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

Mill
Mill operating costs were estimated by Melis and are summarized below in Table 18-42. The
mill operating cost details are discussed in more detail in the memorandum by Melis. For the
operating cost estimate, Scott Wilson RPA deducted the power cost from the estimate by Melis
and included the power costs as a single budget line item. Scott Wilson RPA also added an
allowance for the NWT payroll tax which has not been included by Melis.
Table 18-42 Mill Cost Details
Avalon Rare Metals Inc. – Thor Lake Project
Notes:
1,000 tpd 2,000 tpd
C$ pa C$ pa
Mill Labour 5,175,970 5,869,695
Reagents 3,573,350 7,168,600
Comminution Media 1,865,150 3,723,000
Maintenance Consumables Allowance 1,058,500 1,394,300
Total 11,672,970 18,155,595
Cost per tonne $31.98 $24.87
1. The estimated operating costs are based on the listed line items identified to the level of detail available for
the pre-feasibility. The accuracy of the operating cost estimate is considered at a pre-feasibility level only in
keeping with the +/- 25% level of accuracy of the overall pre-feasibility study.
2. The operating personnel costs are based on the minimum number of operating and maintenance personnel
required to operate the facility using experienced workers, and on salaries provided by Avalon.
3. The reagent and comminution media costs, based on first quarter 2010 budget pricing obtained from
suppliers, include an operating period freight cost from Edmonton to Thor Lake site of $90/tonne provided by
Avalon.
4. The reagent costs are based on average mid-range consumptions provided by Avalon. The minimum and
maximum ranges provided in this <strong>report</strong> imply that the reagent cost is more appropriately noted as
$9.79/tonne ± $2.50/tonne.
5. Two percent of capital cost of equipment, excluding crushers, grinding mills, screens and building.
6. Based on electrical power cost of $0.22/kWh at the Thor Lake site (Dennis Bergen email dated January 26,
2010; this cost was adjusted slightly upward to $0.228/kWh at the May 5, 2010 review meeting which brings
the $14.55/tonne power cost up to $15.08/tonne, an increase of $0.53/tonne).
7. The operating power was estimated at an average of 54% of peak power demand. Every 5% increase in the
average operating power would increase the operating cost by $1.35/tonne.
8. Heating is assumed to be provided by waste heat from power generation and process equipment.
Technical Report 43-101 – March 13, 2011 Page 18-123
Prepared by Avalon Rare Metals Inc.