Avnel Announces Filing of AIF and Year-End Consolidated Financial Statements and MD&A for the year ended December 31, 2015

ST. PETER PORT, GUERNSEY, March 30, 2016 - Avnel Gold Mining Limited ("Avnel" or the "Company") (TSX:AVK) is announcing that it has filed its 2015 Annual Information Form ("AIF") and its audited Consolidated Financial Statements and the related Management Discussion & Analysis ("MD&A") for the three and twelve-month periods ended December 31, 2015 on SEDAR.

Fourth Quarter 2015 Highlights:

• Announced an updated Mineral Resource estimate for the Kalana Main Project utilising a

  $1,100/oz following the completion of a drill program in support of the DFS

  
  

  Full Year 2015 Highlights:

• Commenced a definitive feasibility study for the Kalana Main Project

• Completed a brokered "bought deal" financing for gross proceeds of C$12 million

• Completed a 30,143 m drill program over 181 holes at Kalana Main

• Reported two updated Mineral Resource estimates for the Kalana Main Project

• Completed the requisite baseline field and socio-economic studies for the Kalana Main ESIA

• Commenced and completed the formal Public Participation Process for the Kalana Main ESIA

• Appointed Mr. Roy Meade as President

• Appointed Mr. Andrew King and Mr. Keith McCandlish to Avnel's Board of Directors

  
  

  Significant Events Subsequent to 2015:

  
  

• Submitted a draft ESIA and other associated documentation, including a draft Community Resettlement Action Plan for a portion of the Village of Kalana, to the Malian authorities for the development of the Kalana Main Project

• Announced the results of a positive DFS for the Kalana Main Project

• Announced an updated Mineral Resource estimate for the Kalana Main Project utilising a $1,400 per ounce gold price

2016 Outlook

The definitive feasibility study for the Kalana Main Project (the "DFS") is complete and the highlights are summarised below. As a result of completing the DFS, the Company anticipates that the Kalana Main Project will be sufficiently advanced to consider a construction decision during 2016, subject to government approval of the Environmental and Social Impact Assessment ("ESIA") and the associated Environmental and Social Management Plan ("ESMP"), and the availability of project financing.

Discussions with the Malian authorities and community members are well advanced and the Company anticipates receiving approval of the ESIA and ESMP during the second quarter of 2016. The Kalana Exploitation Permit was awarded to Avnel in 2003 with an initial term of 30 years and the

only significant government approval required to develop new mines are an ESIA and the associated ESMP.

The ESIA has been prepared to conform to the requirements of the International Finance Corporation's Performance Standards, the World Bank Group's Environmental, Health, and Safety guidelines, and other financial institutions that are signatories to the Equator Principles. The Company intends to pursue international financing for the construction of an open pit mine at Kalana Main and is actively engaged in early discussions with a number of parties in this regard. As a result of these activities, the Kalana Main Project is expected to be sufficiently advanced for the Company to consider a construction decision during 2016, subject to approval of the ESIA from the Malian authorities and the availability of project financing.

With respect to operations at the small, Soviet-era, underground Kalana Gold Mine, the Company is forecasting gold production of 8,600 ounces in 2016. Under the prevailing gold price environment, the underground mine is not profitable. The Company continues to sustain operations to partially offset the cost of providing underground access to facilitate due diligence activities necessary to secure mine development financing. The continued operation of the mine also helps to maintain socio-economic stability in the local community as the workforce prepares to transition to activities related to the construction and operation of the proposed Kalana Main Mine. The Company intends to sustain operations for as long as economically feasible, without incurring any significant capital expenditures, until such a time as the Company is able to evaluate development options for a new open-pit mining operation at Kalana Main.

The Company's Board of Directors recognise the continuing short term for working capital purposes and in the longer term to build the proposed open pit mine operations of the Company are dependent upon its ability to raise adequate financing and that funding will be required. The directors believe that the required financing will be raised and, in conjunction with management, are actively pursuing various financing options with the major shareholders and are engaged in ongoing discussions with banks, financial institutions, and other mining companies regarding proposals for financing. While these discussions are ongoing, it cannot be guaranteed that such financing will be available on a timely basis or on acceptable terms.

Kalana Main Definitive Feasibility Study

On March 31, 2016, the Company reported the results of a definitive feasibility study for the Kalana Main Project in south-western Mali (the "DFS"). The DFS reported a maiden Mineral Reserve of 1.96 million ounces of gold (21.0 million tonnes of ore at a grade of 2.80 g/t Au containing 1.92 million ounces declared) for the Kalana Main Project. The Company also reported an updated Measured plus Indicated Mineral Resource estimate of 3.06 million ounces of gold (23.0 million tonnes grading

4.14 g/t Au containing 3.06 million ounces at a 0.90 g/t Au cut-off ) for the Kalana Main deposit. The key performance indicators reported in this MD&A are based upon 100% ownership of the Kalana Main Project. The Kalana Project is owned by Société d'Exploitation des Mines d'Or de Kalana, S.A. ("SOMIKA"). Avnel has an 80% equity interest in SOMIKA and the Malian Government holds a beneficial interest in the remaining 20%, which has anti-dilution and free-carry rights.

The DFS was led by Snowden Mining Consultants Pty Ltd. ("Snowden") with the support of several leading consulting firms, all of whom have extensive experience in Mali, including Mr. Ivor Jones of Denny Jones Pty. Ltd. ("Denny Jones"), DRA Projects (Pty) Ltd. ("DRA"), and Epoch Resources. The

Kalana Project is owned by Société d'Exploitation des Mines d'Or de Kalana, S.A. ("SOMIKA"). Avnel has an 80% equity interest in SOMIKA and the Malian Government holds a beneficial interest in the remaining 20%, which has anti-dilution and free-carry rights. The key performance indicators reported in this MD&A are based upon 100% ownership of the Kalana Main Project. The results of the economic evaluation are summarised in the table below:

Summary of DFS Economic Analysis

Financial Summary Unit Value

LOM Tonnage Material Mined kt 228,795

LOM Tonnage Ore Mined kt 20,999

LOM Tonnage Ore Processed kt 21,759

LOM Feed Grade Processed g/t Au 2.80

LOM Gold Recovery % 93%

LOM Gold Production Oz Au 1,821,383

Production Period years 18.0

Pre-production Capital Costs $M 196

LOM Sustaining Capital Costs

(including mine closure and community investment)

$M 123

*Pre-Tax 8% NPV $M 266

*Post-Tax 8% NPV $M 196

Pre-Tax IRR % 44%

Post-Tax IRR % 38%

Undiscounted Payback Period years 1.2

*West African peers commonly use a 5% net present value ("NPV"), which would compute to a Pre- tax NPV of $345 million and a Post-tax NPV of $257 million.

Also included in these after-tax estimates are management fees paid to Avnel for the operation of the Kalana Main Mine (the "Mine Management Fee"). As per the Company's Operator Agreement with SOMIKA, the Mine Management Fee is calculated as 0.75% of turnover (gross revenue) and 2.5% of brut exploitation excess (or "EBE", which is equivalent to Earnings Before Interest, Taxes, and Depreciation or "EBITDA") as calculated in accordance with Le Système Comptable Ouest Africain ("SYSCOA").

Excluded from this analysis is SOMIKA's repayment of existing inter-company loans, accrued interest, and accrued Mine Management and Engineering Fees associated with the underground Kalana Gold Mine to Avnel. Avnel estimates that these amounts to approximately $115 million.

For additional information on the DFS, please refer to the Company's news release dated March 31, 2016 titled "Avnel Announces Definitive Feasibility Study Results for Kalana Main Project". The Company will file a National Instrument 43-101 Standards for Disclosure for Mineral Projects ("NI 43-101") compliant technical report in support of the DFS and the March 2016 MR on SEDAR within 45 days of this MD&A.

Selected Annual Information (In thousands of U.S. dollars, except per share amounts)

$12,024,000 in the twelve months to December 31, 2014. The decrease in revenue is primarily a result of an 8% decrease in the realised average sales price of gold from $1,262 per ounce in the twelve months to December 31, 2014 to $1,164 per ounce in the twelve months to December 31, 2015 and a 2% increase in the number of ounces of gold sold relative to the prior year.

Total expenses decreased 16% from $19,114,000 in the twelve months to December 31, 2014 to

$16,048,000 in the twelve months to December 31, 2015. The reduction in expenses is attributed to the strengthening of the US dollar relative to the West African CFA franc ("CFA") and the South African rand. Lower mining costs resulting from a reduction in underground mining production and an increase in the processing of surface stockpiles have also contributed to lower operating expenses. Exploration costs expensed was $260,000 in the twelve months to December 31, 2015 compared to $342,000 in the twelve months to December 31, 2014. Operating costs per ounce of gold sold for the twelve months to December 31, 2015 decreased 19% to $1,073 per ounce from

$1,325 per ounce in the prior year, which is attributable to lower operating costs in the current period that was partially offset by lower gold sales relative to the comparative period.

Avnel recorded a net loss of $2,848,000 ($0.004 attributable loss per share) for the twelve months ended December 31, 2015 compared to a net loss of $10,296,000 ($0.038 attributable loss per share) in the prior year. Included in the twelve months to December 31, 2015 is a gain on the fair value of derivative financial instruments of $2,166,000, compared to a loss of $2,901,000 in the twelve months of 2014, arising from a change in the fair value of warrants outstanding. Fair value accounting gains and losses reported have no cash effect on the Company.

As compared to the consolidated statement of financial position as at December 31, 2014, Avnel's cash and cash equivalents as at December 31, 2015 decreased by $498,000 to $7,211,000. The reduction is the result of exploration and evaluation expenditures of $6,041,000 and cash used in operations of $2,938,000 that was offset by cash provided by a financing in May 2015 for net proceeds $8,931,000. As at December 31, 2015 the Company had a working capital surplus of