NEWS RELEASE
November 26, 2012 No. 12-12
Avalon Reports Increased Measured Resources for the
Nechalacho Rare Earth Elements Deposit, Thor Lake, NWT, Canada
Toronto, ON -- -- -- -- Avalon Rare Metals Inc Avalon Rare Metals Inc Avalon Rare Metals Inc Avalon Rare Metals Inc . . . . (TSX and NYSE MKT : AVL) (“Avalon” or the “Company”) is pleased to announce an updated resource estimate for the Nechalacho Rare Earth Elements Deposit, Thor Lake, NWT (the “Nechalacho Deposit”) which is effective as of November 21, 2012.
The estimate, prepared by Avalon geologists and ind ependently audited by Roscoe Postle Associates Inc. (“RPA”), is based on the assays fro m all drilling completed up to August 27, 2012.
The updated resource estimate further increases min eral resources in the Nechalacho Deposit at the key Measured level of confidence.
The updated NI 43-101 technical report prepared by RPA, dated August 25, 2011(the “RPA Technical Report”), recommended preparation of a mi ne plan for the Basal Zone part of the Nechalacho Deposit. This resource estimate for the Basal Zone (Table 1) will serve as the basis for the mine plan and reserves estimate in the Feas ibility Study (“FS”) currently in preparation and scheduled for completion in Q2 2013. An updated res ource estimate is also provided for the Upper Zone of the Nechalacho Deposit in Table 2, al though it does not form part of the mine plan in the RPA Technical Report.
The updated estimate is highlighted by an increase in Measured Mineral Resources in the Basal Zone to 10.88 million tonnes grading 1.67% TREO 1, 0.38% HREO and 22.91% HREO/TREO 2 at the revised base case cut-off of US$320 NMR 3 per tonne, compared to C$260 NMR per tonne used in the previous resource estimate . The revised base case cut-off reflects anticipate d higher overall operating costs based on preliminary estima tes of including separation and refining costs in the development model to be incorporated in the FS. The increase in measured resources ensures that a high proportion of the resources app licable to the mineral reserves to be used in the FS mine plan will be at the highest level of confidence.
The breakdown of the resource estimate grades for t he individual rare earth element oxides is provided in Table 3.
The presence of a high grade sub-zone within the Ba sal Zone resource is apparent when higher NMR cut-offs are applied, as was highlighted previo usly in the Company’s news release dated
1 HREO (Heavy Rare Earth Oxides) is the total concentration of: Y 2O3, Eu 2O3, Gd 2O3, Tb 2O3, Dy 2O3, Ho 2O3, Er 2O3, Tm 2O3, Yb 2O3 and Lu 2O3. TREO (Total Rare Earth Oxides) is HREO plus: La 2O3, Ce 2O3, Pr 2O3, Nd 2O3 and Sm 2O3. 2 HREO/TREO is the percentage proportion of rare earths that are HREO.
3 NMR is defined as "Net Metal Return" or the in situ value of all payable metals, net of estimated metallurgical recoveries and off-site processing costs.
130 Adelaide St. W., Suite 1901, Toronto, ON M5H 3P5 Tel: (416) 364-4938 Fax: (416 ) 364-5162 [email protected] www.avalonraremetals.com
July 10, 2012 . For example, at the higher NMR cut-off of $800 es timated combined Measured and Indicated Mineral Resources total 18.57 million ton nes of 2.19% TREO, 0.57% HREO and 25.78% HREO/TREO (Table 1). The mine plan in the FS will be designed to maximize the exploitation of higher grade resources in the early years of mining.
Despite the use of a higher NMR cut-off in the base case, the base case updated resource estimate for the Basal Zone shows only a slight dec rease in the total Measured and Indicated Mineral Resources to 65.83 million tonnes of 1.57% TREO and 21.86% HREO/TREO compared to 72.66 million tonnes of 1.53% TREO and 21.5% HRE O/TREO reported previously for the Basal Zone in the news release dated July 10, 2012.
The mineral resource estimate was prepared Benjamin Webb, Senior Resource Geologist, Avalon Rare Metals Inc., under the supervision of the Comp any’s Vice-President, Exploration, William Mercer, Ph.D., P.Geo. (Ont), P. Geo. (NWT) who is t he QP for Avalon for this news release. An independent audit of the estimate was completed by Tudorel Ciuculescu, P. Geo., Senior Geologist, RPA. Drilling operations are being perfo rmed by a third party drilling company under the supervision of a consulting Professional Geolog ist. William Mercer is also providing overall direction on the project and monitoring of the QA/Q C on the laboratory analyses. (see the RPA Technical Report, dated August 25, 2011, for QA/QC procedures).
About Avalon Rare Metals Inc .
Avalon Rare Metals Inc. is a mineral development co mpany focused on rare metals deposits in Canada. It s flagship project, the 100%-owned Nechalacho Deposit , Thor Lake, NWT, is emerging as one of the largest undeveloped rare earth elements resources in the wo rld. Its exceptional enrichment in the more valuabl e 'heavy' rare earth elements, which are key to enabl ing advances in green energy technology and other growing high-tech applications, is one of the few p otential sources of these critical elements outside of China, currently the source of 95% of world supply. Avalon is well funded, has no debt and its work programs are progressing steadily. Social responsibility and environmental stewardship are corporate cornerstones.
Shares Outstanding: 103,621,986. Cash resources: ap proximately $27 million. To find out more about Avalon Rare Metals Inc., please visit our website a t www.avalonraremetals.com . For questions and feedback, please e-mail the Company at [email protected] or phone Don Bubar, President at 416- 364-4938.
This news release contains “forward-looking stateme nts” within the meaning of the United States Privat e Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation . Generally, these forward-looking statements can b e identified by the use of forwardlooking terminology such as “scheduled”, “anticipat es”, “expects” or “does not expect”, “is expected”, “scheduled”, “targeted”, or “believes”, or variations of such words and phrases or state th at certain actions, events or results “may”, “could ”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statement s contained herein include, without limitation the expected timing for the completion of the Nechalacho feasibility study; anticipated highe r operating costs based on preliminary estimates; a nd the expectation that the mine plan design will maximize the exploitation of higher gra de resources in the early years of mining. Forward- looking statements are subject to known and unknown risks, uncertainties and other fa ctors that may cause the actual results, level of a ctivity, performance or achievements of Avalon to be materially different from those exp ressed or implied by such forward-looking statement s. Forward-looking statements are based on assumptions management believes to be reas onable at the time such statements are made. Althou gh Avalon has attempted to identify important factors that could cause actual results to differ materially from those contained i n forward-looking statements, there may be other factors that cause results not to be as an ticipated, estimated or intended. Factors that may cause actual results to differ materially from expected results described in forward-looking statements include, but are not limited to: Avalon’ s ability to secure sufficient capital to implement its business plans, Avalon’s ability to c omplete its FS within the timeframe anticipated; th e final results on which the FS will be based on; uncertainties associated with Avalon’s re source and reserve estimates; uncertainties regardi ng global supply and demand for rare earth materials; the results and estimates set out in the separation plant prefeasibility study p roving to be inaccurate; and uncertainties associated with unanticipated geological conditions related to mining. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such s tatements. Such forward-looking statements have been provided for the purpose of as sisting investors in understanding the Company’s pl ans may not be appropriate for other purposes. Accordingly, readers should not pla ce undue reliance on forward-looking statements. Av alon does not undertake to update any forward-looking statements that are contained h erein, except in accordance with applicable securities laws.
Notes:
- 1) CIM definitions were followed for Mineral Resources.
- 2) The Qualified Person for this Mineral Resource esti mate is William Mercer, PhD, P.Geo.
(Ontario), P. Geo.(NWT) VP, Exploration, Avalon Rare Metals Inc.
- 3) HREO (Heavy Rare Earth Oxides) is the total concent ration of: Y 2O3, Eu 2O3, Gd 2O3, Tb 2O3, Dy 2O3, Ho 2O3, Er 2O3, Tm 2O3, Yb 2O3 and Lu 2O3.
- 4) TREO (Total Rare Earth Oxides) is HREO plus: La 2O3, Ce 2O3, Pr 2O3, Nd 2O3 and Sm 2O3.
- 5) Rare earths were valued at an average net price of US$38/kg, ZrO2 at US$3.77/kg, Nb2O5 at US$56/kg, and Ta2O5 at US$256/kg. Average REO price is net of metallurgical recovery and payable assumptions for contained rare earths, and will vary according to the proportions of individual rare earth elements prese nt. This average price is based on the individual price set used in the RPA Technical Repo rt, except for four changes applicable to individual oxides reflecting present and projected 2016 markets:
- a. La 2O3, Ce 2O3 and Sm 2O3 reduced 50% to $8.75, $6.23 and $6.75 per kg respectively.
- b. Y2O3 increased 140% to $67.25/kg.
- c. Remaining rare earth prices are unchanged at Pr 2O3 at $75.20, Nd 2O3 at $76.78, Eu 2O3 at $1392.57, Gd 2O3 at $54.99, Tb 2O3 at $1055.70, Dy 2O3 at $688.08, Ho 2(CO 3)3 at $66.35, Er 2O3 at $48.92, Lu 2O3 at $522.83.
- 6) An exchange rate of US$1.00 = C$1.05 was used.
- 7) A cut-off NMR value of US$320 per tonne was used. N MR is defined as "Net Metal Return" or the in situ value of all payable metals, net of estimated metallurgical recoveries and off-site processing costs.
- 8) ZrO 2 refers to Zirconium Oxide, Nb 2O5 refers to Niobium Oxide, Ta 2O5 refers to Tantalum Oxide.
Table 1: Nechalacho Deposit Measured, Indicated and Inferred Mineral Resources for Basal Zone by NMR Table 1: Nechalacho Deposit Measured, Indicated and Inferred Mineral Resources for Basal Zone by NMR Table 1: Nechalacho Deposit Measured, Indicated and Inferred Mineral Resources for Basal Zone by NMR Table 1: Nechalacho Deposit Measured, Indicated and Inferred Mineral Resources for Basal Zone by NMR Cut Cut Cut Cut-- --Off Off Off Off Value with the Base Case $320/tonne NMR Cut Value with the Base Case $320/tonne NMR Cut Value with the Base Case $320/tonne NMR Cut Value with the Base Case $320/tonne NMR Cut-- --Off . Off . Off . Off . Category and Category and Category and Category and Zone Zone Zone Zone NMR Cut NMR Cut NMR Cut NMR Cut -- -- Off Off Off Off Tonnes Tonnes Tonnes Tonnes TREO TREO TREO TREO HREO HREO HREO HREO HREO/TRE HREO/TRE HREO/TRE HREO/TRE O O O O ZrO ZrO ZrO ZrO 22 22 Nb Nb Nb Nb 22 22OO OO55 55 Ta Ta Ta Ta 22 22OO OO55 55 ($USD) ($USD) ($USD) ($USD) (millions) (millions) (millions) (millions) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) Measured Measured Measured Measured
Basal ≥320 10.88 1.67 0.38 22.91 3.13 0.41 0.04
Basal ≥600 6.75 1.98 0.49 24.76 3.79 0.48 0.05
Basal ≥800 4.00 2.23 0.59 26.51 4.31 0.54 0.06
Basal ≥1000 1.99 2.52 0.70 27.67 4.90 0.61 0.06
Indicated Indicated Indicated Indicated
Basal ≥320 54.95 1.54 0.33 21.63 3.01 0.40 0.04
Basal ≥600 30.03 1.88 0.45 23.88 3.66 0.47 0.05
Basal ≥800 14.57 2.18 0.56 25.57 4.21 0.53 0.06
Basal ≥1000 5.72 2.52 0.67 26.58 4.79 0.60 0.06
Measured + Indicated Measured + Indicated Measured + Indicated Measured + Indicated
Basal ≥320 65.83 1.57 0.34 21.86 3.03 0.40 0.04
Basal ≥600 36.78 1.90 0.46 24.05 3.68 0.47 0.05
Basal ≥800 18.57 2.19 0.57 25.78 4.23 0.53 0.06
Basal ≥1000 7.71 2.52 0.68 26.86 4.82 0.60 0.06
Inferred Inferred Inferred Inferred
Basal ≥320 59.89 1.28 0.25 19.59 2.70 0.36 0.03
Basal ≥600 18.68 1.69 0.37 22.14 3.33 0.45 0.04
Basal ≥800 4.75 2.03 0.51 25.28 3.88 0.51 0.05
Basal ≥1000 1.10 2.47 0.63 25.44 4.24 0.56 0.06
- 9) See Table 2 for summary of resources in Basal an d Upper zones at NMR $320 cut-off.
- 10) See Table 3 for individual rare earth oxide det ails.
Table 2 Table 2 Table 2 Table 2 : Nechalacho Deposit Mineral Resources at the Base Case $ : Nechalacho Deposit Mineral Resources at the Base Case $ : Nechalacho Deposit Mineral Resources at the Base Case $ : Nechalacho Deposit Mineral Resources at the Base Case $ 320 320 320 320 /tonne NMR Cut /tonne NMR Cut /tonne NMR Cut /tonne NMR Cut -- --Off Off Off Off Category Category Category Category Zone Zone Zone Zone Tonnes Tonnes Tonnes Tonnes TREO TREO TREO TREO HREO HREO HREO HREO HREO/ HREO/ HREO/ HREO/TREO TREO TREO TREO ZrO ZrO ZrO ZrO 22 22 Nb Nb Nb Nb 22 22OO OO55 55 Ta Ta Ta Ta 22 22OO OO55 55 (millions) (millions) (millions) (millions) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
Measured Basal 10.88 1.67 0.38 22.91 3.13 0.41 0.04
Upper Nil Nil Nil Nil Nil Nil Nil
Total Measured Total Measured Total Measured Total Measured 10.88 10.88 10.88 10.88 1.67 1.67 1.67 1.67 0.38 0.38 0.38 0.38 22.91 22.91 22.91 22.91 3.13 3.13 3.13 3.13 0.4 0.4 0.4 0.411 11 0.04 0.04 0.04 0.04
Indicated
Basal 54.95 1.54 0.33 21.63 3.01 0.40 0.04
Upper 55.61 1.42 0.14 10.10 1.92 0.28 0.02
Total Indicated Total Indicated Total Indicated Total Indicated 110.56 110.56 110.56 110.56 1.48 1.48 1.48 1.48 0.24 0.24 0.24 0.24 16.08 16.08 16.08 16.08 2.46 2.46 2.46 2.46 0.3 0.3 0.3 0.344 44 0.0 0.0 0.0 0.033 33
Measured and
Indicated
Basal 65.83 1.57 0.34 21.86 3.03 0.40 0.04
Upper 55.61 1.42 0.14 10.10 1.92 0.28 0.02
Total Measured Total Measured Total Measured Total Measured and and and and
Indicated Indicated Indicated Indicated 121.44 121.44 121.44 121.44 1.50 1.50 1.50 1.50 0.25 0.25 0.25 0.25 16.77 16.77 16.77 16.77 2.52 2.52 2.52 2.52 0.34 0.34 0.34 0.34 0.03 0.03 0.03 0.03
Inferred
Basal 59.89 1.28 0.25 19.59 2.70 0.36 0.03
Upper 122.12 1.28 0.13 9.77 2.21 0.32 0.02
Total Inferred Total Inferred Total Inferred Total Inferred 182.0 182.0 182.0 182.011 11 1.28 1.28 1.28 1.28 0.17 0.17 0.17 0.17 13.01 13.01 13.01 13.01 2.37 2.37 2.37 2.37 0.33 0.33 0.33 0.33 0.02 0.02 0.02 0.02
Table 3: Nechalacho Table 3: Nechalacho Table 3: Nechalacho Table 3: Nechalacho Deposit Measured, Indicated and Inferred Rare Earth Oxide Grades at the Base Case $320/tonne NMR Cut Deposit Measured, Indicated and Inferred Rare Earth Oxide Grades at the Base Case $320/tonne NMR Cut Deposit Measured, Indicated and Inferred Rare Earth Oxide Grades at the Base Case $320/tonne NMR Cut Deposit Measured, Indicated and Inferred Rare Earth Oxide Grades at the Base Case $320/tonne NMR Cut -- --Off Off Off Off
Category Category Category Category Zone Zone Zone Zone
Tonnes Tonnes Tonnes Tonnes (millions) (millions) (millions) (millions) La La La La 22 22OO OO33 33 (%) (%) (%) (%) Ce Ce Ce Ce 22 22OO OO33 33 (%) (%) (%) (%)
Pr Pr Pr Pr 22 22OO OO3 3 3 3
(%) (%) (%) (%) Nd Nd Nd Nd 22 22OO OO33 33 (%) (%) (%) (%) Sm Sm Sm Sm 22 22OO OO33 33 (%) (%) (%) (%) Eu Eu Eu Eu 22 22OO OO33 33 (%) (%) (%) (%)
Gd Gd Gd Gd 22 22OO OO3 3 3 3
(%) (%) (%) (%) Tb Tb Tb Tb 22 22OO OO33 33 (%) (%) (%) (%) Dy Dy Dy Dy 22 22OO OO33 33 (%) (%) (%) (%)
Ho Ho Ho Ho 22 22OO OO3 3 3 3
(%) (%) (%) (%) Er Er Er Er 22 22OO OO33 33 (%) (%) (%) (%) Tm Tm Tm Tm 22 22OO OO33 33 (%) (%) (%) (%) Yb Yb Yb Yb 22 22OO OO33 33 (%) (%) (%) (%) Lu Lu Lu Lu 22 22OO OO33 33 (%) (%) (%) (%) YY YY22 22OO OO33 33 (%) (%) (%) (%)
Measured Basal 10.88 0.263 0.589 0.074 0.293 0.065 0.0081 0. 059 0.0091 0.047 0.008 0.022 0.003 0.017 0.002 0.20 6
Upper Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil N il Nil Nil Nil Nil
Total Measured Total Measured Total Measured Total Measured 10.88 10.88 10.88 10.88 0.263 0.263 0.263 0.263 0.589 0.589 0.589 0.589 0.074 0.074 0.074 0.074 0.293 0.293 0.293 0.293 0.065 0.065 0.065 0.065 0.0081 0.0081 0.0081 0.0081 0.059 0.059 0.059 0.059 0.0091 0.0091 0.0091 0.0091 0.047 0.047 0.047 0.047 0.008 0.008 0.008 0.008 0.022 0.022 0.022 0.022 0.003 0.003 0.003 0.003 0.017 0.017 0.017 0.017 0.002 0.002 0.002 0.002 0.206 0.206 0.206 0.206
Indicated Basal 54.95 0.251 0.557 0.070 0.274 0.059 0.0073 0. 053 0.0080 0.041 0.007 0.018 0.002 0.014 0.002 0.18 1
Upper 55.61 0.268 0.594 0.073 0.284 0.054 0.0058 0. 039 0.0042 0.016 0.002 0.005 0.001 0.004 0.001 0.06 5
Total Indicated Total Indicated Total Indicated Total Indicated 110.56 110.56 110.56 110.56 0.259 0.259 0.259 0.259 0.576 0.576 0.576 0.576 0.071 0.071 0.071 0.071 0.279 0.279 0.279 0.279 0.057 0.057 0.057 0.057 0.0065 0.0065 0.0065 0.0065 0.046 0.046 0.046 0.046 0.0061 0.0061 0.0061 0.0061 0.029 0.029 0.029 0.029 0.005 0.005 0.005 0.005 0.012 0.012 0.012 0.012 0.002 0.002 0.002 0.002 0.009 0.009 0.009 0.009 0.001 0.001 0.001 0.001 0.123 0.123 0.123 0.123
Measured and Indicated
Basal 65.83 0.253 0.562 0.070 0.277 0.060 0.0074 0. 054 0.0082 0.042 0.007 0.019 0.002 0.015 0.002 0.18 5
Upper 55.61 0.268 0.594 0.073 0.284 0.054 0.0058 0. 039 0.0042 0.016 0.002 0.005 0.001 0.004 0.001 0.06 5
Total Measured and Total Measured and Total Measured and Total Measured and
Indicated Indicated Indicated Indicated 121.44 121.44 121.44 121.44 0.260 0.260 0.260 0.260 0.577 0.577 0.577 0.577 0.072 0.072 0.072 0.072 0.281 0.281 0.281 0.281 0.057 0.057 0.057 0.057 0.0067 0.0067 0.0067 0.0067 0.047 0.047 0.047 0.047 0.0063 0.0063 0.0063 0.0063 0.030 0.030 0.030 0.030 0.005 0.005 0.005 0.005 0.013 0.013 0.013 0.013 0.002 0.002 0.002 0.002 0.010 0.010 0.010 0.010 0.001 0.001 0.001 0.001 0.130 0.130 0.130 0.130
Inferred Basal 59.89 0.210 0.474 0.061 0.239 0.049 0.0060 0. 044 0.0063 0.031 0.006 0.013 0.002 0.011 0.002 0.13 2
Upper 122.12 0.231 0.553 0.066 0.258 0.047 0.0051 0 .034 0.0035 0.014 0.002 0.005 0.001 0.004 0.001 0.0 57
Total Inferred Total Inferred Total Inferred Total Inferred 182.01 182.01 182.01 182.01 0.225 0.225 0.225 0.225 0.527 0.527 0.527 0.527 0.064 0.064 0.064 0.064 0.252 0.252 0.252 0.252 0.047 0.047 0.047 0.047 0.0054 0.0054 0.0054 0.0054 0.037 0.037 0.037 0.037 0.0044 0.0044 0.0044 0.0044 0.020 0.020 0.020 0.020 0.003 0.003 0.003 0.003 0.007 0.007 0.007 0.007 0.001 0.001 0.001 0.001 0.006 0.006 0.006 0.006 0.001 0.001 0.001 0.001 0.081 0.081 0.081 0.081