Avalon Announces Updated Resource Estimate for
Nechalacho Rare Earth Elements Deposit, Thor Lake, NWT
January 14, 2010 -- Toronto, ON
-- Avalon Rare Metals Inc. (TSX:AVL, OTCQX:AVARF) ("Avalon" or
the "Company") is pleased to announce an updated Indicated
Mineral Resource estimate based on assay results of 44 definition holes
(9,101 metres) drilled during the 2009 summer drilling program. The grades
and widths encountered confirm good continuity for the rare earth elements
("REE") mineralization in the Basal Zone of the Nechalacho
Resources in the Nechalacho Basal Zone increased by 102% to 9.00
million tonnes grading 1.86% TREO1 with 23.1% HREO/TREO2 at the 1.60%
modelling leads to better understanding of controls on the
distribution of the high grade heavy rare earth mineralization in the
Basal Zone, and new drill targets.
drilling program to commence around January 17, 2010.
of prefeasibility study proceeding on schedule.
UPDATED RESOURCE ESTIMATE
The main objective of the 2009 summer drill
program was to confirm continuity between earlier widely-spaced drill holes
to allow more of the Inferred Resources in the Basal Zone of the Nechalacho
deposit to be classified as Indicated. These Indicated Mineral Resources
are the basis for the development model being prepared for the
Prefeasibility Study ("PFS"). This objective was achieved and the
revised Inferred and Indicated Mineral Resources are summarized in Table 1
below. The Indicated Mineral Resources within one continuous block in the
southern part of the Basal Zone deposit are now estimated to total 9.00 million tonnes at 1.86% TREO(Footer 1),
0.43% HREO and 23.1% HREO/TREO(Footer 2) (heavy rare
earth oxides) at the 1.60% TREO (total rare earth oxides) cut-off grade. This
is double the tonnage of Indicated Mineral Resources totalling 4.4 million
tonnes grading 1.97% TREO (25.4% HREO) defined in the southern part of the
deposit and disclosed in August 2009. This does not include the 2.2 million
tonnes Indicated Resource defined earlier in the central part of the
deposit, which may not form part of the development model to be used in the
PFS. Inferred Resources in the Basal Zone have decreased by an amount
closely corresponding to the newly re-classified Indicated Resources. This provides considerable confidence that
with further in-fill drilling, additional Inferred Resources will
ultimately be re-classified as Indicated Resources.
resource was prepared by Hudgtec Consulting Limited (Bruce Hudgins, P.
Geo.) of Dartmouth, N.S. The methodology employed by Hudgtec was the same
as that used in the previous update and at that time was reviewed by
external consultants Scott Wilson Roscoe Postle Associates ("Scott
DRILLING PROGRAM RESULTS AND GEOLOGICAL MODELLING
Forty-two of the holes were designed to intersect the heavy
rare earth rich Basal Zone on 50 metre centres, to confirm internal
continuity and outline additional indicated resources in the southern part
of the deposit. This drilling is overlapping with and adjacent to the
previously announced Indicated Mineral Resources of 4.4 million tonnes
averaging 1.97% TREO and 0.5% HREO, with 25.4% HREO/TREO (17 August 2009, Release #09-13), located largely
under Long Lake. Two drill holes, L09-205 and L09-206, were step-outs
designed to test the extension of known mineralization to the southwest.
The locations of the drill holes relevant to this news release are detailed
in Table 2 below and the composites calculated from the assay results
detailed in Table 3. A location map for these holes is accessible at http://www.avalonraremetals.com/projects/thor_lake/thor_lake_intro/ (entitled
"Diamond Drill Location Plan October 2009").
results of the 2009 drilling and concurrent academic research work have
also resulted in a better understanding of the genesis of the deposit.
Nechalacho is now recognized as an unusual example of a large, layered
peralkaline intrusive complex with an extensive zone of hydrothermal replacement
that has apparently upgraded the primary layered magmatic REE
mineralization. This significant refinement of the geological model
explains the distribution of thicker, higher grade TREO and higher heavy
rare earth portions of the Basal Zone and predicts potential for extensions
to the south, where the deposit is wide open for expansion beneath barren
The results of drill holes L09-205 and
L09-206 support this model by confirming that the Basal Zone extends
further southwest and to greater depths that previously intercepted. In
particular, L09-206, with an intercept between 249 and 263.2 metres below surface
of 14.2 metres grading 1.90% TREO and 30% HREO/TREO is a very encouraging
result, and follow-up is planned for this area in the Winter 2010 program.
Thirty-eight of the drill holes in this
release intercepted a Basal Zone above the 1.6% TREO cut-off grade with the
top of the zone between 97 and 191 metres below surface. The thickness of
the zone ranges from 4 to 50.8 metres thick and averages just over 30
metres over the area covered by the holes reported here. The intercept
lengths in the table are drilled lengths and are very close to true widths
for vertical drill holes. Angle holes were all oriented between -70 and -76
Degrees to the vertical, which would suggest that the true width is
generally from 0 - 10% less than the drilled width as the Basal Zone
usually has a shallow dip.
Assay highlights from drilling within the
Basal Zone include 2.05% TREO with
22.0% HREO over 46.2 metres in drill hole L09-164, 1.97% TREO with
21.4% HREO over 37.2 metres in drill hole L09-178 and 3.06% TREO with 18.3%
HREO over 18.5 metres in drill hole L09-178. Drill holes
L09-190 and L09-191 had exceptional widths and grades, as the Upper Zones
and Basal Zones merged into virtually continuous mineralization. Drill hole
L09-190 intersected 131.55 metres of 1.30% TREO with 20% HREO and L09-191
intersected 111 metres of 1.49% TREO with 15% HREO.
The detailed breakdown of assays for each of
the individual rare earth oxides included in the composites, along with
assay data for other associated rare metals are provided in a table posted
on the Company's website. Examples include (Footer 3) (for the above mentioned interval in drill
hole L09-164) (kilograms/tonnes): 3.66
kg/t Nd2O3, 0.10 kg/t Eu2O3, 0.10 kg/t Tb2O3 and 0.53 kg/t Dy2O3. The
46.5 metres interval also included 3.82% ZrO2 and 0.48% Nb2O5.
The respective values for the 37.2 metres interval in L09-178 are similar
with 3.59 kg/t Nd2O3, 0.10 kg/t
Eu2O3, 0.10 kg/t Tb2O3 and 0.51 kg/t Dy2O3 while other rare metals included
3.72% ZrO2 and 0.47% Nb2O5.
Intervals of higher HREO within the Basal
Zone include L09-163 with 10 metres between 147 -157 metres containing 4.8 kg/t Nd2O3, 1.0 kg/t Dy2O3, 0.17 kg/t Tb2O3
and 0.15 kg/t Eu2O3. Similarly drill hole L09-176 over 5.75
metres between 181 to 186.75 metres assayed 4.4 kg/t Nd2O3, 1.0 kg/t Dy2O3, 0.19 kg/t Tb2O3 and 0.14 kg/t Eu2O3.
Avalon's focus is on the Basal Zone of the
Nechalacho deposit due to its strong enrichment in the more valuable heavy
rare earth elements as a proportion of the total rare earth elements
present. However, drill holes frequently intersect between one and three
individual zones of neodymium rich REE mineralization in the Upper part of
the Nechalacho deposit that, despite having proportionally lower heavy rare
earth contents than the Basal Zone, may still be of economic importance. In
particular, within a local zone starting within 7 metres of surface, holes L09-178, L09-179 and L09-180 assayed a
total of 2.89% TREO over 20.06 metres, 2.75% TREO over 17 metres and 2.56%
TREO over 23 metres respectively. Within these upper zone
intervals, these drill holes gave Nd2O3
assays of 7.0 kg/t over 10 metres, 7.1 kg/t over 10 metres and 8.2
kg/t over 7.5 metres respectively. Neodymium is the
principal rare earth element used in high strength permanent magnets with
the heavy rare earths dysprosium and terbium sometimes added to the magnet
to enhance its thermal properties.
Recent prices for rare earth oxides, fob
China, given by Metal Pages include US$19.00 to $19.50/kg for Nd2O3, US$470
to $490 for Eu2O3, US$340 to $260 for Tb2O3 and US$107 to $112 for Dy2O3.
The winter drilling is planned to commence on about January
17, 2010 with one drill, and a second drill to be added around February 1,
2010. The first drill will focus on (1) areas adjacent to the main
indicated mineral resource that were not accessible in summer due to wet
ground and (2) drilling along Long Lake to extend the heavy rare earth rich
mineralization indicated in hole L09-206.
The second drill will initially test exploration targets,
including the extension of the known zone immediately south of Long Lake,
and then combine condemnation drilling of proposed plant site, airstrip and
tailings site. This drill is expected to be mobilized within the next two
Preparation of the PFS incorporating the new resource model,
by Scott Wilson RPA under the direction of David Swisher, Vice President,
Operations, is proceeding on schedule for completion in Spring 2010.
Metallurgical process testwork is ongoing.
RESOURCE ESTIMATION METHODOLOGY
The resource estimate is based on core logging, assaying and
geological interpretation by Avalon's consulting geologists of the rare
earth mineralization in the Lake Zone deposit from 51 historic and 155
Avalon diamond drill holes (from 2007 to 2009). Complete REE analysis for
yttrium and rare earth elements is available for six historic and all 155
Avalon holes focused on the Lake Zone deposit and formed the basis for
creating two main domains of REE mineralization: an upper light rare earth
element-enriched "Upper Zone" and a lower heavy rare earth-enriched,
The general resource estimation parameters employed are
summarized as follows:
- REE composited to two metre core lengths within
separate mineralized zones. Evaluation of grade distribution confirmed
that no "cutting" of high grade values was required.
- REE Assay composites and density measurements
temporarily flattened to base of Basal Zone to facilitate estimation
- Estimation of REE grades and density into separate
zones in flattened Gemcom� Surpac� Block Model (10m x 10m x 5m blocks
with sub-blocking to 5m x 5m x 2.5m) by the Inverse Distance Squared
method. A minimum of four composites and maximum of 15 composites were
used to estimate a block.
The first step in modelling the deposit was designating a
volume containing all resource blocks enclosed within the Basal Zone
geological boundaries in the area of drilling that matched the criteria for
Indicated Mineral Resources. This volume included blocks with grades above
and below the cut-off grade of 1.6% TREO. The change in rare earth grades
across the upper boundary of the Basal Zone is typically gradational and
across the lower boundary relatively sharp, with the highest rare earth
grades often at the base of the Basal Zone. Subsequently, areas of numerous
blocks near the upper boundary of the Basal Zone with less than the cut-off
grade of 1.6% TREO were excluded or trimmed from the volume, resulting in
geological continuity being maintained and grade being maximised for the
Indicated Mineral Resources. The Indicated Mineral Resource will be updated
in the near future with inclusion of limited pending in-fill sampling
All drill core from the 2009 program was split on site,
sampled on two metre intervals and shipped to the ALS Chemex facility in
Yellowknife, NWT for sample preparation. Analytical standards were prepared
from crushed rejects of historical Lake Zone samples, then analysed at five
separate laboratories to determine reproducible values. These standards
were then routinely inserted into the sample batches to monitor core
analyses. Barren diabase drill core is inserted as blanks. ALS Chemex ships
crushed splits of all the samples to its laboratory in Vancouver, BC.
Selected duplicates are also analyzed at an alternative independent
laboratory, however, although some assay duplicates for the 2009 Summer
program have not yet been completed. Given the large number of duplicates
already analyzed revealing no QA/QC issues, in the opinion of Avalon's QP,
Dr. William Mercer, this does not introduce a significant risk with respect
to the reliability of the assay results. The results reported to date were
produced by ALS Chemex and achieved acceptable standard values for the main
REE of economic interest (Nd, Tb and Dy).
All samples are analysed by lithium metaborate/tetraborate
fusion and dilute nitric acid digestion, followed by whole rock and 45
element multi-element ICP analysis, being ALS sample method ME-MS81.
Commencing with hole L09-137, all samples contained within intercepts above
the 1.6% cut-off criteria and any additional samples exceeding analytical
limits or of geological significance are rerun using similar ALS method
ME-MS81H for higher concentration levels. ME-MS81H is a similar method but
with greater dilution in the analytical procedure.
Details of the factors used to calculate rare earth oxides are
posted on the Company website along with complete analytical data. Drilling
operations were performed by Foraco Drilling Ltd. of Yellowknife, NWT under
the supervision of J.C. Pedersen, P.Geo. Bruce Hudgins, P.Geo., maintains
the geological database and monitors QA/QC on the laboratory analyses. The
Company's Vice-President, Exploration, William Mercer, Ph.D., P.Geo. (Ont),
P. Geol (NWT) provided overall direction on the project. The qualified
persons for the purposes of this news release are Bruce Hudgins, consultant
to Avalon, William Mercer and D.S. Bubar, P. Geo., President.
About Avalon Rare Metals Inc. (TSX:AVL, OTCQX:AVARF)
Avalon Rare Metals Inc. is a mineral exploration and
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: 78,710,198. Cash resources: approximately $17
This news release contains
forward-looking information and is subject to a variety of risks and
uncertainties and other factors that could cause actual events or results
to differ materially from those projected in the forward-looking
information. Forward-looking information is based on the opinions and
estimates of management at the date the information is given, and is
subject to a variety of risks and uncertainties and other factors that
could cause actual events or results to differ materially from those
projected in the forward-looking information. The forward-looking
information contained herein is given as of the date hereof and the Company
assumes no responsibility to update or revise such information to reflect
new events or circumstances, except as required by law.
- Total Rare Earth Oxides (TREO) refers to the elements lanthanum to
lutetium, plus yttrium, expressed as oxides. See Avalon's website for
conversion factors from elements to oxides. Heavy Rare Earth Oxides (HREO)
refers to the elements europium to lutetium, plus yttrium, expressed as
oxides as a percentage of the TREO. Light rare earths (LREO) refers to the
elements lanthanum to samarium, expressed as oxides.
- 23.1% HREO/TREO refers to the proportion of heavy rare earth oxides
as a percentage of the total rare earth oxide content of the rock.
- Nd2O3 = Neodymium Oxide, Eu2O3 = Europium Oxide, Tb2O3 = Terbium Oxide,
Dy2O3 = Dysprosium Oxide, ZrO2 = Zirconium Oxide, Nb2O5 = Niobium Oxide
Table 1: Mineral Resources
Table 2: Drill Hole Locations
NOTES for Table 2: Drill Hole Locations
- Note 1: Assay drill hole L09-166 is pending.
- Note 2: All drill holes surveyed by licensed
surveyor except those marked with * surveyed with handheld GPS.
- Note 3: All downhole surveys completed using
Deviflex downhole equipment. Holes 175-178, 181 and 194-196 were not
surveyed downhole due to equipment failure.
Table 3: Assay results drill holes L09-163