Resources & Reserves

An internal resource update was published by the company on August 15, 2013, incorporating drill results from the eight-hole winter 2013 drill program and the final 41 holes from the 2012 summer drill program. These holes were not incorporated into the resource model used in Avalon’s April 2013 Feasibility Study.

The estimated Measured Mineral Resources in the base case now stand at 12.56 million tonnes averaging 1.71% TREO1, 0.38% HREO and 22.5% HREO/TREO2. This compares with the previous estimate of 10.88 million tonnes grading 1.67% TREO, 0.38% HREO and 22.9% HREO/TREO announced on November 26, 2012. The only change of consequence in methodology from the November 26, 2012 Resource estimate was that the base case cut-off grade, expressed as Net Metallurgical Return3 (“NMR”), increased from US$320 to US$345 per tonne due to minor changes in estimated operating costs.

1TREO (Total Rare Earth Oxides) is HREO plus: La2O3, CeO2, Pr6O11, Nd2O3 and Sm2O3. HREO (Heavy Rare Earth Oxides) is the total concentration of: Y2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3 and Lu2O3

2HREO/TREO is the percentage proportion of rare earths that are HREO

3NMR is defined as "Net Metal Return" or the in situ value of all payable metals, net of estimated metallurgical recoveries and off-site processing costs

Nechalacho Deposit Mineral Resources at US$345/tonne NMR Cut-Off

Category
Zone
Tonnes
TREO
HREO
HREO/ TREO
ZrO2
Nb2O5
Ta2O5
(millions)
(%)
(%)
(%)
(%)
(%)
(%)
Measured
Basal
12.56
1.71
0.38
22.50
3.20
0.405
0.0404
Upper
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Total Measured
12.56
1.71
0.38
22.50
3.20
0.405
0.0404
Indicated
Basal
49.33
1.62
0.35
21.27
3.07
0.405
0.0398
Upper
47.21
1.52
0.15
10.11
2.12
0.291
0.0195
Total Indicated
96.54
1.57
0.25
16.00
2.61
0.349
0.0299
Measured and Indicated
Basal
61.90
1.64
0.35
21.53
3.10
0.405
0.0399
Upper
47.21
1.52
0.15
10.11
2.12
0.291
0.0195
Total Measured and Indicated
109.11
1.59
0.27
16.81
2.67
0.356
0.0311
 
Inferred
Basal
58.16
1.38
0.26
18.89
2.80
0.380
0.0351
Upper
102.09
1.38
0.13
9.70
2.38
0.334
0.0204
Total Inferred
160.25
1.38
0.18
13.07
2.53
0.351
0.0257

NOTES:

  1. CIM definitions were followed for Mineral Resources.
  2. The Qualified Person for this Mineral Resource estimate is William Mercer, PhD, P.Geo. (Ontario), P. Geo. (NWT), VP, Exploration, Avalon Advanced Materials Inc.
  3. HREO (Heavy Rare Earth Oxides) is the total concentration of: Y2O3, Eu2O3, Gd2O3, Tb4O7, DY2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3 and Lu2O3.
  4. TREO (Total Rare Earth Oxides) is HREO plus: La2O3, CeO2, Pr6O11, Nd2O3 and Sm2O3.
  5. Rare earths were valued at an average net price of US$62.91/kg, ZrO2 at US$3.77/kg, Nb2O5 at US$56/kg, and Ta2O5 at US$256/kg. Average REO price is net of metallurgical recovery and payable assumptions for contained rare earths, and will vary according to the proportions of individual rare earth elements present. In this case, the proportions of REO as final products were used to calculate the average price.
  6. The changes in methodology from the November 26, 2012 Resource were the cut-off grade and the interpolation method. The cut-off grade, expressed as Net Metallurgical Return (“NMR”), increased from US$320 to US$345 per tonne. NMR is defined as "Net Metal Return" or the in situ value of all payable metals, net of estimated metallurgical recoveries, and in the case of Nb, Ta and Zr, off-site processing costs. The revised interpolation method utilized the elevation above the lower contact of the Basal Zone to provide better geologic continuity of the ore zone. The effect on overall tonnage and grade is not material.
  7. ZrO2 refers to Zirconium Oxide, Nb2O5 refers to Niobium Oxide, Ta2O5 refers to Tantalum Oxide
  8. See August 15, 2013 news release for individual rare earth oxide details
  9. See August 15, 2013 news release for Basal Zone tonnes and TREO grades at higher NMR cut-off values
  10. Values for HREO/TREO may differ due to rounding

The mineral resource estimate was prepared by Benjamin Webb, Senior Resource Geologist, Avalon, under the supervision of the company's Vice-President, Exploration, William Mercer Ph.D., P. Geo. (Ont), P. Geo. (NWT), who is the QP for Avalon for the information contained in the August 15, 2013 news release. Drilling operations were performed by a third party drilling company under the supervision of a consulting Professional Geologist. Dr. Mercer is also providing overall direction on the project and monitoring of the QA/QC on the laboratory analyses. (See the RPA Technical Report dated August 25, 2011 for QA/QC procedures).