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

Table 18-36 Indirect Cost Estimate
Avalon Rare Metals Inc. – Thor Lake Project
C$ '000
Engineering (Pine Point and Thor Lake) 14,640
Procurement (Pine Point and Thor Lake) 8,115
Construction Management (Thor Lake) 21,554
Owners Costs 13,497
Construction Freight to Thor Lake 6,315
Construction Management (Pine Point) 8,978
Owners Costs (Pine Point) 7,557
Total 80,657
The procurement for the project is forecast to extend over a two year period with a crew of eight
working on purchasing, expediting, payables and some level of freight handling. The
construction management at Thor Lake is forecast to include a staff of eight management
personnel for a two year period. After construction some of the personnel will continue on with
operations. Supervisor salary rates for this period reflect the overtime in a remote construction
effort.
The construction support crew are the employees to operate cranes, forklifts and trucks and to
serve as labourers to support the construction efforts. This is a crew of six whose salaries are
based upon overtime schedules. The cost estimate includes numerous construction support
items that would in a less remote location be rented or provided by subcontractors as required.
The Owners costs include an Owner’s team of 15 staff for a full year prior to the commencement
of operations. Travel for the team R&R is included. Charter air craft flights to the site from
Yellowknife are include on the basis of two flights per week over a two year period, the rate is
suitable for a Twin Otter or King Air aircraft. The Twin Otter offers a larger payload and more
personnel capacity.
Catering for the site crews will be contracted and handled by the Owner. The catering estimate
is based on 100 men on site for two full years at a rate of C$40.64 per man day based on recent
camp operating costs for similar size camps. Camp power is included as a 500 kW draw for
camp operations over a two year period at a cost of C$0.24/kW-hr.
Employee induction and safety training is proposed by Avalon and the cost of a 40 hour course
for an estimated 150 total staff at an average cost of C$30 per hour. In addition a labour cost
for operating personnel brought to site in advance of the “start up” has been included. The
Technical Report 43-101 – March 13, 2011 Page 18-114
Prepared by Avalon Rare Metals Inc.