The Kalana Project is located in southwestern Mali, near the border with Guinea, in West Africa. The project is approximately 270 km south of the City of Bamako, Mali’s capital city, and is accessed via a sealed highway for the initial 220km and then by a maintained secondary road. There is an international airport at Bamako with daily flights to many European and African countries.
In addition to easy road access, the project site is powered by the national hydroelectric power grid and there is modern telecommunications in the area. There is also an abundant water supply, which is a critical consideration for many mining projects in Africa (and around the world). The topography is flat savannah, which is also conducive for building a new mining operation.
The Kalana Project consists of a large and unique exploitation and exploration permit (the “Kalana Permit”) that covers an area of 387 km2. The Soviet-era Kalana Underground Mine accounts for an area of about 2 km2 on the northern end of the Kalana Permit.
Further, the local community is eager to see an open-pit mine constructed as our small underground mine is the largest single direct employer in the region.
Although the current mine cost per ounce of gold produced exceeds current gold prices, it is strategic to maintain underground access for exploration and minimize the impact of any mine closure on the surrounding communities. It is Avnel Gold’s preferred option to continue underground operations as long as it is reasonably possible and to move from an underground operation to a potential open pit operation with as little disruption to the company and the community.
The Kalana Permit is held by SOMIKA, which is 80% owned subsidiary of Avnel Gold with the Malian Government holding a free carried 20% equity interest that has anti-dilution provisions.