INDUSTRY BULLETIN: Avalon Comments on House of Commons Committee on Natural Resources Report on Rare Earths

June 27, 2014

On June 19, 2014, the House of Commons Standing Committee on Natural Resources (“the Committee”) released a document titled The Rare Earth Elements Industry in Canada – Summary of Evidence (found at http://www.parl.gc.ca/Content/HOC/Committee/412/RNNR/WebDoc/WD6669744/412_RNNR_reldoc_PDF/RareEarthElements-Summary-e.pdf).This summary was the outcome of a motion passed by the Committee to study the “rare earths industry in Canada, given its economic potential and strategic relevance”.

Hearings were held during late 2013 and early 2014. Avalon Rare Metals’ Pierre Neatby, Vice-President, Sales & Marketing, appeared before the Committee in February 2014, where he noted there is a race to supply rare earths to the supply chain on a global scale and that “Canada’s opportunity is now”. Mr. Neatby echoed the view shared by a cross section of industry players that the Canadian government should publicly support the development of this important emerging sector to become a serious global player in the industry. A panel with members from the Canadian Rare Earth Element Network (“CREEN”), of which Avalon is a founding member and active participant, also appeared before the Committee.

In addition to describing some of the basics of the rare earth element industry including applications, global supply and demand and the role of China, the document discusses the potential economic and strategic opportunity for Canada and the key challenges facing rare earth development projects in Canada. It also speaks to current initiatives that support Canada’s REE industry, including CREEN, in its concluding section titled “The Role of the Federal Government in Advancing Canada’s Rare Earth Industry.”

Avalon is encouraged to see the Canadian government’s growing interest in the sector; however, as noted in the document, “Canada’s public investment in REE research and development is relatively small”. Avalon continues to work with Natural Resources Canada (“NRCan”) and CREEN to promote increased Canadian government support for the industry.

CREEN’s first Technical Workshop in Ottawa on June 17, 2014 was attended by Avalon’s Senior Vice-President, Metallurgy, Dave Marsh, and Senior Metallurgist, Henrietta Notzl. The workshop was co-sponsored by NRCan, Canadian Mineral Processors and the Metallurgy and Materials Society, and engaged rare earth process technology leaders from industry and academia. The main outcome was identifying and prioritizing pre-competitive research and development projects and targeted solutions expected to bring Canadian production into service by 2018. CREEN is in the process of fleshing out the proposed project lists, securing collaborative project sponsors and R&D funding. CREEN is also working on partnering with other national and international organizations to leverage existing research initiatives and funding opportunities.

If you have any comments or questions on this Industry Bulletin, please do not hesitate to contact Avalon directly at ir@avalonraremetals.com.  Follow us on Twitter at http://twitter.com/avalonraremetal, join our FaceBook page at http://www.facebook.com/pages/Avalon-Rare-Metals-Inc/224623996080?ref=ts or subscribe to our YouTube video feeds at http://www.youtube.com/user/AvalonRareMetals.

Avalon Rare Metals Inc. (TSX & NYSE MKT: AVL) is a mineral development company focused on rare metal deposits in Canada. Its 100%-owned Nechalacho Deposit, Thor Lake, NWT is exceptional in its large size and enrichment in the scarce 'heavy' rare earth elements, key to enabling advances in clean technology and other growing high-tech applications. With a positive feasibility study and environmental assessment completed, the Nechalacho Project remains the most advanced potential large new source of heavy rare earths in the world outside of China, currently the source of most of the world's supply. Avalon is adequately funded, has no debt and its work programs are progressing. Social responsibility and environmental stewardship are company cornerstones.