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

OPERATING COST ESTIMATE
An operating cost estimate has been compiled for all phases of the project by Scott Wilson RPA
(2010). The estimate was compiled from work by Melis (flotation plant costs and
hydrometallurgical plant capital cost), J.R. Goode and Associates (hydrometallurgical plant
operating costs) and Scott Wilson RPA. The costs are shown in Table 18-39 for the initial 1,000
tpd operating phase, the subsequent expansion to 2,000 tpd and for the LOM average. The
operating costs in the expansion year were estimated as an average of the costs in the
preceding and following years. The LOM average operating cost per tonne is C$266.92
including mining, processing at site and at the hydrometallurgical plant and freight of the product
to a point of sale.
Table 18-39 Operating Cost Estimate
Avalon Rare Metals Inc. – Thor Lake Project
Life of Mine 1,000 tpd 2,000 tpd
C$/t milled C$/t milled C$/t milled
Thor Lake
Mining 37.00 43.86 35.88
Processing (Power Removed) 25.85 31.98 24.87
Surface Services 6.54 10.30 6.11
Administration 11.57 15.76 11.01
Power 28.89 12.23 10.90
Summer Freight 11.47 36.21 27.07
Pine Point
Processing 123.87 137.33 119.88
Surface Services 1.86 4.78 2.26
Administration 2.56 11.20 10.18
Power 5.46 3.88 5.48
Sales and Marketing 11.86 3.43 1.64
Total Operating Costs 266.92 310.95 255.27
Total Annual Cost 113,497,924 186,349,391
Operating costs is this section, including the costs at Pine Point, when shown on a per tonne
basis are per tonne of ore milled at Thor Lake.
Technical Report 43-101 – March 13, 2011 Page 18-117
Prepared by Avalon Rare Metals Inc.