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

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10. EXPLORATION The Thor Lake Property has been systematically explored for several different metals over a period of 30 years (see History, Section 6.0). Exploration focus has shifted as new discoveries, such as beryllium, were made, or in response to price increases for tantalum, yttrium and HREE, or for example, because of improved methods of recovery of tantalum. Since taking over the property in 2005, Avalon has sampled archived drill cores from the Nechalacho deposit to extend the area of known yttrium and REE. This led to completion of a <strong>technical</strong> <strong>report</strong> by Wardop in 2007. This <strong>technical</strong> <strong>report</strong> included a resource estimate and recommended further work including diamond drilling. Starting in August 2007, Avalon has conducted continuous drill campaigns, except to stop for freeze-up and break-up periods. The details of these drilling campaigns are given in section 11 below. An airborne magnetic survey was completed in winter 2009 to aid in mapping the local geology and structure. In addition to drilling and geophysics, Avalon has supported three M.Sc. theses (two from McGill University and two from Switzerland) and two PhD theses (McGill University and University of Windsor). These theses have aided in understanding the regional and local geology, and detailed mineralogy of the Nechalacho deposit. In addition, the company has supplied logistical support to a regional PhD thesis (Carlton University) on the whole Blachford Complex. The exploration work completed on the property has led to the interpretation of the geology and mineralization given in sections 7, 8 and 9 above. As a result of the exploration conducted by previous owners of the property, and by Avalon, in the opinion of the authors, the property merits continuing to advanced development, including completion of a feasibility study. Technical Report 43-101 – March 13, 2011 Page 10-1 Prepared by Avalon Rare Metals Inc.
11. DRILLING Since 1977, diamond drilling has been carried out intermittently by various operators over five separate mineralized zones at Thor Lake. A total of 51 holes (5,648 m) had been completed on the Nechalacho deposit through to 1988 (see section on History). As the geology was poorly understood, the drilling frequently did not penetrate the Basal Zone, and the results are often not useful for the present resource model. Also, as noted elsewhere, modern QA/QC practices were not followed and samples were only analyzed for only four to six elements. Modern cheap and reliable multi element analytical methods were not available. Consequently the historic drilling, in general, is not so useful for the resource estimation. RECENT DRILLING Avalon commenced diamond drilling in the Nechalacho deposit in July 2007. Drilling was organized into seven separate drill programs: • July to October 2007: 13 holes totaling 2,550 m (BTW diameter) • January to May 2008: 45 holes totaling 8,725 m, including 11 metallurgical holes totaling 2,278 m (NQ2 diameter) • June to September 2008: 27 holes totaling 5,565 m (NQ2 diameter) • February to May 2009: 26 holes totaling 5,474 metres (NQ2 diameter) • July to October 2009: 44 holes totaling 9,098 metres (HQ diameter) • January to April 2010: 33 holes totaling 7,970 metres (HQ diameter) • January to April 2010: 10 holes for 11,512 metres (HQ diameter) • July to October 2010: 41 holes totaling 11,512 metres (HQ diameter) • July to October 2010: 22 holes for 4,676 metres (PQ diameter) The goal of the drilling was to continue to delineate zones of REE and Ta mineralization. The initial drilling (2007-2008) was completed largely at a spacing of approximately 150 m by 150 m. Eleven tightly-spaced inclined holes (L08-099 to L08-109) were drilled to obtain a mini-bulk sample for continued metallurgical work on REE-enriched zones. Six of the earlier holes were also re-assayed to test for the full suite of REE as was done on the recent drilling. Starting with the February 2009 program, the drill spacing was reduced and this resulted in intercepts at approximately 50 m centres. This spacing also allowed the resource estimate to be upgraded from Inferred to Indicated Resources as recommended in the Wardrop <strong>report</strong> (March 2009). This drilling also focused on the south-eastern part of the deposit where the Basal Zone has higher TREO grades but also higher HREO grades (along with thicker intercepts). There was also an emphasis on utilizing drill setups for multiple intercepts of the Basal Zone in order to reduce drill moves, generate more structural information by intersecting Technical Report 43-101 – March 13, 2011 Page 11-1 Prepared by Avalon Rare Metals Inc.
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TECHNICAL REPORT ON THE NECHALACHO
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TABLE OF CONTENTS 1. SUMMARY ......
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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 and 40: Fort Resolution is located on the s
Page 41 and 42: producing a tantalum concentrate, b
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: The Nechalacho deposit alteration s
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
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Table 17-13 Indicated Mineral Resou
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Figure 17-7 Outline of Area of Indi
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The recoveries estimated for the fl
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grades were based upon the grades w
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Figure 18-1 Thor Lake Site Layout T
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Scott Wilson RPA recommends the use
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During discussions with the mine de
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Figure 18-4 Mine Layout Some of the
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Figure 18-5 Mine Development Schema
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Table 18-2 Development Tonnage Brea
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Until the crusher is in place and t
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Lateral Development The access decl
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Equipment will be selected based up
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Table 18-6 Estimated Electrical Loa
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VENTILATION The mine ventilation is
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for closing unused areas and for ch
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Mine Fan Horse Power Using the same
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Paste Fill System A paste fill syst
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Communications Mine communications
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completion of the 30 m to 50 m long
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HEALTH AND SAFETY All crew will be
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The crushing plant is designed for
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Table 18-12 (Cont’d) Principal Pr
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Figure 18-9 Hydrometallurgical Plan
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The Pine Point hydrometallurgical f
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Decant pipeworks have been included
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• Development of pre-feasibility
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Design Basis The pre-feasibility le
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non-woven geotextile) to prevent da
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divert surface drainage away from r
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A high pressure (200 psi) compresse
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Fuel deliveries are assumed to be s
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Mill Supplies The key mill supplies
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Table 18-15 Surface Equipment Fleet
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Figure 18-10 Thor Lake Temporary Ba
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• Together with the unloading log
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it will be necessary to upgrade the
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Table 18-16 Hydrometallurgical Plan
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Table 18-17 Surface Mobile Equipmen
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Rare Earth FOB China* FOB China** P
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• loparite and eudialyte in alkal
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Table 18-18 Rare Earth supply - 200
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Table 18-20 Rare Earth Demand by Ap
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Table 18-22 Proposed New REO Projec
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in China. On this basis, Avalon is
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Determine Prices for Avalon’s Pro
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The balance of niobium supply is co
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epresenting about 18% of total zirc
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Table 18-25 Historic Chinese Export
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Figure 18-16 Tantalum Markets - 200
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the price for tantalum chemicals in
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Surface Hydrology The Thor Lake dra
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seven) have occurred more frequentl
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elative to uranium, the overall eff
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interviews conducted for the nearby
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Wildlife Early science-based wildli
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Other environmental permits/approva
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TAXES The NWT diesel tax has been i
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Table 18-31 Mine Capital Cost Estim
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Table 18-33 Surface Infrastructure
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Table 18-36 Indirect Cost Estimate
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Table 18-37 Contingency Allowance A
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Operating Cost Exclusions The opera
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Table 18-40 Underground Mine Cost S
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Table 18-41 Mine Cost Details Avalo
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Thor Lake Surface The Thor Lake sur
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Table 18-45 Sales and Marketing Cos
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Table 18-47 Rail Car Load Limits Av
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there will be no overhauls in the i
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Other supplies and freight will be
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Table 18-55 Hydrometallurgical Plan
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Table 18-56 Cash Flow Summary Techn
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The sensitivity of the base case 8%
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19. INTERPRETATION AND CONCLUSIONS
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• The Mineral Reserves, which hav
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20. RECOMMENDATIONS The authors of
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21. REFERENCES BCC Research (2009):
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MDN Inc (2010): News Release Melvil
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Wardrop Engineering Inc. (2009): Th
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23. CERTIFICATES OF QUALIFIED PERSO
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CERTIFICATE OF QUALIFIED PERSON I,
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CERTIFICATE OF QUALIFIED PERSON I,
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Section 416000 Section 416100 Secti
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Page 277 and 278:
Page 279 and 280:
Technical Report 43-101 - March 13,
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