Resource World Magazine

j u n e / j u l y 2 0 1 4 www.resourceworld.com 37 Avalon Rare Metals Inc. [AVL-TSX; NYSE MKT] has received its Class A Land Use Permit from the Mackenzie Valley Land and Water Board (MVLWB) to start pre-construction work at its 100%- owned Nechalacho Rare Earth Elements Project at Thor Lake, 100 km southeast of Yellowknife, Northwest Territories, Canada. The deposit is exceptional in its large size and enrichment in scarce heavy rare earth elements. The deposit also hosts niobium, tantalum and zirconium. The permit will enable the company to begin, in a phased approach, low impact activities such as work on site preparation, camp construction, portal development, roads, power and water treatment facili- ties. Avalon anticipates that a Class B Water License will be issued in the near future, which will allow the taking of water and deposition of waste as part of later phases of the proposed work program. Donald Bubar, President and CEO, said, "The receipt of this land use permit rep- resents another milestone in the ongoing development of the Nechalacho Project. This permit allows us to proceed with the work necessary in 2014 to keep the project on schedule to achieve commer- cial operations by 2017/2018. Realizing this goal will ultimately depend on when all project financing is in place. Certainly, timely receipt of all necessary permits and licenses helps mitigate perceived invest- ment risk." The application process is continuing for securing full construction and operations permits by early 2015. Mark Wiseman, Avalon's Vice-President, Sustainability, said, "Based on the co-operative approach and responsiveness experienced to date with the MVLWB staff, we do not antici- pate any significant delays in achieving this goal." On March 3, Avalon reported that it had entered into a tolling agreement for Solvay to process rare earth concentrate into pure rare earth oxides for an expected 10 years from the start of deliveries to Solvay's rare earth separation and refin- ing plant located in La Rochelle, France. Solvay will immediately provide Avalon with technical support for the further design optimization, engineering and com- missioning of Avalon's hydrometallurgical processing plant. Avalon will ship a concentrate to La Rochelle containing 98.5% rare earth oxide (REO) and Solvay will return separated oxides of praseodymium (Pr), neodymium (Nd), europium (Eu), gadolin- ium (Gd), terbium (Tb), dysprosium (Dy), lutetium (Lu) and yttrium (Y), ranging in purity from 99.5% to 99.99%. Under the tolling agreement Solvay can purchase selected REOs from Avalon. All rare earth products not purchased by Solvay will be sold by Avalon and delivered directly from the La Rochelle plant. Bubar said, "We are pleased to have a highly experienced rare earth refiner like Solvay as a strategic partner. This tolling agreement greatly reduces the technical risk and costs associated with building, commissioning and operating a dedicated REE refinery for the Nechalacho Project, making the whole project a less risky and more attractive investment opportunity. In addition, this reduces the potential for delays in initial product deliveries." Avalon is continuing its feasibility study optimization work and will now integrate the Solvay Tolling Agreement into the project development model. Avalon will now focus on producing an updated technical report that incor- porates results of the recent optimization work. Other goals for 2014 include com- pleting land use permit applications for construction, carrying out additional pilot plant trials of the new hydrometallurgical plant flowsheet needed to finalize detailed plant designs and engineering, securing commitments on off-take and arranging project financing. Commencing December 31, 2014, Solvay will have certain termi- nation rights until project financing is achieved. n MINING AvALoN RARe MeTALS receives land use permit for rare earths mine Avalon rare Metals' nechalacho campsite at Thor Lake, northwest Territories. Courtesy Avalon rare Metals Inc.

• Cover