Avnel Mali SARL, a 100% owned subsidiary of Avnel Gold Mining Limited, has entered  into an agreement with the Government of the Republic of Mali related to the Fougadian Permit, Yanfolila District, Sikasso Region, Mali. The Foundation Agreement  provides for the exploration and exploitation of Group 2 minerals as defined in the 1999 Mineral Code. Group 2 minerals includes gold and silver, base metals but excludes precious stones, semi- precious stones and fossils

The Fougadian Permit covers an area of 150 square kilometres directly south of the Kalana Exploitation Permit (see Fig 1). Avnel is obliged to incur expenditures of at least $310,000 in the first year after the award of the permit. The exploration permit is valid for a period of three years, renewable once without surface area reduction. The renewal becomes a right, provided that Avnel has complied with all obligations stipulated in the 1999 Mining Code. The Foundation Agreement grants Avnel the exploitation rights for a period of 30 years and sets out the fiscal, economic and customs regime as stipulated in the 1999 Mining Code and the fiscal law of Mali. The State as a shareholder is entitled to a 10% free carried interest. If the capital of the company is increased, the State will be entitled to maintain its 10% free carried interest. The State has the right to purchase an additional 10% interest on commercial terms

The State has incurred expenditure of $1,360,000 on the permit and it has been agreed that this will be refunded in a manner to be agreed by the two parties.

The permit was covered by the Or-Bagoe soil geochemistry program completed in 1988. Samples were collected from E-W lines spaced 1 kilometer apart with 200m spacing in an E-W direction. The survey identified several gold anomalies

Phase 1 Exploration Program April 2006-June 2007 Field activities of the Phase I soil geochemistry exploration programme within the Fougadian Exploration Permit were accomplished in three different periods from March 2006 to May 2007. A total of 8,241 soil samples (including 468 controls) were collected along E-W oriented lines spaced 200 meters apart (N-S) with sample spacing of 50 meters in an E-W direction. All samples were sieved at -80 mesh in the preparation laboratory installations. A 30 gram sub-sample was analysed for gold (fire assay) and another 0.5 gram sub-sample for a 35 multi-element suite (ICP-AES) that includes arsenic, copper and potassium. Parallel to the sampling programme, three other studies have been initiated: an inventory of the orpaillage sites present within the permit; a regolith study; and an interpretation of the SYSMIN airborne geophysical survey. The processing of data from chemical analyses and the calculated statistical parameters (higher percentiles) have resulted in various single-element, colour-contoured maps. Numerous significant gold anomalous clusters have been delineated and grouped into 14 anomalies (Avnel-1 to Avnel-14). It was observed that these 14 gold anomalies were located along three major mineralised corridors. Two of these corridors are subparallel, strike approximately N-S and can be traced nearly continuously through the length of the property. The third corridor strikes NNE-SSW and passes through the southeastern and northeastern quadrants of the licence. The distribution of the anomalies in each corridor is shown in Fig 2:

• Six anomalies are present in the western N-S mineralised corridor: Avnel-5, Avnel‑6, Avnel-7, Avnel-8, Avnel-9 and Avnel-10;
• Five anomalies are present in the central N-S mineralised corridor: Avnel-1, Avnel-2, Avnel-3, Avnel-4 and Avnel-11;
• Three anomalies are present in the NNE-SSW mineralised corridor: Avnel-12, Avnel-13 and Avnel-14.

The study of the different characteristics of the delineated anomalies has led to the following observations:

• The Avnel-1 anomaly stands out from the other anomalous clusters by the large number of high gold, arsenic, potassium and copper anomalous values, by the size of the area delineated, the number of anomalous values, and by the linear internal patterns created by the higher gold values suggestive of several structurally controlled mineralised zones.
• Of the relatively large number of interesting and significant gold-in-soil anomalies, the majority of them have the potential to become future drill targets.
• Significant orpaillage sites are associated with many of the more significant gold anomalies, some of them being located in stream channels, while others are clearly developed on in situ regolith units.
• The anomalies present in the western N-S mineralised corridor are located close to the litholigical contact between the batholith-sized granitoid body to the west and the Birimian metasediments to the east. Their position within a possible thermal-structural aureole is reminiscent of the depositional site at the Morila Deposit (Thermal Aureole Gold systems associated with contact metamorphic deposits).
• The anomalies present in the central N-S mineralised corridor, as well as the anomalies present in the NNE-SSW mineralised corridor of the southeastern and northeastern quadrants, could be more related to quartz vein type deposits such as the Kalana Deposit (distinct linear bands of high gold values, as well as an increase in arsenic are observed within the main anomalies of the central N-S mineralised corridor).

A regolith study has been undertaken in Q2 of year 2007 over the Fougadian Permit by Mineral Corporation, and a report presented to Avnel: Reconnaissance Geological Mapping of the Fougadian Exploration Permit, Mali. No bedrock outcrop was found in the area of the Fougadian Permit and attention has been focused on producing a reconnaissance regolith map from geophysical, geochemical and topographic data with limited field traverses. This work has shown that a complete lateritic regolith is preserved in the western part of the license area. This regolith has been incised and eroded by a series of streams flowing from west to east leaving some lateritic residuum on the intervening ridges. The valleys are floored with alluvium. Intervening valley slopes are covered by grey soil that is thought to be underlain by a mottled zone horizon. The possible presence of a ferricrete horizon occurring in the area and a stone-line in the regolith are two problems identified by the study that have yet to be resolved.

The results of the regolith study prepared by Mineral Corporation, like the geophysical interpretation, will be integrated into the geochemical study in a future report. A follow-up field exploration programme is recommended in order to evaluate the potential of the numerous significant gold anomalies. This programme may include IP ground geophysical surveys and subsequent RC drill campaigns.

Date	Exploration Document	Download Options
October 16th, 2007	Fougadian Phase II Proposed Drilled Program, Fougadian Exploration Permit Area
October 16th, 2007	Compilation, Processing and Interpretation of Existing Geophysical Data over the Kalana Exploitation and Fougadian Exploration Permits, Mali
October 16th, 2007	Reconnaissance Geological Mapping of the Fougadian Exploration Permit, Mali
July 22nd, 2007	Technical Report - Fougadian Phase 1 2006 - 2007 Geochemical Soil Sampling Programme
July 18th, 2007	Avnel Gold announces Exceptional Soil Geochemistry Results at its Fougadian Exploration Permit