Avalon’s Nechalacho Rare Earths Project to Remain Inactive in 2016, While the Company Focuses on Lithium and Tin
February 10 2016 - 4:05PM
Avalon Rare Metals Inc. (TSX:AVL) (OTCQX:AVLNF) (“Avalon” or the
“Company”) provides the following update on activities on the
Nechalacho Rare Earth Elements Project (“Nechalacho Project”), Thor
Lake, NWT. Project work in calendar 2015 consisted mainly of
concluding the ongoing metallurgical research, disposal of process
waste materials and storage of bulk samples for future use.
Rare Earths MarketsMarkets for
rare earth elements remain quiet with prices falling some 30-50% in
2015 despite a 7% increase in overall demand. Overall supply is
estimated by IMCOA to have increased some 9% due mainly to
increased illegal production in China. This market downturn has
resulted in the bankruptcy of at least two potential new producers
outside China and a dramatic decline in investor interest, which
has significantly reduced the amount of capital available for new
rare earths development projects like Nechalacho. Consequently,
expenditures on Avalon’s Nechalacho Project will remain minimal in
2016 as the Company re-focuses its efforts on the Separation Rapids
Lithium Project and East Kemptville Tin-Indium Project.
Status of Toll-refining
AgreementWith the Nechalacho Project now inactive and the
Company’s priorities focused elsewhere, Avalon and Solvay have
agreed to mutually terminate the tolling agreement first announced
on March 3, 2014 to process and refine Avalon’s mixed rare earth
concentrate. This will save Avalon money and free up capacity for
Solvay at its La Rochelle refinery, should other toll refining
opportunities emerge before work at Nechalacho resumes. Avalon and
Solvay have agreed to consider entering into a new agreement,
should increased demand for rare earths create a new opportunity to
advance the Project. Avalon has benefited from its cooperation with
Solvay and looks forward to renewing this cooperation when the
market for rare earths recovers.
Potential for Production of Zirconium
Chemicals The Nechalacho deposit contains significant
quantities of the zirconium mineral zircon, which the Company had
planned to recover and process for its contained heavy rare earths.
Recent metallurgical investigations have developed processes for
recovering valuable zirconium chemicals from this mineral either as
high quality zirconium basic sulphate (ZBS) or zirconium
oxychloride (ZOC). These chemicals have numerous applications
including paper coatings, anti-perspirants, paint dryers and fire
proofing. Zirconium metal and metal alloys provide excellent
corrosion resistance, particularly at high temperatures and have
found many applications in nuclear reactors, military vessels and
commercial power generation. Currently China is the primary source
of all zirconium consumed in North America but the Nechalacho
Project could satisfy the bulk of this demand once brought into
production.
Avalon is planning to evaluate the economics of
producing zirconium chemicals from the Nechalacho deposit as a
primary product when funding becomes available.
Status of Nechalacho Project
Permitting Avalon is considering completing the permitting
process under the Mackenzie Valley Resource Management Act, which
was initiated in 2012 and has been advancing slowly since then. The
Company is presently assessing the costs that will be associated
with completing this process which it estimates could potentially
be completed in nine months. The Company is also in discussions
with senior officials of the newly elected Government of the
Northwest Territories regarding the potential for implementation of
significant improvements to the efficiency of the permitting
process, that are presently being advocated by industry
associations such as the NWT and Nunavut Chamber of Mines. Such
improvements could significantly reduce the current high level of
uncertainty around costs and timelines to complete the permitting
process in the NWT.
About Avalon Rare Metals Inc.
Avalon Rare Metals Inc. is a Canadian mineral development
company specializing in niche market metals and minerals with
growing demand in new technology. The Company has three advanced
stage projects, all 100%-owned, providing investors with exposure
to lithium, tin and indium, as well as rare earth elements,
tantalum, niobium, and zirconium. Avalon is currently focusing on
its Separation Rapids Lithium Project, Kenora, ON and its East
Kemptville Tin-Indium Project, Yarmouth, NS. Social responsibility
and environmental stewardship are corporate cornerstones.
This news release contains “forward-looking
statements” within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities legislation. Forward-looking statements include, but are
not limited to, statements that expenditures on Avalon’s Nechalacho
Project will remain minimal in 2016 as the Company re-focuses its
efforts on the Separation Rapids Lithium Project and East
Kemptville Tin-Indium Project, that Avalon and Solvay have agreed
to consider entering into a new agreement, that looks forward to
renewing this cooperation when the market for rare earths recovers,
that Nechalacho project could satisfy the bulk of zirconium demand
once brought into production, that Avalon is planning to evaluate
the economics of producing zirconium chemicals from the Nechalacho
deposit as a primary product when funding becomes available, that
Avalon is considering completing the permitting process under the
Mackenzie Valley Resource Management Act, and that
improvements could significantly reduce the current high
level of uncertainty around costs and timelines to complete the
permitting process. Generally, these forward-looking statements can
be identified by the use of forward-looking terminology such as
“potential”, “scheduled”, “anticipates”, “continues”, “expects” or
“does not expect”, “is expected”, “scheduled”, “targeted”,
“planned”, or “believes”, or variations of such words and phrases
or state that certain actions, events or results “may”, “could”,
“would”, “might” or “will be” or “will not be” taken, reached or
result, “will occur” or “be achieved”. Forward-looking statements
are subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity,
performance or achievements of Avalon to be materially different
from those expressed or implied by such forward-looking statements.
Forward-looking statements are based on assumptions management
believes to be reasonable at the time such statements are made.
Although Avalon has attempted to identify important factors that
could cause actual results to differ materially from those
contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended.
Factors that may cause actual results to differ materially from
expected results described in forward-looking statements include,
but are not limited to market conditions, and the possibility of
cost overruns or unanticipated costs and expenses as well as those
risk factors set out in the Company’s current Annual Information
Form, Management’s Discussion and Analysis and other disclosure
documents available under the Company’s profile at www.SEDAR.com.
There can be no assurance that such statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Such
forward-looking statements have been provided for the purpose of
assisting investors in understanding the Company’s plans and
objectives and may not be appropriate for other purposes.
Accordingly, readers should not place undue reliance on
forward-looking statements. Avalon does not undertake to update any
forward-looking statements that are contained herein, except in
accordance with applicable securities laws.
For questions and feedback, please e-mail the Company at ir@avalonraremetals.com, or phone Don Bubar, President & CEO at 416-364-4938.
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