Nechalacho REE

The Nechalacho Rare Earth Elements Property, located at Thor Lake, Northwest Territories, is a rich polymetallic rare metals resource, with potential for economic recovery of the heavy rare earth elements (REE), neodymium, praseodymium, lithium, zirconium, beryllium, niobium and tantalum.  Avalon initially focused on the heavy REE-rich Basal Zone deposit (2008-2013), which was the subject of the company's positive 2013 Feasibility Study

Presence of high grade, near surface neodymium-praseodymium (Nd-Pr) and dysprosium resources in the T-Zone and Tardiff Zones of the property provide the potential for near term, small scale development to produce Nd-Pr-rich concentrates for export. In January 2019, Avalon and Cheetah Resources Pty Ltd. announced the signing of a binding terms sheet under which Cheetah would acquire ownership of the T-Zone and Tardiff Zone resources for C$5 million, with the definitive agreement completed in June.   

Avalon retains its ownership of the mineral resources below a depth of 150 metres above sea level (including the Basal Zone deposit) and will continue to have access to the property for exploration, development and mining purposes. Avalon will also continue to manage Nechalacho work programs and retain its 3% NSR type royalty.

Strategic Advantages

Geology

  • Large Basal Zone deposit enriched in the heavy rare earths
  • Near-surface mineralization of neodymium and praseodymium (T-Zone, Lake Zones)
  • Very low uranium and thorium levels
  • Lithium potential through the mineral lepidolite

Accessibility

  • Thor Lake has good access through its proximity to Great Slave Lake, providing access by barge in the summer and ice roads in the winter
  • Located just 100 km southeast of Yellowknife
  • Hay River is a closeby port with existing barging terminal and railhead accessible year round by an all-season highway
  • A proposed expansion of hydro power generation and transmission capacity potentially offers Nechalacho a low-cost alternative to diesel-generated power at site

Sustainability

  • Basal Zone extraction and processing facilities have been designed to significantly minimize impacts to water, land and air and reduce the project’s carbon footprint
  • T-Zone and Lake Zones provide the potential for small scale, staged development to produce Nd-Pr-rich concentrates for export
  • Proactive community outreach initiatives including progressive Indigenous agreements
  • Focus on strong health and safety performance reduces potential for delays and extra costs from lost time injuries

Reduced Risk

  • Politically stable jurisdiction
  • Polymetallic rare metals resource with potential for multiple projects, revenue streams and by-products

Location

The Nechalacho property is located at Thor Lake in the Mackenzie Mining District of the Northwest Territories, approximately 100 km southeast of the city of Yellowknife. The property is comprised of five contiguous mining leases totalling 10,449 ac (4,249 ha) and three mineral claims totalling 4,597 ac (1,860 ha).

Thor Lake Area and Regional Infrastructure
Thor Lake’s Regional Infrastructure

Property Timeline

  • 2005-07: Avalon acquired the property and completed an initial compilation on the North-T deposit, which included recognition of a small, high grade, neodymium resource in the F-Subzone, averaging 6.5% Total Rare Earth Oxides including 1.5% Nd2O3.
     
  • June 2012: Signing of Accommodation Agreement with the Deninu K’ue First Nation
     
  • 2008-13: Discovery and definition of the Basal Zone heavy REE resource led to preparation of a positive Feasibility Study contemplating large scale production of a mixed rare earth precipitate and enriched zirconium concentrate, containing by-products tantalum and niobium
     
  • November 2013: Approval of Environmental Assessment by the Federal Government
     
  • February 2014: Signing of Participation Agreement with the Northwest Territory Métis Nation
     
  • March 2014: Strategic partnership / refining agreement with Solvay for refining of rare earths (mutually terminated in February 2016)
     
  • April 2014: Receipt of Land Use Permit for pre-construction work
     
  • May 2014: Receipt of Water Use License for pre-construction work

    [Project put on hold following dramatic decline in REE prices]
     
  • 2018: Due to rising prices for Nd-Pr, Avalon completing a field program to begin assessing the near term, small scale development potential of the T-Zone and Tardiff Zones as a source of Nd-Pr rich bastnaesite concentrates. Sampling was also done in the T-Zone to begin assessing its lithium potential due to widespread occurrence of the lithium mica polylithionite.
     
  • 2018/2019: Following the receipt of the new Exploration Type B Land Use Permit in June 2018, Avalon also received approval for the extension of its existing Land Use Permit and Water License for the first year of site preparation and preliminary low impact construction activities in 2019.
     
  • 2019: Avalon and Cheetah Resources Pty Ltd. announced the signing of a binding terms sheet under which Cheetah would acquire ownership of the T-Zone and Tardiff Zone resources for C$5 million, with Avalon continuing to manage Nechalacho work programs and retaining its 3% NSR type royalty. Avalon retains ownership of the mineral resources below a depth of 150 metres above sea level (including the Basal Zone deposit that was the focus of Avalon's positive 2013 Feasibility Study) and will continue to have access to the property for exploration, development and mining purposes. The definitive agreement was completed in June. 

Compilation work continues toward preparing a scope of work and budget for a 2019 work program on the T-Zone and Tardiff Zones. This includes preparing a new block model from historical data for the T-Zone resources and initial test work on the application of ore-sorting technology on the North T Nd-Pr-rich bastnaesite mineralization.

Further Information

Nechalacho Project fact sheet