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

Table 18-27 Zirconia Prices, FOB China
Avalon Rare Metals Inc. – Thor Lake Project
Date Low US$/t High US$/t Basis
15-Jan-10 2,856 2,900 98% ZrO2
27-Aug-09 2,898 2,927 98% ZrO2
08-Oct-08 3,212 3,212 99% ZrO2
28-May-08 2,857 3,429 99% fused zirconia
02-Feb-08 3,424 4,932 99.5% fused zirconia
Average 3,049.40 3,480.00
Overall Average 3,264.70
These data show a fairly stable, though slightly declining, price with an average of US$3.26/kg
ZrO 2 from 2008-2010.
The most recent Roskill <strong>report</strong> on Zirconium (2007) is now somewhat dated. The Roskill <strong>report</strong>
noted that zirconia pricing has been relatively stable for some considerable time, and the price
compares fairly well with that derived from the other methods.
Based on the analysis detailed above, Scott Wilson RPA adopted a price of US$3.25 per kg of
ZrO 2 recovered in the Thor Lake hydrometallurgical process. Given the generally stable prices
for zirconia and ZOC, Scott Wilson RPA applied an inflationary factor to establish a ZrO 2 price in
2014 and has used the price of US$3.77/kg in the financial analysis. Avalon agrees with these
conclusions of Scott Wilson RPA.
TANTALUM
Tantalum Market
The Avalon hydrometallurgical plant is expected to produce tantalum as tantalum oxide or as a
potassium salt. Tantalum is a refractory metal closely associated with niobium. The primary use
for tantalum is as the oxide, Ta 2 O 5 , for use in high performance capacitors for electronics.
Tantalum also finds application in other electrical and electronic applications; as an alloying
agent in the production of various high temperature superalloys; as a carbide in the production
of cutting tools; and in the form of tantalum metal for chemical process equipment (Figure 18-
16).
World tantalum demand in 2008 was estimated at approximately 6.1 million pounds contained
Ta (Figure 18-17) and is projected to grow to approximately 7 million pounds by 2012 (Figure
18-18), assuming a 4% per annum compound growth rate.
Technical Report 43-101 – March 13, 2011 Page 18-91
Prepared by Avalon Rare Metals Inc.