Avnel Reports Metallurgical Test Program Results for Kalana Main Project in South-Western Mali

Avnel Gold Mining Limited ("Avnel" or the "Company") is announcing metallurgical test program results completed as part of a Definitive Feasibility Study ("DFS") for the Kalana Main Project in south-western Mali. The Company is also providing details on the processing plant design parameters for the DFS, which remains on track to be completed this quarter. All amounts are in United States dollars ("$") unless specified otherwise.

Highlights:

• Positive metallurgical gold recovery results with 95.6% for saprolite, 93.5% for saprock, and 93.2% for fresh rock estimated over the life of mine
• Simple conventional gravity plus CIL process plant design for processing 1.5Mtpa in saprolite and 1.2Mtpa in saprock and fresh rock
• DFS remains on track for completion by the end of the first quarter with Mineral Reserves based upon $1,000/oz gold

"I am pleased to report that the results from DFS test work programs conducted in 2015 continue to demonstrate excellent recovery rates for all material types and that the expected average recovery for saprolite material has increased to more than 95%. The increase in recovery for saprolite is expected to contribute to higher gold production at lower mining and processing costs in the initial years of the DFS's mine plan as saprolite will be the dominant ore type," stated Howard Miller, Avnel's Chairman and CEO.

"Mine engineering is nearing completion and it has been determined that a mining rate of 1.5 Mtpa in saprolite and 1.2 Mpta in saprock and fresh rock is reasonable, which has allowed us to finalise the design criteria for a simple conventional gravity plus CIL processing plant. As a result, we remain confident that the DFS will be completed by the end of first quarter of 2016. The pit design and mineral reserves will be based upon a gold price of $1,000 per ounce to reflect the current gold price environment. The impact of a higher gold price of $1,300 per ounce pit design will also be evaluated and reported as part of the DFS."

DFS Metallurgical Recovery Test Work Results

During 2015, detailed mineral processing and metallurgical test work programs were conducted at SGS Booysens in Johannesburg under the management of DRA Projects (Pty) Ltd. The results of this program confirmed a high gravity recovery component for all material types achieving bench scale gravity recoveries in the ranges of 19 - 88% for saprolite, 62 - 92% for saprock, and 57 - 96% for fresh rock material. The optimal leach feed grind size has been determined to be 80% passing 75 microns (ìm). Average cyanide and lime consumption rates were between 0.7 to 0.8 kilograms per tonne of material ("kg/t") and 0.4 to 1.2 kg/t, respectively.

Gravity recovery and cyanidation variability testing was conducted on a total of twenty saprolite, saprock, and fresh rock mineralised core samples sourced from various spatial locations within the Kalana Main deposit. A summary of the estimated life of mine ("LOM") metallurgical gold recovery by material type is presented in the following table:

1 - Metallurgical recoveries are preliminary and may be subject to revision as part of the finalisation of the DFS.

With the exception of the historic tailings, these expected rates are in-line or exceed the recovery assumptions utilized in the 2014 Preliminary Economic Assessment ("PEA"). The estimated rate for the small amount of historic tailings on site has declined to 74.8% from a prior estimate of 83%, which is not expected to materially impact project economics in the DFS.

Process Plant Design Parameters

Process Description

The processing plant design is based upon annual throughput rates of 1.5 million-tonnes-per-annum ("Mtpa") for saprolite and 1.2 Mtpa for saprock and fresh rock material. The plant design is simplistic and, as shown in Figure 1 near the end of this news release, consists of a conventional two-stage crushing circuit and a single-stage milling circuit to achieve a target grind size of 80% passing 75 microns. The milling circuit design consists of a single 5.33-metre diameter by 8.08-metre effective grinding length ball mill rated at 4.5 megawatts ("MW").

Gold is to be extracted by gravity concentration and a carbon-in-leach ("CIL") plant to produce a gold dore via elution, electrowinning, and smelting. The CIL circuit is designed for a 24-hour residence time when treating fresh ore at 1.2 Mtpa and reduces to 18 hours when treating saprolite at the higher throughput rate of 1.5Mtpa.

The design philosophy incorporates a requirement that the processing plant be constructed in a manner that would expedite the construction of the leaching and adsorption circuit with the intention of processing historic tailings prior to the hot commissioning of the mill. These tailings consist of 0.04 million ounces of Indicated Mineral Resource (0.7 million tonnes at a grade of 1.75 g/t Au) and are intended to be recovered by hydraulic mining and pumped to the plant for processing through the CIL circuit over a 5-month period. This represents an opportunity to generate pre-commercial production cash flow that could potentially partially offset development capital requirements.

Operating and capital cost estimated associated with the processing plant are underway now and will be reported as part of the DFS, which remains on track for completion by the end of the first quarter of 2016.

Qualified Persons

Mr. Roy Meade, BSc (Honours) Mining Engineering and Professional Engineer (UK), President of Avnel Gold Mining Limited is a Qualified Person as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). Mr. Meade has reviewed and approved the technical contents of this news release.

Mr. Glenn Bezuidenhout, NDT Ex. Met, FSAIMM, Process Director for DRA Projects (Pty) Ltd., is an independent Qualified Person as defined by NI 43-101. Mr. Bezuidenhout has reviewed and approved the technical contents of this news release.

Source: http://www.avnelgold.com/