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

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6. HISTORY The history of the project site has been described in the Technical Report completed by Scott Wilson RPA in 2010 (Scott Wilson RPA, 2010) and the information will be summarized here. The Thor Lake site area was first mapped by J.F. Henderson and A.W. Joliffe of the Geological Survey of Canada (GSC) in 1937 and 1938. The first staking activity at Thor Lake dates from July 1970 when Odin 1-4 claims were staked by K.D. Hannigan for uranium. Shortly after, the Odin claims were optioned to Giant Yellowknife Mines Ltd. and subsequently, in 1970, were acquired by Bluemount Minerals Ltd. In 1971, the GSC outlined a radioactive anomaly over the Thor Lake area (GSC Open File Report 124). A. Davidson of the GSC initiated mapping of the Blatchford Lake Intrusive Complex. It has subsequently become clear that this radiometric anomaly is largely due to elevated thorium levels in the T-Zone within the Thor Lake site. In 1976, Highwood discovered niobium and tantalum on the Thor Lake property. From 1976 to 1979, exploration programs included drilling, geological mapping, sampling and trenching on the Lake, Fluorite, R-, S- and T-zones. This work resulted in the discovery of significant concentrations of niobium, tantalum, yttrium and REEs. Recognizing a large potential resource at Thor Lake, Placer Development Ltd. (Placer) optioned the property from Highwood in March 1980 to further investigate the tantalum and related mineralization. The exploration included drilling twenty one holes in 1980 – 1981. Preliminary metallurgical scoping work was also conducted, but Placer relinquished its option in April 1982. From 1983 to 1985, the majority of the work on the property was concentrated on the T-Zone and included geochemical surveys, berylometer surveys, surface mapping, significant drilling, surface and underground bulk sampling, metallurgical testing and a detailed evaluation of the property by Unocal Canada. However, seven holes were also drilled in the Lake Zone (Nechalacho deposit) to test for high grade tantalum-niobium mineralization. In August of 1986, the property was joint-ventured with Hecla Mining Company of Canada Ltd. (Hecla). However, in 1990, Hecla withdrew from the project. In 1990, control of Highwood passed to Conwest Exploration Company Ltd. (Conwest) and the Thor Lake project remained dormant until 1996. Through subsequent ownership changes, Highwood ended up controlled by Royal Oak Mines Ltd. Royal Oak’s subsequent bankruptcy in 1999 resulted in the acquisition of the control block of Highwood shares by Dynatec Corporation (Dynatec). In 2000, Highwood initiated metallurgical, marketing and environmental reviews by Dynatec. Through 2001 to 2004, Navigator Exploration Corp. optioned the property and conducted additional metallurgical research on the possibility of Technical Report 43-101 – March 13, 2011 Page 6-1 Prepared by Avalon Rare Metals Inc.
producing a tantalum concentrate, but dropped the property when tantalum prices dropped. Meanwhile, Beta Minerals Inc. (Beta) acquired Highwood’s interest in the property in November 2002 under a plan of arrangement with Dynatec. No work was conducted by Beta and in May of 2005 Avalon purchased from Beta a 100% interest and full title, subject to royalties, to the Thor Lake property. In 2005, Avalon conducted extensive re-sampling of archived Lake Zone drill core to further assess the yttrium and HREE resources on the property. In 2006, Wardrop was retained to conduct a preliminary economic evaluation (PEA) of the Thor Lake deposits (Preliminary Economic Assessment on the Thor Lake Rare Metals Project, NT” Wardrop Document No. 0551530201-REP-R0001-03). In 2007 and 2008 Avalon commenced further drilling of the Lake Zone. This led to a further <strong>technical</strong> <strong>report</strong> on the property (Thor Lake – Lake Zone Mineral Resource Update, March 2009, Wardrop Document No. 0851530201-REP-R0002-01). In 2010, Scott Wlison RPA completed a Prefeasibility Study of the Project (Scott Wilson RPA, 2010, “Technical Report on the Thor Lake Project, Northwest Territories, Canada)) Technical Report 43-101 – March 13, 2011 Page 6-2 Prepared by Avalon Rare Metals Inc.
Page 1 and 2: TECHNICAL REPORT ON THE NECHALACHO
Page 3 and 4: TABLE OF CONTENTS 1. SUMMARY ......
Page 5 and 6: QUALITY ASSURANCE / QUALITY CONTROL
Page 7 and 8: Warehouse..........................
Page 9 and 10: LIST OF TABLES Table 1-1 Summary of
Page 11 and 12: Table 18-9 Mine Ventilation Quantit
Page 13 and 14: Table 18-54 Table 18-55 Pine Point
Page 15 and 16: LIST OF APPENDICES APPENDIX A Block
Page 17 and 18: Table 1-1 Summary of Mineral Resour
Page 19 and 20: Royalties. The net revenue generate
Page 21 and 22: • The products will be shipped in
Page 23 and 24: • Income taxes and NWT mining roy
Page 25 and 26: 2. INTRODUCTION This report
Page 27 and 28: Figure 2-2 Project Sites, Thor Lake
Page 29 and 30: Table 2-1 Rare Earth Element Data A
Page 31 and 32: LIST OF ABBREVIATIONS Units of meas
Page 33 and 34: 4. PROPERTY DESCRIPTION AND LOCATIO
Page 35 and 36: The mining leases have a 21-year li
Page 37 and 38: 5. ACCESSIBILITY, CLIMATE, LOCAL RE
Page 39: Fort Resolution is located on the s
Page 43 and 44: Figure 7-2 Detailed Deposit Geology
Page 45 and 46: The nepheline-sodalite syenite host
Page 47 and 48: LATE TECTONIC FAULTS Faults are pre
Page 49 and 50: 8. DEPOSIT TYPES The mineral deposi
Page 51 and 52: The Ore (Nechalacho) Nepheline Soda
Page 53 and 54: from section to section - this may
Page 55 and 56: Table 9-1 Average Percent of Ore Mi
Page 57 and 58: The Nechalacho deposit alteration s
Page 59 and 60: 11. DRILLING Since 1977, diamond dr
Page 61 and 62: Foraco drill rig was added in Febru
Page 63 and 64: CORE LOGGING AND CORE RECOVERY The
Page 65 and 66: A high R 2 (and all regressions had
Page 67 and 68: 12. SAMPLING METHOD AND APPROACH A
Page 69 and 70: such as Illimausaq in Greenland, a
Page 71 and 72: 13. SAMPLE PREPARATION, ANALYSES AN
Page 73 and 74: limited set of elements; however, s
Page 75 and 76: CONCLUSIONS Avalon’s conclusions
Page 77 and 78: Tb and Dy) were routinely monitored
Page 79 and 80: As part of the QA/QC program, Avalo
Page 81 and 82: Table 14-4: Comparison of Niobium,
Page 83 and 84: shows more deviation, with ALS MS81
Page 85 and 86: 16. MINERAL PROCESSING AND METALLUR
Page 87 and 88: In a typical test, for example CCr-
Page 89 and 90: 17. MINERAL RESOURCE AND MINERAL RE
Page 91 and 92:
9. TREO equivalent is estimated by
Page 93 and 94:
Table 17-4 Sample Information Avalo
Page 95 and 96:
Figure 17-1 Distribution of REO Com
Page 97 and 98:
Assay Statistics for Upper Zone* *
Page 99 and 100:
CUT-OFF GRADE A previous public res
Page 101 and 102:
underneath for SG measurement purpo
Page 103 and 104:
Figure 17-4 Density Measurements AL
Page 105 and 106:
was equal to 60 m by 60 m by 30 m a
Page 107 and 108:
Table 17-12 Detailed Resource Break
Page 109 and 110:
Table 17-13 Indicated Mineral Resou
Page 111 and 112:
Figure 17-7 Outline of Area of Indi
Page 113 and 114:
The recoveries estimated for the fl
Page 115 and 116:
grades were based upon the grades w
Page 117 and 118:
Figure 18-1 Thor Lake Site Layout T
Page 119 and 120:
Scott Wilson RPA recommends the use
Page 121 and 122:
During discussions with the mine de
Page 123 and 124:
Figure 18-4 Mine Layout Some of the
Page 125 and 126:
Figure 18-5 Mine Development Schema
Page 127 and 128:
Table 18-2 Development Tonnage Brea
Page 129 and 130:
Until the crusher is in place and t
Page 131 and 132:
Lateral Development The access decl
Page 133 and 134:
Equipment will be selected based up
Page 135 and 136:
Table 18-6 Estimated Electrical Loa
Page 137 and 138:
VENTILATION The mine ventilation is
Page 139 and 140:
for closing unused areas and for ch
Page 141 and 142:
Mine Fan Horse Power Using the same
Page 143 and 144:
Paste Fill System A paste fill syst
Page 145 and 146:
Communications Mine communications
Page 147 and 148:
completion of the 30 m to 50 m long
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 and 198:
in China. On this basis, Avalon is
Page 199 and 200:
Determine Prices for Avalon’s Pro
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
Page 249 and 250:
Table 18-55 Hydrometallurgical Plan
Page 251 and 252:
Table 18-56 Cash Flow Summary Techn
Page 253 and 254:
The sensitivity of the base case 8%
Page 255 and 256:
19. INTERPRETATION AND CONCLUSIONS
Page 257 and 258:
• The Mineral Reserves, which hav
Page 259 and 260:
20. RECOMMENDATIONS The authors of
Page 261 and 262:
21. REFERENCES BCC Research (2009):
Page 263 and 264:
MDN Inc (2010): News Release Melvil
Page 265 and 266:
Wardrop Engineering Inc. (2009): Th
Page 267 and 268:
23. CERTIFICATES OF QUALIFIED PERSO
Page 269 and 270:
CERTIFICATE OF QUALIFIED PERSON I,
Page 271 and 272:
CERTIFICATE OF QUALIFIED PERSON I,
Page 273 and 274:
Section 416000 Section 416100 Secti
Page 275 and 276:
Page 277 and 278:
Page 279 and 280:
Technical Report 43-101 - March 13,
Page 281 and 282:
Page 283 and 284:
Page 285 and 286:
Page 287 and 288:
Page 289:
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