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

8. ZrO 2 refers to Zirconium Oxide, Nb 2 O 5 refers to Niobium Oxide, Ta 2 O 5 refers to Tantalum
Oxide, Ga 2 O 3 refers to Gallium Oxide.
9. TREO equivalent is estimated by calculating a weighted average NMR per kg for the rare
earths and rare metals (Zr, Nb, Ta) in an given interval, and re-estimating the interval
assuming that all the value was in rare earths only.
10. The two main differences to previous estimates were that eight composites were used per
block, versus 15 in the estimate released in July 19, 2010 and the Basal Zone was not
flattened onto the lower contact prior to block estimation. All other parameters were similar.
In the opinion of Avalon, the increased Indicated Mineral Resources justify a new estimation of
the Mineral Reserves on the property, including development of a new mine plan. The Mineral
Reserves that have been estimated previously are restricted to the Basal Zone of the
Nechalacho deposit.
PFS Conclusions
In the opinion of Avalon the following conclusions from the PFS completed by Scott Wilson RPA
remain valid.
Positive economic results can be obtained for the Thor Lake Project, in a scenario that includes
underground mining, preparation of a bulk concentrate at Thor Lake, and hydrometallurgical
processing at a plant to be constructed at Pine Point. The final products will be a mied rare
earth oxide concentrate, a zirconium oxide concentrate, a niobium oxide concentrate, and a
tantalum oxide concentrate.
Geology and Mineral Resources
• An extensive diamond drilling program by Avalon has defined two layers of REE
mineralization at the Nechalacho Deposit, known as the Upper and Basal Zones. The
latter is preferentially enriched in heavy rare earth elements. This deposit is geneticallyrelated
to a peralkaline intrusion called the Thor Lake Syenite and it displays features
that reflect magmatic segregation and layering as well as hydrothermal/metasomatic
overprinting. This deposit type is not common and Avalon has secured the services of
people that are skilled at drilling, logging, sampling and modelling this type of deposit.
• The Mineral Reserves have not been updated as a new mine plan is required. As a
result, the portion of the Indicated Mineral Resources in the Basal Zone that form the
basis of the Mineral Reserves were estimated by Scott Wilson RPA (2010) to be 14.5
million tonnes, at an average grade of 1.82% TREO including 0.40% HREO, 3.38%
ZrO2, 0.44% Nb2O5 and 0.043% Ta2O5.
• Avalon created an economic model using metal prices, the effects of payable
percentages, flotation and hydrometallurgical recoveries, and any payable NSR
Technical Report 43-101 – March 13, 2011 Page 1-3
Prepared by Avalon Rare Metals Inc.