Total expenses increased by 5% from $18,420,000 in 2012 to $19,294,000 which included an exploration expense of $910,000 mainly relating to the re-assaying of drill samples and a release of withholding tax provision for £1,005,000 relating to services to SOMIKA outside Mali . Cash costs of production for 2013 increased 6% from $1,259 /oz to $1,329 /oz mainly as a result of increased mining costs and stock adjustments.

Avnel recorded a net loss of $3,155,000 ( $0.005 attributable loss per share) for the year ended December 31, 2013 compared to a net profit of $4,786,000 ( $0.004 attributable profit per share) in the year to 31 December 2012 . Included in 2013, is an accounting finance profit on the fair value of derivative financial instruments of $1,600,000 , arising from the lapse of warrants without exercise compared to a profit of $6,318,000 in 2012.  These fair value accounting gains reported have no cash effect on the Company.

As compared to the balance sheet as at December 31, 2012 , Avnel's cash and cash equivalents as at December 31, 2013 decreased by $2,180,000 from $7,979,000 to $5,799,000 mainly as a result of cash used in operations.

There was a working capital surplus of $8,629,000 as at December 31, 2013 compared to working capital surplus of $12,226,000 as at December 31, 2012 . The working capital figures reported exclude the other derivative financial liability movements reported on the Company's balance sheet which has no cash liability to the Company.

Total assets reduced from $31,051,000 as at December 31, 2012 to $26,524,000 at December 31, 2013 .

Total stockholders' equity reduced to $31,845,000 as at December 31, 2013 from $32,750,000 at December 31, 2012 .  The retained deficit increased by $1,275,000 as a result of the net loss made in the year to December 31, 2013 .

Outlook

Following the re-assay campaign and the update of the geological model made in 2013/14, Snowden have completed a Mineral Resource Estimate (MRE) showing 1.25 million ounces of gold (8.5 million tonnes at 4.53g/t) in the Indicated Mineral Resource category, and 0.25 million ounces of gold (2.1 million tonnes at 3.76g/t) in the Inferred resources Mineral Resource category, based on a cut-off grade of 0.9g/t and a gold price of $1,110 per ounce. Snowden completed a Preliminary Economic Assessment (PEA), using the MRE, showing an after tax and imputed interest net present value (discounted at 10%) of $194 million with a 53% project internal rate of return. Avnel is examining its options to proceed with the work necessary to complete a pre-feasibility and feasibility study leading to the development of a new bulk mine at Kalana and the ongoing exploration of its 387sq.km Kalana Permit where new gold prospects at Kalanako and Djirila have been identified. A Ni 43-101 Technical Report on the Kalana deposit has been filed on March 31, 2014 .

For 2014, Avnel is planning gold production of 8,300 ounces from 53,000 tonnes of ore milled, at an average grade of 6.0g/t.  This plan is very sensitive to grade, gold price and costs.  The plan assumes that the major underground ore sources will be Veins 20, 21 and 20C. Development during the first quarter 2014 will expose new ore blocks to mine from Vein 21 and Vein 20C.  The 35,000 tonnes of underground ore will be augmented by 18,000 tonnes of lower grade ore on surface stockpiles.  The Company intends to sustain the operation as long as feasible while the exploration program progresses.  This is important to reduce the social impact on the community and to cover the costs of underground pumping.  Once underground mining operations are temporarily stopped, the mine will be placed on care and maintenance.  The underground water pumping system will remain in operation to prevent flooding of the mine and permit access for future exploration activity.

The mine plans to advance development 225 metres during 2014.  Development will focus on opening up Vein 21 and Vein 20C below the 180m level.  Dependent on results, development will continue.

It is forecast that the mineable ore available from the current underground mine infrastructure is approximately 35,000 tonnes at 6.5g/t containing 7,000 ounces.  This assumes that ongoing development of Vein 21 and Vein 20C below 180m level will be successful.  This will allow mining to average 3,500 tonnes per month to October 2014 . The surface ore stockpile is 29,000 tonnes at a grade of 5.0g/t.

The NI 43-101 Technical Report, Annual Financial Statements MD&A and Annual Information Form are available on Sedar (www.sedar.com) and the Avnel Gold website (www.avnelgold.com).

ABOUT THE COMPANYAvnel is a producing gold mining company operating the Kalana Mine in south-west Mali and is engaged in the exploration of the 30-year Kalana Exploitation Permit encompassing 387.4 sq km around and to the south of the Kalana Mine.