource pit shells and Historical Traditional mining footprint, please visit the following link: https://media3.marketwire.com/docs/1088302_Fig2.pdf

To view Figure 3: Induced Polarisation (IP) gradient map highlighting the structural location of the Kalanako prospect and the area drilled to date, please visit the following link: https://media3.marketwire.com/docs/1088302_Fig3.pdf

Avnel Gold Mining Limited
Howard Miller
Chairman and CEO
+44 207 589 9082 or UK Mobile: +44 7768 696129
Canadian Mobile: +1 (416) 726 8174
howard@hbmiller.co.uk

Avnel Gold Mining Limited
Ian McDonald
Vice-President, Corporate Development
+1 647 407 2515
imcdonald@avnelgold.com
www.avnelgold.com

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