technical report on the nechalacho deposit, thor lake project ...

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MINERAL RESERVES The current Mineral Reserve estimate for the Thor Lake Project has been prepared by Scott Wilson RPA (2010) as outlined in Table 17-12. The Mineral Reserve is based upon underground mining of the deposit. The Mineral Reserves were all converted from Mineral Resources and no Inferred Mineral Resources were converted to Mineral Reserves. The Mineral Resource utilized for development of the mine plan and reserves is that of the <strong>report</strong> of Scott Wilson RPA (2010). Avalon has not updated this Mineral Reserve to reflect the updated resources, but this work is in progress. Where inferred mineral resources are included within the stope boundaries of the mine plan the material has been treated as dilution. Table 17-12 Mineral Reserves Avalon Rare Metals Inc. – Thor Lake Project Tonnes (millions) % TREO % HREO % ZrO 2 % Nb 2 O 5 % Ta 2 O 5 Probable Reserves Basal Zone 12.01 1.70 0.38 3.16 0.41 0.041 Total Probable Reserves 12.01 1.70 0.38 3.16 0.41 0.041 Notes: 1. CIM definitions were followed for Mineral Reserves. 2. Mineral Reserves are estimated using price forecasts for 2014 for rare earth oxides (US$21.94/kg average), zirconium oxide (US$3.76/kg), tantalum oxide (US$130/kg) and niobium oxide (US$45/kg), which are significantly above current prices. 3. HREO grade comprises Y 2O 3, Eu 2O 3, Gd 2O 3, Tb 2O 3, Dy 2O 3, Ho 2O 3, Er 2O 3, Tm 2O 3, Yb 2O 3, and Lu 2O 3. TREO grade comprises all HREO and La 2O 3, Ce 2O 3, Nd 2O 3, Pr 2O 3, and Sm 2O 3. 4. An exchange rate of C$1.11/US$1 was used. 5. Mineral Reserves are estimated using a Net Metal Return (NMR) cut-off value of C$260/t. 6. A minimum mining width of five metres was used. 7. Totals may differ from sum or weighted sum of numbers due to rounding. CUT-OFF GRADE There are several payable products from the Thor Lake project, these include the TREO product and concentrates containing niobium, tantalum and zirconium. The cut-off grade for the design of the stopes was therefore based upon an NMR per tonne. The NMR per tonne was based upon the estimated prices for the products after allowance for recovery at the flotation plant and the hydrometallurgical plant less the operating costs associated with the production of products. Technical Report 43-101 – March 13, 2011 Page 17-24 Prepared by Avalon Rare Metals Inc.
The recoveries estimated for the flotation plant and for the hydrometallurgical plant are listed in Table 17-13. The 3% NSR was estimated based upon the value of production less the hydrometallurgical costs and transportation. The hydrometallurgy plant costs include an allowance for the depreciation of the capital costs over the total units of planned production. Table 17-13 Recovery Assumptions for Reserve Estimate Avalon Rare Metals Inc. – Thor Lake Project Feed to Concentrate Concentrate to Product Net Recovery ZrO 2 89.7% 90.0% 80.7% TREO 79.5% 93.0% 73.9% HREO 79.5% 93.0% 73.9% Nb 2 O 5 68.9% 80.0% 55.1% Ta 2 O 5 63.0% 50.0% 31.5% An allowance of 0.03% of the product weight was deducted as losses in transit considering the number of times that the products will be handled between the concentrator and the final customer. The prices used for the cut off grade analysis are listed in Table 17-14 and the operating costs are based on the LOM average operating cost estimate and are shown in Table 17-15. An exchange rate of USD = 1.11 CAD was used in the analysis. Table 17-14 Product Prices for Cut-Off Grade Avalon Rare Metals Inc. – Thor Lake Project US$/kg TREO 21.94 Nb 2 O 5 45.00 Ta 2 O 5 130.00 ZrO 2 3.77 The application of the product prices, recoveries and exchange rate were used to calculate the value of each block within the resource model. An NMR of C$300/tonne was applied as the cutoff grade in the stope design. The calculated cut-off ore value using the factors noted above is an average of C$267 per tonne. Technical Report 43-101 – March 13, 2011 Page 17-25 Prepared by Avalon Rare Metals Inc.
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TECHNICAL REPORT ON THE NECHALACHO
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TABLE OF CONTENTS 1. SUMMARY ......
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QUALITY ASSURANCE / QUALITY CONTROL
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Warehouse..........................
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LIST OF TABLES Table 1-1 Summary of
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Table 18-9 Mine Ventilation Quantit
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Table 18-54 Table 18-55 Pine Point
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LIST OF APPENDICES APPENDIX A Block
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Table 1-1 Summary of Mineral Resour
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Royalties. The net revenue generate
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• The products will be shipped in
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• Income taxes and NWT mining roy
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2. INTRODUCTION This report
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Figure 2-2 Project Sites, Thor Lake
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Table 2-1 Rare Earth Element Data A
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LIST OF ABBREVIATIONS Units of meas
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4. PROPERTY DESCRIPTION AND LOCATIO
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The mining leases have a 21-year li
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5. ACCESSIBILITY, CLIMATE, LOCAL RE
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Fort Resolution is located on the s
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producing a tantalum concentrate, b
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Figure 7-2 Detailed Deposit Geology
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The nepheline-sodalite syenite host
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LATE TECTONIC FAULTS Faults are pre
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8. DEPOSIT TYPES The mineral deposi
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The Ore (Nechalacho) Nepheline Soda
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from section to section - this may
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Table 9-1 Average Percent of Ore Mi
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The Nechalacho deposit alteration s
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11. DRILLING Since 1977, diamond dr
Page 61 and 62: Foraco drill rig was added in Febru
Page 63 and 64: CORE LOGGING AND CORE RECOVERY The
Page 65 and 66: A high R 2 (and all regressions had
Page 67 and 68: 12. SAMPLING METHOD AND APPROACH A
Page 69 and 70: such as Illimausaq in Greenland, a
Page 71 and 72: 13. SAMPLE PREPARATION, ANALYSES AN
Page 73 and 74: limited set of elements; however, s
Page 75 and 76: CONCLUSIONS Avalon’s conclusions
Page 77 and 78: Tb and Dy) were routinely monitored
Page 79 and 80: As part of the QA/QC program, Avalo
Page 81 and 82: Table 14-4: Comparison of Niobium,
Page 83 and 84: shows more deviation, with ALS MS81
Page 85 and 86: 16. MINERAL PROCESSING AND METALLUR
Page 87 and 88: In a typical test, for example CCr-
Page 89 and 90: 17. MINERAL RESOURCE AND MINERAL RE
Page 91 and 92: 9. TREO equivalent is estimated by
Page 93 and 94: Table 17-4 Sample Information Avalo
Page 95 and 96: Figure 17-1 Distribution of REO Com
Page 97 and 98: Assay Statistics for Upper Zone* *
Page 99 and 100: CUT-OFF GRADE A previous public res
Page 101 and 102: underneath for SG measurement purpo
Page 103 and 104: Figure 17-4 Density Measurements AL
Page 105 and 106: was equal to 60 m by 60 m by 30 m a
Page 107 and 108: Table 17-12 Detailed Resource Break
Page 109 and 110: Table 17-13 Indicated Mineral Resou
Page 111: Figure 17-7 Outline of Area of Indi
Page 115 and 116: grades were based upon the grades w
Page 117 and 118: Figure 18-1 Thor Lake Site Layout T
Page 119 and 120: Scott Wilson RPA recommends the use
Page 121 and 122: During discussions with the mine de
Page 123 and 124: Figure 18-4 Mine Layout Some of the
Page 125 and 126: Figure 18-5 Mine Development Schema
Page 127 and 128: Table 18-2 Development Tonnage Brea
Page 129 and 130: Until the crusher is in place and t
Page 131 and 132: Lateral Development The access decl
Page 133 and 134: Equipment will be selected based up
Page 135 and 136: Table 18-6 Estimated Electrical Loa
Page 137 and 138: VENTILATION The mine ventilation is
Page 139 and 140: for closing unused areas and for ch
Page 141 and 142: Mine Fan Horse Power Using the same
Page 143 and 144: Paste Fill System A paste fill syst
Page 145 and 146: Communications Mine communications
Page 147 and 148: completion of the 30 m to 50 m long
Page 149 and 150: HEALTH AND SAFETY All crew will be
Page 151 and 152: The crushing plant is designed for
Page 153 and 154: Table 18-12 (Cont’d) Principal Pr
Page 155 and 156: Figure 18-9 Hydrometallurgical Plan
Page 157 and 158: The Pine Point hydrometallurgical f
Page 159 and 160: Decant pipeworks have been included
Page 161 and 162: • Development of pre-feasibility
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Design Basis The pre-feasibility le
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non-woven geotextile) to prevent da
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divert surface drainage away from r
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A high pressure (200 psi) compresse
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Fuel deliveries are assumed to be s
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Mill Supplies The key mill supplies
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Table 18-15 Surface Equipment Fleet
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Figure 18-10 Thor Lake Temporary Ba
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• Together with the unloading log
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it will be necessary to upgrade the
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Table 18-16 Hydrometallurgical Plan
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Table 18-17 Surface Mobile Equipmen
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Rare Earth FOB China* FOB China** P
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• loparite and eudialyte in alkal
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Table 18-18 Rare Earth supply - 200
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Table 18-20 Rare Earth Demand by Ap
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Table 18-22 Proposed New REO Projec
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in China. On this basis, Avalon is
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Determine Prices for Avalon’s Pro
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The balance of niobium supply is co
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epresenting about 18% of total zirc
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Table 18-25 Historic Chinese Export
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Figure 18-16 Tantalum Markets - 200
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the price for tantalum chemicals in
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Surface Hydrology The Thor Lake dra
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seven) have occurred more frequentl
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elative to uranium, the overall eff
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interviews conducted for the nearby
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Wildlife Early science-based wildli
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Other environmental permits/approva
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TAXES The NWT diesel tax has been i
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Table 18-31 Mine Capital Cost Estim
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Table 18-33 Surface Infrastructure
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Table 18-36 Indirect Cost Estimate
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Table 18-37 Contingency Allowance A
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Operating Cost Exclusions The opera
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Table 18-40 Underground Mine Cost S
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Table 18-41 Mine Cost Details Avalo
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Thor Lake Surface The Thor Lake sur
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Table 18-45 Sales and Marketing Cos
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Table 18-47 Rail Car Load Limits Av
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there will be no overhauls in the i
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Other supplies and freight will be
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Table 18-55 Hydrometallurgical Plan
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Table 18-56 Cash Flow Summary Techn
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The sensitivity of the base case 8%
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19. INTERPRETATION AND CONCLUSIONS
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• The Mineral Reserves, which hav
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20. RECOMMENDATIONS The authors of
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21. REFERENCES BCC Research (2009):
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MDN Inc (2010): News Release Melvil
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Wardrop Engineering Inc. (2009): Th
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23. CERTIFICATES OF QUALIFIED PERSO
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CERTIFICATE OF QUALIFIED PERSON I,
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CERTIFICATE OF QUALIFIED PERSON I,
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Section 416000 Section 416100 Secti
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Technical Report 43-101 - March 13,
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