Resource World Magazine

46 www.resourceworld.com a u g u s t / s e p t e m b e r 2 0 1 5 miNiNg Avnel Gold Mining Ltd. [AVK-TSX] continues to receive very good drill results from its 80%-owned Kalana Main gold project in southwestern Mali, near the border with Guinea, in West Africa. The property was the site of a Soviet-era, underground mine. As part of the current 30,000-metre drill pro- gram, recent drill hole KA-SOM-RC585 intersected 100.3 g/t gold over 10 metres in the Kalana Main. As of mid-June, the company had drilled 130 holes over 21,308 metres. Other drill program highlights include the high- grade Western extension of vein 1 being confirmed; infill and gap drilling has encountered high grades over long intersections with significant northern extensions being discov- ered. Extension and infill drilling is under way on the east and southeast portions of the deposit. "I am delighted to report that drilling, near the pit shell limits of the mineral resource, has encountered significant high-grade gold mineralization in the western portion of the deposit and new mineralization in the north. We are confident that this western drilling will support the conversion of a meaningful portion of our inferred resource into the measured and indicated catego- ries. We also expect the drilling in the north to add new in-pit resources," stated Howard Miller, Avnel's Chairman and CEO. Avnel Gold is planning a low cost, open-pit mining opera- tion. As stated in a March 2015 news release, the current mineral resource for the Kalana Main deposit consists of an indicated resource of 2.11 million ounces of gold (14.5 million tonnes grad- ing 4.52 g/t gold at a 0.9-g/t cut-off) and an inferred resource of 310,000 ounces of gold (1.8 million ounces grading 5.28 g/t gold at a 0.9-g/t cut-off). A Preliminary Economic Assessment demonstrated an after-tax NPV (10%) of $206 million with an IRR of 59% at a gold price of US $1,100/oz. Total cash costs are estimated to be $589/oz for the 14-year mine life. The pre-production capex is $147 million. Payback is two years. Avnel has a 30-year Exploitation Permit in hand. Avnel is also advancing several satellite deposits that have the potential to become part of a larger mining operation on the 387 km 2 Exploitation Permit. Results from the current drill pro- gram will be used in an updated resource estimate due out in late September of this year. The company employs 410 locals directly with significant indirect employment. The mine clinic, with one doctor and two nurses, provides community health services. Avnel has also pro- vided electric power to the local community of ~9,000 people, brought in potable water, built four schools and provided teach- ers, desks and supplies. n The drilling crew at the Kalana Main gold project in southwestern Mali, West Africa. Photo courtesy Avnel Gold Mining Ltd. avnel Gold Mining intersects high-grade gold in Mali

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