RARE EARTH STUDY: Avalon has Nechalacho deposit in feasibility stage

It seems I missed the most advanced of Canada's REE projects in my rundown yesterday - Avalon Rare Metals. The Toronto-based company acquired the Nechalacho REE deposit at Thor Lake, NT, in 2005. Since then it has spent over $25 million drilling at the site and producing a scoping and pre-feasibility study (PFS). The next step is to prepare a feasibility study that will cost another $43 million.

The Nechalacho deposit is the second largest REE deposit in the world, only outranked by the Bayan Obo deposit in China. Total inferred resources represent 2.5 million tonnes of contained TREO. Nechalacho has the highest proportion of the more valuable HREE (15%), and it ranks as the world's third largest niobium deposit. (This editor will not be forgetting it again.)

The project is moving now into the feasibility stage with production targeted for 2015. Plans call for a 2,000-t/d underground mine based on room and pillar and longhole stoping. There will be a conventional flotation mill to produce concentrate that will then undergo hydrometallurgical treatment at a plant south of Great Slave Lake. Annual production will be 10,000 tonnes of mixed REE oxides for separation elsewhere. Pre-production costs will be $900 million, according to the PFS.

An interesting aside to the Thor Lake project is that a wind farm is proposed to supply power to the operation. The combination of REE miner and major REE user, i.e. wind generators, is apt.

Avalon is well positioned to become the next REE producer, and as it prospers, so will its Aboriginal neighbours. The company adheres to the PDAC's e3 Plus principles and guidelines, winning the PDAC environmental and social responsibility award in 2010. It is developing ties with local communities, offering training, jobs and business opportunities.

Should the world demand for REEs grow even more in the future, Avalon will be ready to fill it. The company also has three REE exploration projects in northern Ontario and one in Nova Scotia.

Readers desiring a short course in the importance of REEs should see Avalon's corporate presentation at www.AvalonRareMetals.com.