Avalon Rare Metals Inc. (TSX:AVL)(NYSE MKT:AVL)(NYSE Amex: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
independently audited by Roscoe Postle Associates Inc. ("RPA"), is
based on the assays from all drilling completed up to August 27,
2012. The updated resource estimate further increases mineral
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 mine 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 Feasibility Study ("FS") currently in preparation
and scheduled for completion in Q2 2013. An updated resource
estimate is also provided for the Upper Zone of the Nechalacho
Deposit in Table 2, although 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 anticipated higher overall operating costs
based on preliminary estimates 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 applicable 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 the individual
rare earth element oxides is provided in Table 3.
The presence of a high grade sub-zone within the Basal Zone
resource is apparent when higher NMR cut-offs are applied, as was
highlighted previously in the Company's news release dated July 10,
2012. For example, at the higher NMR cut-off of $800 estimated
combined Measured and Indicated Mineral Resources total 18.57
million tonnes 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 decrease 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%
HREO/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 Company's Vice-President, Exploration, William Mercer,
Ph.D., P.Geo. (Ont), P. Geo. (NWT) who is the 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 performed by a third party drilling
company under the supervision of a consulting Professional
Geologist. William Mercer is also providing overall direction on
the project and monitoring of the QA/QC 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 company focused
on rare metals deposits in Canada. Its flagship project, the
100%-owned Nechalacho Deposit, Thor Lake, NWT, is emerging as one
of the largest undeveloped rare earth elements resources in the
world. Its exceptional enrichment in the more valuable 'heavy' rare
earth elements, which are key to enabling advances in green energy
technology and other growing high-tech applications, is one of the
few potential 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: approximately
$27 million. To find out more about Avalon Rare Metals Inc., please
visit our website at www.avalonraremetals.com.
----------------------------------------------------------------------------
(1) HREO (Heavy Rare Earth Oxides) is the total concentration of: Y2O3,
Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3 and Lu2O3. TREO
(Total Rare Earth Oxides) is HREO plus: La2O3, Ce2O3, Pr2O3, Nd2O3 and
Sm2O3.
(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.
This news release contains "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995 and applicable Canadian securities legislation.
Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "scheduled",
"anticipates", "expects" or "does not expect", "is expected",
"scheduled", "targeted", or "believes", or variations of such words
and phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur" or "be
achieved". Forward-looking statements contained herein include,
without limitation the expected timing for the completion of the
Nechalacho feasibility study; anticipated higher operating costs
based on preliminary estimates; and the expectation that the mine
plan design will maximize the exploitation of higher grade
resources in the early years of mining. Forward-looking statements
are subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity,
performance or achievements of Avalon to be materially different
from those expressed or implied by such forward-looking statements.
Forward-looking statements are based on assumptions management
believes to be reasonable at the time such statements are made.
Although Avalon has attempted to identify important factors that
could cause actual results to differ materially from those
contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, 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
complete its FS within the timeframe anticipated; the final results
on which the FS will be based on; uncertainties associated with
Avalon's resource and reserve estimates; uncertainties regarding
global supply and demand for rare earth materials; the results and
estimates set out in the separation plant prefeasibility study
proving 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 statements. Such forward-looking statements
have been provided for the purpose of assisting investors in
understanding the Company's plans may not be appropriate for other
purposes. Accordingly, readers should not place undue reliance on
forward-looking statements. Avalon does not undertake to update any
forward-looking statements that are contained herein, except in
accordance with applicable securities laws.
---------------------------------------------------------------------------
Table 1: Nechalacho Deposit Measured, Indicated and Inferred Mineral
Resources for Basal Zone by NMR Cut-Off Value with the Base Case
$320/tonne NMR Cut-Off.
---------------------------------------------------------------------------
Category
and Zone NMR Cut-Off Tonnes TREO HREO HREO/TREO ZrO2 Nb2O5 Ta2O5
-----------------------------------------------------------------
($USD) (millions) (%) (%) (%) (%) (%) (%)
---------------------------------------------------------------------------
Measured
---------------------------------------------------------------------------
Basal greater than
or equal
to 320 10.88 1.67 0.38 22.91 3.13 0.41 0.04
---------------------------------------------------------------------------
Basal greater than
or equal
to 600 6.75 1.98 0.49 24.76 3.79 0.48 0.05
---------------------------------------------------------------------------
Basal greater than
or equal
to 800 4.00 2.23 0.59 26.51 4.31 0.54 0.06
---------------------------------------------------------------------------
Basal greater than
or equal
to 1000 1.99 2.52 0.70 27.67 4.90 0.61 0.06
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Indicated
---------------------------------------------------------------------------
Basal greater than
or equal
to 320 54.95 1.54 0.33 21.63 3.01 0.40 0.04
---------------------------------------------------------------------------
Basal greater than
or equal
to 600 30.03 1.88 0.45 23.88 3.66 0.47 0.05
---------------------------------------------------------------------------
Basal greater than
or equal
to 800 14.57 2.18 0.56 25.57 4.21 0.53 0.06
---------------------------------------------------------------------------
Basal greater than
or equal
to 1000 5.72 2.52 0.67 26.58 4.79 0.60 0.06
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Measured + Indicated
---------------------------------------------------------------------------
Basal greater than
or equal
to 320 65.83 1.57 0.34 21.86 3.03 0.40 0.04
---------------------------------------------------------------------------
Basal greater than
or equal
to 600 36.78 1.90 0.46 24.05 3.68 0.47 0.05
---------------------------------------------------------------------------
Basal greater than
or equal
to 800 18.57 2.19 0.57 25.78 4.23 0.53 0.06
---------------------------------------------------------------------------
Basal greater than
or equal
to 1000 7.71 2.52 0.68 26.86 4.82 0.60 0.06
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Inferred
---------------------------------------------------------------------------
Basal greater than
or equal
to 320 59.89 1.28 0.25 19.59 2.70 0.36 0.03
---------------------------------------------------------------------------
Basal greater than
or equal
to 600 18.68 1.69 0.37 22.14 3.33 0.45 0.04
---------------------------------------------------------------------------
Basal greater than
or equal
to 800 4.75 2.03 0.51 25.28 3.88 0.51 0.05
---------------------------------------------------------------------------
Basal greater than
or equal
to 1000 1.10 2.47 0.63 25.44 4.24 0.56 0.06
---------------------------------------------------------------------------
Notes:
1. CIM definitions were followed for Mineral Resources.
2. The Qualified Person for this Mineral Resource estimate 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 concentration of: Y2O3,
Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3 and Lu2O3.
4. TREO (Total Rare Earth Oxides) is HREO plus: La2O3, Ce2O3, Pr2O3, Nd2O3
and Sm2O3.
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 present. This average price is based on the
individual price set used in the RPA Technical Report, except for four
changes applicable to individual oxides reflecting present and projected
2016 markets:
a. La2O3, Ce2O3 and Sm2O3 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 Pr2O3 at $75.20, Nd2O3
at $76.78, Eu2O3 at $1392.57, Gd2O3 at $54.99, Tb2O3 at $1055.70,
Dy2O3 at $688.08, Ho2(CO3)3 at $66.35, Er2O3 at $48.92, Lu2O3 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. 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.
8. ZrO2 refers to Zirconium Oxide, Nb2O5 refers to Niobium Oxide, Ta2O5
refers to Tantalum Oxide.
9. See Table 2 for summary of resources in Basal and Upper zones at NMR
$320 cut-off.
10. See Table 3 for individual rare earth oxide details.
----------------------------------------------------------------------------
Table 2: Nechalacho Deposit Mineral Resources at the Base Case $320/tonne
NMR Cut-Off
----------------------------------------------------------------------------
Category Zone Tonnes TREO HREO HREO/TREO ZrO2 Nb2O5 Ta2O5
-------------------------------------------------
(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 10.88 1.67 0.38 22.91 3.13 0.41 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 110.56 1.48 0.24 16.08 2.46 0.34 0.03
============================================================================
Measured and Basal
Indicated 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 and
Indicated 121.44 1.50 0.25 16.77 2.52 0.34 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 182.01 1.28 0.17 13.01 2.37 0.33 0.02
============================================================================
----------------------------------------------------------------------------
Table 3: Nechalacho Deposit Measured, Indicated and Inferred Rare Earth
Oxide Grades at the Base Case $320/tonne NMR Cut-Off
----------------------------------------------------------------------------
Tonnes
Category Zone (millions) La2O3(%) Ce2O3(%) Pr2O3(%) Nd2O3(%)
----------------------------------------------------------------------------
Measured Basal 10.88 0.263 0.589 0.074 0.293
-----------------------------------------------------------
Upper Nil Nil Nil Nil Nil
----------------------------------------------------------------------------
Total Measured 10.88 0.263 0.589 0.074 0.293
----------------------------------------------------------------------------
Indicated Basal 54.95 0.251 0.557 0.070 0.274
-----------------------------------------------------------
Upper 55.61 0.268 0.594 0.073 0.284
----------------------------------------------------------------------------
Total Indicated 110.56 0.259 0.576 0.071 0.279
----------------------------------------------------------------------------
Measured and Basal 65.83
Indicated 0.253 0.562 0.070 0.277
-----------------------------------------------------------
Upper 55.61 0.268 0.594 0.073 0.284
----------------------------------------------------------------------------
Total Measured and 121.44
Indicated 0.260 0.577 0.072 0.281
----------------------------------------------------------------------------
Inferred Basal 59.89 0.210 0.474 0.061 0.239
-----------------------------------------------------------
Upper 122.12 0.231 0.553 0.066 0.258
----------------------------------------------------------------------------
Total Inferred 182.01 0.225 0.527 0.064 0.252
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Table 3: Nechalacho Deposit Measured, Indicated and Inferred Rare Earth
Oxide Grades at the Base Case $320/tonne NMR Cut-Off
----------------------------------------------------------------------------
Tonnes
Category Zone (millions) Sm2O3(%) Eu2O3(%) Gd2O3(%) Tb2O3(%)
----------------------------------------------------------------------------
Measured Basal 10.88 0.065 0.0081 0.059 0.0091
-----------------------------------------------------------
Upper Nil Nil Nil Nil Nil
----------------------------------------------------------------------------
Total Measured 10.88 0.065 0.0081 0.059 0.0091
----------------------------------------------------------------------------
Indicated Basal 54.95 0.059 0.0073 0.053 0.0080
-----------------------------------------------------------
Upper 55.61 0.054 0.0058 0.039 0.0042
----------------------------------------------------------------------------
Total Indicated 110.56 0.057 0.0065 0.046 0.0061
----------------------------------------------------------------------------
Measured and Basal 65.83
Indicated 0.060 0.0074 0.054 0.0082
-----------------------------------------------------------
Upper 55.61 0.054 0.0058 0.039 0.0042
----------------------------------------------------------------------------
Total Measured and 121.44
Indicated 0.057 0.0067 0.047 0.0063
----------------------------------------------------------------------------
Inferred Basal 59.89 0.049 0.0060 0.044 0.0063
-----------------------------------------------------------
Upper 122.12 0.047 0.0051 0.034 0.0035
----------------------------------------------------------------------------
Total Inferred 182.01 0.047 0.0054 0.037 0.0044
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Table 3: Nechalacho Deposit Measured, Indicated and Inferred Rare Earth
Oxide Grades at the Base Case $320/tonne NMR Cut-Off
----------------------------------------------------------------------------
Tonnes
Category Zone (millions) Dy2O3(%) Ho2O3(%) Er2O3(%) Tm2O3(%)
----------------------------------------------------------------------------
Measured Basal 10.88 0.047 0.008 0.022 0.003
-----------------------------------------------------------
Upper Nil Nil Nil Nil Nil
----------------------------------------------------------------------------
Total Measured 10.88 0.047 0.008 0.022 0.003
----------------------------------------------------------------------------
Indicated Basal 54.95 0.041 0.007 0.018 0.002
-----------------------------------------------------------
Upper 55.61 0.016 0.002 0.005 0.001
----------------------------------------------------------------------------
Total Indicated 110.56 0.029 0.005 0.012 0.002
----------------------------------------------------------------------------
Measured and Basal 65.83
Indicated 0.042 0.007 0.019 0.002
-----------------------------------------------------------
Upper 55.61 0.016 0.002 0.005 0.001
----------------------------------------------------------------------------
Total Measured and 121.44
Indicated 0.030 0.005 0.013 0.002
----------------------------------------------------------------------------
Inferred Basal 59.89 0.031 0.006 0.013 0.002
-----------------------------------------------------------
Upper 122.12 0.014 0.002 0.005 0.001
----------------------------------------------------------------------------
Total Inferred 182.01 0.020 0.003 0.007 0.001
----------------------------------------------------------------------------
------------------------------------------------------------------
Table 3: Nechalacho Deposit Measured, Indicated and Inferred Rare
Earth Oxide Grades at the Base Case $320/tonne NMR Cut-Off
------------------------------------------------------------------
Tonnes
Category Zone (millions) Yb2O3(%) Lu2O3(%) Y2O3(%)
------------------------------------------------------------------
Measured Basal 10.88 0.017 0.002 0.206
-------------------------------------------------
Upper Nil Nil Nil Nil
------------------------------------------------------------------
Total Measured 10.88 0.017 0.002 0.206
------------------------------------------------------------------
Indicated Basal 54.95 0.014 0.002 0.181
-------------------------------------------------
Upper 55.61 0.004 0.001 0.065
------------------------------------------------------------------
Total Indicated 110.56 0.009 0.001 0.123
------------------------------------------------------------------
Measured and Basal 65.83
Indicated 0.015 0.002 0.185
-------------------------------------------------
Upper 55.61 0.004 0.001 0.065
------------------------------------------------------------------
Total Measured and 121.44
Indicated 0.010 0.001 0.130
------------------------------------------------------------------
Inferred Basal 59.89 0.011 0.002 0.132
-------------------------------------------------
Upper 122.12 0.004 0.001 0.057
------------------------------------------------------------------
Total Inferred 182.01 0.006 0.001 0.081
------------------------------------------------------------------
Contacts: Avalon Rare Metals Inc. Don Bubar President
416-364-4938ir@avalonraremetals.com www.avalonraremetals.com
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