Corporate Presentation - Avalon Rare Metals

Corporate Presentation 

Don S. Bubar, P.Geo. 

President & CEO 

October 19, 2009 

TSX:AVL 

OTCQX:AVARF 

…Advancing Green Technology 

TSX:AVL www.avalonraremetals.com 

1

Safe Harbour Statement 

Forward looking information 

Certain statements contained in or incorporated by reference into this 

presentation constitute forward-looking statements. Such statements 

reflect the current views of Avalon Rare Metals Inc. with respect to 

future events and are subject to certain risks, uncertainties and 

assumptions. Many factors could cause the actual results, performance 

or achievements of Avalon Rare Metals Inc. that may be expressed or 

implied by such forward-looking statements to vary from those 

described herein should one or more of these risks or uncertainties 

materialize. Avalon Rare Metals Inc. does not intend, and does not 

assume any obligation, to update these forward-looking statements. 

TSX:AVL 

OTCQX:AVARF www.avalonraremetals.com 2

Rare Metals: Key to the Green 

Energy Economy 

Rare earth elements (“REE”) such as Neodymium, 

Terbium and Dysprosium; & other rare metals such as 

Lithium, Gallium, Indium, Tantalum, Zirconium 

Creating new materials such as thin films (solar) and high 

strength magnets, the key to energy-efficient electric motors 

Renewable energy: solar power and wind turbines 

LED lighting, rechargeable batteries, light weight alloys 

Hybrid and electric cars (30 kg REE) 

TSX:AVL 


Project Locations 

Avalon offers 

diversified 

exposure to a 

broad range 

of rare metals 

THOR LAKE 

Rare Earths 

Tantalum 

Niobium 

Zirconium 

Beryllium 

Gallium 

Lithium 

Hafnium 

Thorium 

All projects 100% owned 

TSX:AVL 


What are Rare Earth Elements 

Light REE: 

La = Lanthanum 

Ce = Cerium 

Pr = Praseodymium 

Nd = Neodymium 

Sm = Samarium 

Heavy REE: 

Eu = Europium 

Gd = Gadolinium 

Tb = Terbium 

Dy = Dysprosium 

Ho = Holmium 

Er = Erbium 

Tm = Thulium 

Yb = Ytterbium 

Lu = Lutetium 

Y = Yttrium 

Neodymium, Dysprosium, Terbium and Europium in highest demand 

TSX:AVL 


Rare Earth Economics: 

A Question of Balance 

Only occur altogether as a group and recovered as a group 

and must be sequentially separated at additional cost 

In most deposits, the balance is tipped toward the light rare 

earths (“LREE”) which comprise 97-99% of resource 

Deposits having an unusual balance with a high proportion of 

heavy rare earths (“HREE”) are very rare 

Consequently, HREE are much more valuable 

US$450.00/kg for europium vs. US$4.50/kg for cerium 

Basal Zone of Nechalacho deposit is exceptional among hard 

rock REE deposits for its high proportion of HREE ( >20%) 

TSX:AVL 


Rare Earth Element Prices 

Source: Metal-Pages.com, October 13, 2009 

Prices are indicative and basis FOB China 

Metal Oxide Principal Uses Price US$/kg 

Lanthanum Oxide 99% min Re-chargeable Batteries 4.40 – 4.90 

Cerium Oxide 99% min Catalyst, glass, polishing 3.50 – 4.00 

Praseodymium Oxide 99% min Magnets, glass colourant 14.20 – 14.70 

Neodymium Oxide 99% min Magnets, lasers, glass 14.70 – 15.20 

Samarium Oxide 99% min Magnets, lighting, lasers 4.25 – 4.75 

Heavy Rare Earths 

Europium Oxide 99% min TV colour phosphors: red 470.00 – 490.00 

Terbium Oxide 99% min Phosphors: green, magnets 340.00 – 360.00 

Dysprosium Oxide 99% min Magnets, lasers 105.00 – 110.00 

Gadolinium Oxide 99%min Magnets, superconductors 5.00 – 5.50 

Yttrium Oxide 99.999% min Phosphors, ceramics, lasers 10.00 – 10.50 

TSX:AVL 


Price Trends: 

Europium & Yttrium Oxide 

Source: Metal-Pages.com basis FOB China 

Eu Current Price: 

US$495/kg 

Y Current Price: 

US$10.50/kg 

TSX:AVL 


China Dominates REE 

Production 

China currently produces 

over 95% of global REE 

supply 

China now imposing export 

quotas and tariffs on REE 

New non-Chinese supply 

sources needed to maintain 

balance 

Supplies of key HREE (Y, 

Dy, Tb) will remain tight 

Japan totally reliant on China 

for supplies 

Source: USGS 

Question: Is the USA willing to 

substitute its reliance on foreign 

sources of oil for a reliance on a 

single foreign source of REE 

TSX:AVL 


Global Rare Earths Market 

Demand tpa ‐ REO 

IMCOA 2009 updated market forecast 

250,000 

200,000 

150,000 

100,000 

50,000 

0 

2004 

2005 

2006 

2007 

2008 

2009f 

2010f 

2011f 

2012f 

2013f 

2014f 

China Supply ROW Supply Adjusted Global Demand China Demand 

ROW = rest of world supply (yet to come on stream) 

REO = Rare Earth Oxides 

Global demand in 2008 

124,000 tonnes TREO valued 

at US$1.25 billion 

Forecast demand in 2014 

200,000 tonnes TREO valued 

at US$2-3 billion, assuming 

10% per annum growth rate in 

demand from existing 

technology only 

Does not factor in demand 

from new technology 

Estimated that 25% of all new 

technologies rely on REE 

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Comparison of some Significant 

Rare Earth Deposits I 

Source: IMCOA 2009 

Deposit 

Resource 

(million 

tonnes) 

Grade 

(% TREO) 

TREO 

(million 

tonnes) 

HREE 

Content 

(% TREO) 

Cut-off Grade 

Bayan Obo, China 1,460 3.9% 56 2% n/a 

Kvanefjeld, Greenland 215 1.0% 2.6 14% 0.015% U 3 

O 8 

Mountain Pass, USA 20 9.2% 1.8 1% 5% REO 

Nechalacho, Canada 65 2.1% 1.3 20% 1.6% REO 

Mt Weld, Australia 12 9.7% 1.2 3% 2.5% REO 

Nolans, Australia 30 2.8% 0.9 4% 1.2% REO 

Dong Pao, Vietnam 11 6.9% 0.8 n/a 6.9% REO 

Bear Lodge, USA 9 4.1% 0.4 n/a 1.5% REO 

Hoidas Lake, Canada 1.5 2.6% 0.04 7% 1.5% REO 

Note: each company publishes their resources/reserves differently to comply with local rules; accordingly, these figures need to be reviewed with care as they do not 

necessarily make allowances for the varying recovering associated with each reserve/resource. 

TSX:AVL 


Comparison of some Significant 

Rare Earth Deposits II 

Source: IMCOA 2009 

n/a 

n/a 

*Not shown on chart for scaling purposes 

Note: each company publishes their resources/reserves differently to comply with local rules; accordingly, these figures need to be reviewed with care as 

they do not necessarily make allowances for the varying recovering associated with each reserve/resource. 

TSX:AVL 


Recent Developments in REE 

Markets 

Chinese interests trying to acquire REE resources outside 

China in Australia (and elsewhere) 

China Non-Ferrous Mining blocked from acquiring 51% interest 

in Lynas Corporation by FIRB (Mount Weld) 

East China Exploration acquires 25% interest in Arafura 

Resources (Nolan’s Bore) 

Chevron sells Molycorp (Mountain Pass Mine) to U.S. private 

equity led by Resource Capital Funds and Goldman Sachs 

China announces further reductions in REE export quotas and 

announces a potential ban on future exports of unprocessed 

HREE: notably dysprosium and terbium 

TSX:AVL 


Key Application of REE: 

Magnets for Electric Motors 

REE (Neo) Magnets reduce electric motor/generator size 

and weight, improve efficiency 

Major new applications include: 

Industrial air conditioners (500 kg) 

Hybrid-electric cars (30 kg) 

Wind turbines (0.75-1.0 t/Mw) 

MRI machines (1-3 tonnes) 

Use of REE magnets in air conditioners can reduce 

power consumption by 50% with same performance 

HREE dysprosium is key to making “heat resistant” 

magnets vital to automotive and other applications 

100 Kw generator 

with neo magnets 

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REE Magnets in Automotive 

Technology 

TSX:AVL 


Thor Lake: Project Location 

Proximity to 

Great Slave 

Lake provides 

access to 

railhead at 

Hay River by 

barge in 

summer and 

ice road in 

winter. Current 

access is flyin. 

TSX:AVL 


Thor Lake: Mineral Tenure 

Blachford 

Lake 

Lease 3178 

(Lot 1001) 

Lease 3179 

(Lot 1000) 

Grace 

Lake 

T Zone 

Acquired in 2005 for 2.5 million shares 

Previously explored in 1980’s by Highwood 

Five 21-year renewable mining 

leases covering 10,500 acres 

Lease 3265 

(Lot 1005) 

New 

Claims 

Road 

Thor 

Lake Lease 3266 

Lake (Lot 1006) 

Zone 

(Now called “Nechalacho”) 

Lease 3267 

(Lot 1007) 

Hearne Channel 

 

kilometres 

100% owned, subject to 5.5% 

NSR-type royalty interests 

LAND STATUS MAP 

TSX:AVL 


Nechalacho REE Deposit: 

Current Work Program 

2007: Scoping study and $16 million financing 

2008: Delineation drilling programs 16,640 metres, 85 holes 

2009: Definition drilling 10,000 metres, 45 holes (in progress) 

Metallurgical, environmental and market studies 

New 43-101 resource estimate in January 2009 

Accumulating data required to complete PFS by Spring 2010 

2009: $4-5 million budget 

Updated resource 

Metallurgical process 

flowsheet defined 

Community engagement 

$17.5 million financing 

TSX:AVL 


Nechalacho REE deposit: Drill 

Hole Location Map 

E-W 

Section Line 

Key 

Area 

156 

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Nechalacho REE Deposit 

E-W Composite Section 

(looking north, no vertical exaggeration) 

114 

132 131 63 62 113 53 

250m 

97 56A 80-12 118 

Upper LREE Zone 

Basal HREE Zone 

Typically 20m thick, +2% TREO, 20% HREE 

1500m 

Drill Hole with 

Basal Zone 

Intercept 

Hole 118: 2.71% TREO with 34% HREO 

over 17.4 metres 

TSX:AVL 


Nechalacho 43-101 Resources 

Inferred REE resources at 1.60% TREO cut-off-grade 

initially prepared by Wardrop Engineering, updated by 

Hudgtec and reviewed by SWRPA in August 

Total Inferred Resources (Upper and Basal Zones): 

64.2 million tonnes at 1.96% TREO (16.8% HREO) 

Basal Zone Only: 

44.3 million tonnes Inferred at 1.96% TREO (21% HREO) 

4.4 million tonnes Indicated at 1.96% TREO (25.4% HREO) 

2.2 million tonnes Indicated at 2.14% TREO (20% HREO) 

Note: Defining Indicated Resources is a function of drill hole spacing being 

reduced to an average of 50 metres. TREO = total rare earth oxides, 

HREO = heavy rare earth oxides (europium to lutetium + yttrium) 

TSX:AVL 


South Part of Nechalacho: 

Indicated REE Resources 

Wardrop 2.2 MT Indicated 

Resource (2.14% TREO, 

20% HREO) 

Cross section 

Area of current in-fill 

drilling 

New 4.4 MT Indicated 

Resource (1.96% TREO, 

25.4% HREO) 

TSX:AVL 


REE Distribution in the Basal 

Zone Ore Compared with Other 

REE Deposits 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Mt Pass Baotou SichuanMtWeld NolansThorLake 

Value 9.9 11.4 10.5 13.6 14.2 22.1 US$/kg 

Based on fall, 2008 prices from metal-pages.com and criteria defined by Arafura Resources Limited 

SEGYT 

SmEuGdYTb 

Nd,Pr, Dy 

Ce,La 

TSX:AVL 


Nechalacho REE Deposit 

Conceptual Mine Plan 

Mine Portal 

Vent 

Barren Rock Dump 

Long Lake 

Tailings Pond 

Underground Mining 

Upper Zone 

Tailings Storage 

Basal Zone 

Initial mine production rate: 1,000-2,000 t/day of ore through the mill. 

To produce approx. 5,000-10,000 tpy TREO in chemical concentrates… 

equivalent to just 2-5% of est. 2014 market (5-10% of HREO demand). 

Current forecast on operating costs: $200/tonne (mining & processing) 

TSX:AVL 


20μm 

Zircon 

Basal Zone HREE Mineralization 

in Zircon and Fergusonite: 

Metallurgical Recovery Process 

Fergusonite 

REE distribution in fergusonite: 

82-85% REE Recovery in on-site plant 

Fine-grinding (40 micron) 

Froth Flotation 

Hydrometallurgical plant located off-site 

Caustic cracking of REE con followed by 

acid leaching (HCl or H2SO4) will put 

90% of REE plus Zr and Nb into solution 

Solvent extraction then precipitation of 

two mixed REE carbonates (one mainly 

LREE, second mainly HREE) 

Separation of REE oxides (Japan) 

REE Y La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Lu 

Oxide % 29.0 0.30 4.40 1.70 15.6 10.4 1.60 14.3 1.80 9.80 1.20 4.10 0.70 4.40 0.70 

TSX:AVL 


Thor Lake Project: 

Technical Consultants 

David Trueman, Ph.D., P.Geo, Rare Metals Geologist 

Chris Pedersen, P.Geo, Rare Metals Geologist 

Bruce Hudgins, P.Geo. Resource database management 

John Goode, P.Eng. Metallurgical Consultant 

SGS Lakefield Research, Metallurgy & Mineralogy 

Scott Wilson RPA Inc., Pre-Feasibility Study Independent Consultants 

Wardrop Engineering, Independent resource consultants 

Jacques Whitford Stantec, Permitting, Environmental Studies 

Dudley Kingsnorth, IMCOA, REE Market Studies 

Kaz Machida, KAY Investment, REE Market Dev. Asia 

McGill University, Geological Research 

Community, Environment, Health and Safety Advisory Committee: 

Chief Glenn Nolan, Denis Kemp, Jean Cinq-Mars (Chair: Bill Mercer) 

TSX.AVL 


Nechalacho REE Deposit: 

Development Timeline 

VALUE 

2005: $700,000 

• Acquisition 

• Compilation 

2013: $300-400 million 

2007-2008: $7.5 million 

• Production 

• Delineation drilling 

• Metallurgical studies 

2010-2012: $20-30 million 

• Preliminary engineering 

• Bulk sample & feasibility 

• Environmental studies 

• Permitting & MOU 

• Off-take arrangements 

2006 - 2007: $750,000 

• Mine development 

• Scoping study 

2009-2010: $4-5 million 

• Definition drilling 

• Metallurgy & market studies 

• Pre-feasibility study 

• Environmental studies 

TSX:AVL 


Capital Structure 

as at October 14, 2009 

Canada - TSX: AVL 

United States - OTCQX: AVARF SEC 12g3-2(b) # 82-4427 

Shares Outstanding 78,404,448 

Fully Diluted 86,983,698 

Market Capitalization C $274 million (S/O @ $3.50) 

Recent Price Range C $3.00 - $3.80 

52 Week High / Low C $4.24 - $0.30 

Cash Reserves 

C $20.0 million 

Insider Share Position 4.0 million shares (5.0%) 

Institutional holdings (25%) CPP, TDAM, Front St., Excalibur, NatCan, MFC 

Faircourt, Cantara, Seamans, Fuchs Global 

Balance Sheet Assets C $26.5 million (Aug. 31/09) 

TSX:AVL 


Five Year Price Chart 

Thor Lake 

Acquisition 

Recognition of 

Lake Zone HREE 

Scoping Study 

The Dines Letter 

Mkt. Meltdown 

$1.55 Financing 

TSX:AVL 


Key Value Drivers 

Thor Lake (Nechalacho) a globally strategic REE resource 

Very large size, geologically-unique deposit 

Exceptional enrichment in scarce HREE and could become the 

dominant global supply source 

Located in a politically-stable jurisdiction 

Potentially highly profitable 

Ore value >2x operating costs just for REE 

Potential by-product credits (gallium, tantalum, niobium, zirconium) 

Relatively small initial capital requirements 

Interest from customers as potential strategic partners 

Growing recognition in the marketplace of importance of REE 

Coverage from industry analysts & media commentators 

TSX:AVL 


Management, Directors 

& Strategic Advisors 

Management 

Donald S. Bubar, P.Geo, 

President, CEO & Director 

Jim Andersen, C.A., C.P.A., 

V.P. Finance & CFO 

Bill Mercer, Ph.D., P.Geo., 

V.P. Exploration 

Ian M. London, P. Eng., MBA., 

V.P. Market Development 

David Swisher, B.Sc., 

V.P. Operations 

Cindy Hu, CA, CPA, CGA, Controller 

Virginia Morgan, B.Com, 

Manager, Investor Relations 

Directors 

Alan Ferry, CFA 

Non-Executive Chairman 

Brian D. MacEachen, C.A. 

Audit Committee Chair 

Joseph Monteith 

Peter McCarter, B.A., LL.B., M.B.A. 

Phil Fontaine, B.A., LL.D. 

Strategic Advisors 

F. Dale Corman, P.Eng. 

Gerald Prosalendis, Communications 

David Connelly, Community Relations 

TSX:AVL 


Good Practice = Good Business 

Reducing the risk of delays in receiving operating 

permits by: 

Operating in an environmentally and socially responsible manner 

Implementing a proactive community engagement philosophy to 

secure local community support for project development 

Leveraging the role of REE in new technology related to the 

Green Energy Economy to attract a broader range of investors 

TSX:AVL 


Corporate Information 

Avalon Rare Metals Inc. 

130 Adelaide St. W, Suite 1902 

Toronto, ON Canada M5H 3P5 

T: (416) 364-4938 ۰ F: (416) 364-5162 

www.avalonraremetals.com 

www.raremetalblog.com 

office@avalonraremetals.com 

Investor Relations: 

Pro-Edge Consultants, Toronto 

tracy@avalonraremetals.com 

TSX:AVL

Corporate Presentation - Avalon Rare Metals

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