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

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Make REE Price Assumptions Beyond 2014 The prices for REE beyond 2014 have been assumed to hold constant at 2014 levels. Demand is expected to continue to grow and could be significantly higher if the adoption of one or more of the major technology applications flourish (e.g. hybrid vehicles, wind turbines, etc.). On the supply side, it is difficult to predict if other non-Chinese producers will come on-line. There is not enough information available to be able to make an accurate forecast. Accordingly, Scott Wilson RPA chose to hold prices constant from 2015 onwards and Avalon agrees with this decision. Table 18-23 shows a comparison between current Chinese REO prices and Chinese FOB prices for 2014. Table 18-23 2010 Versus 2014 FOB Prices for REO Avalon Rare Metals Inc. – Thor Lake Project Rare Earth Oxide FOB China* China Prices Percent Change July 21, 2010 AM and MP prices (US$/kg) 2014 FOB (US$/kg) La 2 O 3 $8.23 $4.06 -50.64% Ce 2 O 3 $6.78 $2.08 -69.33% Pr 2 O 3 $37.15 $43.87 18.08% Nd 2 O 3 $38.25 $46.06 20.43% Sm 2 O 3 $3.93 $5.58 42.02% Eu 2 O 3 $544.00 $1,086.10 99.65% Gd 2 O 3 $10.35 $13.70 32.41% Tb 4 O 7 $538.50 $1,166.09 116.54% Dy 2 O 3 $275.50 $254.59 -7.59% Ho 2 O 3 - $66.35 - Er 2 O 3 - $48.92 - Lu 2 O 3 - $522.83 - Y 2 O 3 $11.50 $23.22 101.92% * Prices represent the midpoint of the AM and MP ranges averaged together with the exception of Gd Oxide an Y Oxide which are not <strong>report</strong>ed by Asian Metal and represent only the Metal Pages prices Technical Report 43-101 – March 13, 2011 Page 18-83 Prepared by Avalon Rare Metals Inc.
Determine Prices for Avalon’s Product Metallurgical tests have shown that the rare earth elements can be precipitated as a bulk oxide concentrate. This product requires further processing to match the pricing basis of separated, 99% pure REOs. Pay factors for individual REOs contained in a mixed concentrate are highly variable and dependent largely on supply and demand at the time of separation, and sales contracts for the particular separator involved. Scott Wilson RPA reviewed Avalon’s assumptions for the various pay factors for the HREOs and LREOs and determined that they were reasonable and consistent with current industry norms in China. Further, Scott Wilson RPA (2010) suggested that there was no reason to believe there will be significant changes to the factors in the future. A final price for Avalon’s proposed rare earth oxide product is then determined by multiplying the average concentration of the individual rare earth oxides in the rare earth carbonate concentrate by the individual rare earth oxide prices and the payable factors as detailed above. This results in an average price for the rare earth carbonate product in 2014 of US$21.94/kg. This price has been used in preparing the financial analysis detailed in the <strong>report</strong>. Avalon understands that separation of the REE into multiple fractions will attract higher prices. However, at this time it is not possible to estimate this increase, as no data is available on the differential between unseparated and partially separated REE. Consequently, for the purposes of the pre-feasibility study, the base case has been a single REO concentrate. Research into the pricing of separated REE is also recommended to determine the factors suitable for two products and three product situations, which are assumed to attract higher factors. NIOBIUM Niobium Market Niobium is a refractory metal closely associated with tantalum. Niobium is produced as a primary concentrate from pyrochlore ore, and as a co-product in the production of tantalum concentrates. Niobium finds its primary uses as an alloying agent in the production of high strength low alloy steels (HSLA), in selected aerospace alloys and in stainless steels. In these applications, the primary product form is as FeNb, TiNb and ZrNb. FeNb has a typical analysis of 66% Nb. FeNb and related alloy products account for over 90% of total niobium consumption. Niobium is also used in electronic and optical applications, in superconducting magnets, fine ceramics, and as a corrosion resistant metal for chemical process equipment. Niobium for these applications is consumed in the form of niobium powder as Nb 2 O 5 , as pure niobium metal and as niobium salts, primarily as the potassium salt K 2 NbF 7 or its derivatives. Reported world production of niobium is detailed in Table 18-24: Technical Report 43-101 – March 13, 2011 Page 18-84 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
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Foraco drill rig was added in Febru
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CORE LOGGING AND CORE RECOVERY The
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A high R 2 (and all regressions had
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12. SAMPLING METHOD AND APPROACH A
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such as Illimausaq in Greenland, a
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13. SAMPLE PREPARATION, ANALYSES AN
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limited set of elements; however, s
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CONCLUSIONS Avalon’s conclusions
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Tb and Dy) were routinely monitored
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As part of the QA/QC program, Avalo
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Table 14-4: Comparison of Niobium,
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shows more deviation, with ALS MS81
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16. MINERAL PROCESSING AND METALLUR
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In a typical test, for example CCr-
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17. MINERAL RESOURCE AND MINERAL RE
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9. TREO equivalent is estimated by
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Table 17-4 Sample Information Avalo
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Figure 17-1 Distribution of REO Com
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Assay Statistics for Upper Zone* *
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CUT-OFF GRADE A previous public res
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underneath for SG measurement purpo
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Figure 17-4 Density Measurements AL
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was equal to 60 m by 60 m by 30 m a
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Table 17-12 Detailed Resource Break
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Table 17-13 Indicated Mineral Resou
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Figure 17-7 Outline of Area of Indi
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The recoveries estimated for the fl
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grades were based upon the grades w
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Figure 18-1 Thor Lake Site Layout T
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Scott Wilson RPA recommends the use
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During discussions with the mine de
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Figure 18-4 Mine Layout Some of the
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Figure 18-5 Mine Development Schema
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Table 18-2 Development Tonnage Brea
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Until the crusher is in place and t
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Lateral Development The access decl
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Equipment will be selected based up
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Table 18-6 Estimated Electrical Loa
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VENTILATION The mine ventilation is
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for closing unused areas and for ch
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Mine Fan Horse Power Using the same
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Paste Fill System A paste fill syst
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Communications Mine communications
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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
Page 163 and 164: Design Basis The pre-feasibility le
Page 165 and 166: non-woven geotextile) to prevent da
Page 167 and 168: divert surface drainage away from r
Page 169 and 170: A high pressure (200 psi) compresse
Page 171 and 172: Fuel deliveries are assumed to be s
Page 173 and 174: Mill Supplies The key mill supplies
Page 175 and 176: Table 18-15 Surface Equipment Fleet
Page 177 and 178: Figure 18-10 Thor Lake Temporary Ba
Page 179 and 180: • Together with the unloading log
Page 181 and 182: it will be necessary to upgrade the
Page 183 and 184: Table 18-16 Hydrometallurgical Plan
Page 185 and 186: Table 18-17 Surface Mobile Equipmen
Page 187 and 188: Rare Earth FOB China* FOB China** P
Page 189 and 190: • loparite and eudialyte in alkal
Page 191 and 192: Table 18-18 Rare Earth supply - 200
Page 193 and 194: Table 18-20 Rare Earth Demand by Ap
Page 195 and 196: Table 18-22 Proposed New REO Projec
Page 197: in China. On this basis, Avalon is
Page 201 and 202: The balance of niobium supply is co
Page 203 and 204: epresenting about 18% of total zirc
Page 205 and 206: Table 18-25 Historic Chinese Export
Page 207 and 208: Figure 18-16 Tantalum Markets - 200
Page 209 and 210: the price for tantalum chemicals in
Page 211 and 212: Surface Hydrology The Thor Lake dra
Page 213 and 214: seven) have occurred more frequentl
Page 215 and 216: elative to uranium, the overall eff
Page 217 and 218: interviews conducted for the nearby
Page 219 and 220: Wildlife Early science-based wildli
Page 221 and 222: Other environmental permits/approva
Page 223 and 224: TAXES The NWT diesel tax has been i
Page 225 and 226: Table 18-31 Mine Capital Cost Estim
Page 227 and 228: Table 18-33 Surface Infrastructure
Page 229 and 230: Table 18-36 Indirect Cost Estimate
Page 231 and 232: Table 18-37 Contingency Allowance A
Page 233 and 234: Operating Cost Exclusions The opera
Page 235 and 236: Table 18-40 Underground Mine Cost S
Page 237 and 238: Table 18-41 Mine Cost Details Avalo
Page 239 and 240: Thor Lake Surface The Thor Lake sur
Page 241 and 242: Table 18-45 Sales and Marketing Cos
Page 243 and 244: Table 18-47 Rail Car Load Limits Av
Page 245 and 246: there will be no overhauls in the i
Page 247 and 248: 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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