Resource World Magazine

MINI NG AVALON RARE METALS completes feasibility study The first feasibility study on a major heavy rare earth project outside of China by Kathrine Moore Avalon Rare Metals' [AVL-TSX, NYSE MKT] 100%-owned, flagship, Nechalacho Rare Earth Element Project located at Thor Lake, Northwest Territories is one of the world's largest undeveloped rare earth elements projects. On April 17, Avalon announced the completion of a positive Feasibility Study for the project, recognized internationally for its exceptional wealth of heavy rare earths. It is the first feasibility level study to be completed on a major heavy rare earth project outside of China. The scope of the project is huge and requires the construction of four facilities: an underground mine, mill and hydrometallurgical plant in Canada and a refinery in the US. • The mine, at a proposed production rate of 2,000 tonnes per day, is relatively small by today's standards and being an underground operation means it will have a relatively small environmental footprint. The feasibility study estimates a mine life of 20 years based on 14.6 million tonnes of reserves grading 1.7% total rare earth oxides (of which 26.78% are represented by the more scarce heavy rare earths), mining the high-grade part of the Basal Zone, 200-250 metres below surface. The mine has a potential mine life of 90 years based on 65.8 million tonnes of additional Measured and Indicated resources. • The proposed mill and mine camp will be constructed near the mine. Concentrate will be trucked from the mill, 5 km to a barge landing on the shore of Great Slave Lake for transportation across the lake in the summer months. • During the 120 day transportation season the concentrate will be shipped 150 km to the proposed Pine Point hydrometallurgical plant on the south end of Great Slave Lake where two products will be produced: a mixed rare earth precipitate and an enriched zirconium concentrate. • The precipitate and concentrate will be trucked 85 km to a CN loading facility near Hay River. From there it will go by CN rail to the proposed refinery in Geismar, Louisiana where the rare earths will be sequentially separated and refined into the purities that are used in various industrial applications. President of Avalon Rare Metals, Don Bubar said, "It is about a four-year build and to keep it to that timeline we have to build as much simultaneously as possible. First of all, we have to get the work going on the mine to get underground and to get access to the ore for bulk sampling so we can start to commission the concentrator then produce enough feed to begin to commission the hydrometallurgical plant and finally the refinery." The feasibility study calls for construction to begin early 2014, 36 www.resourceworld.com contingent on having financing in place. "That's what we're working on now. $1.575 billion in estimated capital costs is a big number." Yet financing strategy, Bubar said, is "fairly straight forward. Because these are not mainstream exchange traded commodities, you have to go downstream to the consumers in the market place and get their support to build a project like this." Bubar told Resource World, "Prior to completing the feasibility study we started talking to many consumers that are interested in a source of heavy rare earths. We signed MOUs with eight different companies, six of which we are Extracting data from Avalon's wind test tower. Photo courtesy of Avalon Rare Metals. JULY 2013

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