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Avnel Gold Mining Limited (“Avnel” or the “Company”) was incorporated under the laws of Guernsey on February 18, 2005. The Company’s registered and records office is at Carey Olsen, 22 Smith Street, St. Peter Port, Guernsey, Channel Islands, GY1 2JQ. The Company does not currently have a principal place of business in Canada. Subsidiaries of the Company maintain corporate offices at London, England and Bamako, Mali.
Avnel was established for the purpose of becoming the holding company for, and to carry on the business of, Avnel Gold, Limited (“Avnel Cayman”), a corporation incorporated under the laws of the Cayman Islands, pursuant to a reorganization completed on February 22, 2005 (the “Reorganization”).
In connection with the Reorganization, Elliott Associates L.P., Elliott International L.P. (collectively, “Elliott”) and the Fern Trust (“Fern”) received common shares of Avnel representing 100% of the issued and outstanding shares of Avnel in exchange for shares in the capital of Avnel Cayman, representing 95% of the issued and outstanding shares of Avnel Cayman at the date of the Reorganization, pursuant to the terms of a reorganization agreement dated February 22,2005 (the “Reorganization Agreement”) among Avnel, Avnel Cayman, Elliott and Fern. In addition, obligations of Avnel Cayman to Elliott and Fern in respect of existing shareholder loans of Avnel Cayman (the “Elliott and Fern Loans”) have been assumed by Avnel pursuant to the Reorganization Agreement.
In addition, Avnel, Elliott and Fern have entered into a transfer agreement (the “Transfer Agreement”) and call option agreement (the “Call Option Agreement”) with a former shareholder of Avnel Cayman (the “Minority Shareholder”), pursuant to which Avnel purchased for cancellation from the Minority Shareholder the remaining 5% of ordinary shares of Avnel Cayman outstanding for $5,000, and Elliott and Fern and Avnel granted to the Minority Shareholder a call option on shares of Avnel held by Elliott and Fern and a warrants to purchase common shares and shareholder loans of Avnel. Under the Transfer Agreement, shareholder loans owed by Avnel Cayman (subsequently assumed by Avnel) to the Minority Shareholder in the amount of $725,000 (“the Minority Shareholder Loans”) were acquired by Elliott and Fern.
Avnel and its Subsidiaries
Avnel is the holding company for Avnel Cayman and the subsidiaries thereof which own and operate the Kalana Gold Mine and Concession and hold rights to the Kalana exploration and exploitation permit (“the Permit”).
Avnel Cayman, a wholly-owned subsidiary of Avnel, is itself a holding company whose principal asset is an 80% interest in SOMIKA. Pursuant to an operatorship agreement, Avnel Cayman earns fees as the operator and manager of SOMIKA’s mining and exploration activities.
Kalana Mine Services Limited, a subsidiary of Avnel Cayman, provides certain management services in respect of the Kalana Gold Mine.
Avnel Mali is Avnel’s corporate representative entity in Mali, as is required under the terms of the Foundation Agreement.
SOMIKA is the principal operating company within the Avnel group, and is the holder of the Permit and owner and operator of the Kalana Gold Mine and Concession.
The following diagram sets out the intercorporate relationships between the Company and its subsidiaries following completion of the Reorganization:
Source: Final Prospectus May 27,2005
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