TORONTO, ONTARIO -- (Marketwire) -- 01/29/13 -- Avalon Rare Metals Inc. (TSX:AVL)(NYSE MKT:AVL)(NYSE Amex: AVL) ("Avalon" or the "Company") is pleased to provide a progress report on the Company's Feasibility Study and related work on the Nechalacho Rare Earth Elements Project at Thor Lake, NWT (the "Project").
The Feasibility Study ("FS") for the Project, including the operations at Thor Lake and Pine Point, NWT and Geismar Louisiana remains on schedule for completion in Q2 2013. The following key elements of the FS have been completed:
Environmental Baseline work at Nechalacho and Pine Point; Underground Mine plan and development schedule; Tailings Facility; Paste Backfill Plant; Nechalacho Flotation Plant designs; and Geismar Separation Plant designs.
Capital and Operating cost estimates are largely complete for those components of the Project where engineering design work is finished. Design criteria for the Pine Point Hydrometallurgical plant have been prepared and design work is now advancing on schedule.
Avalon continues its efforts to secure product off-take agreements and in this regard, the Company is pleased to announce the signing of a Memorandum of Understanding (MOU) with an Asian company for the sale of its Enriched Zircon Concentrate ("EZC") product. The EZC contains most of the zirconium, tantalum, niobium recovered and approximately 15-20% of the rare earths. Samples of the EZC were initially sent to this prospective customer in August 2012 and successful processing tests led to the signing of this MOU in January 2013. The revenue from the EZC is expected to represent a significant percentage of the total revenue from the project. Negotiations for off-take agreements for the sale of separated rare earth oxides and carbonates are progressing.
The Hydrometallurgical plant testwork program is virtually complete except for some minor impurity removal and kiln optimisation investigations. Mintek SA in Johannesburg, RSA is in the process of optimising final impurity removal processes ahead of completing a mini pilot plant campaign for the rare earth separation and refining operations. Process optimisation testwork for the flotation plant continues as opportunities to improve flotation performance are investigated. Various alternative reagent combinations will continue to be evaluated in an effort to reduce reagent consumption and enhance recoveries.
Definition Drilling and Resource Estimates
A brief definition drilling program is planned to commence on February 5th. The objective of this program is to complete additional in-fill drilling near the planned underground crusher location, within stopes designed to be mined in the first few years of mine life. The program is anticipated to be completed by mid-March, with an updated resource estimate expected by mid-June. This program will also provide additional sample material from the Basal Zone for on-going process optimization.