ZIRCONIUM & RARE EARTHS
Located at Thor Lake, Northwest Territories, Nechalacho is a substantial deposit of high-grade zirconium and rare-earth minerals (neodymium, europium, terbium, dysprosium and yttrium) vital to products used in several sensitive sectors, including nuclear, defense and communications services.
The deposit is amongst the largest rare-earth critical minerals findings of its kind in North America, and represents a geo-strategically stable supply of core materials found in advanced technological industries, many of which have national and global security implications.
With the potential to generate significant value for shareholders and other stakeholders, including Indigenous and community partners, the full development of Nechalacho, including mining and processing capacity construction, is a medium- to longer-term strategic priority.
A 2013 definitive feasibility study confirmed the scope of the project is technically and economically viable for commercialization, with the deposit’s pre-tax net present value calculated to be approximately $1.35-billion. Based on the study, the total measured and indicated mineral resources are likely sufficient to support ongoing operations for many decades beyond the assumed 20-year mine life.
Nechalacho Fortress, North America
DETAILS
The Nechalacho property is comprised of eight contiguous mining leases totalling 14,229 acres (5,786 hectares). Avalon’s 2013 feasibility study revealed the following proven and probable resource tonnage:
The next development catalyst for the project is the completion of an updated, definitive feasibility study to commence in either 2024 or 2025, with a target date of site extraction activity to commence by the end of the current decade.
The Nechalacho property is comprised of eight contiguous mining leases totalling 14,229 acres (5,786 hectares). Avalon’s 2013 feasibility study revealed the following proven and probable resource tonnage.
The next development catalyst for the project is the completion of an updated, definitive feasibility study to commence in either 2024 or 2025, with a target date of site extraction activity to commence by the end of the current decade.
Cheetah Resources Deal
In June 2019, Avalon and Cheetah Resources Pty Ltd. signed a purchase and sale agreement under which Cheetah acquired ownership of the near-surface T-Zone and Tardiff Zone resources for C$5 million.
Avalon retains its ownership of the mineral resources below a depth of 150 metres above sea level (including the Basal Zone deposit), with full access to the property for exploration, development and mining purposes.
Notes:
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CIM definitions were followed for Mineral Reserves.
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Mineral Reserves are based on Mineral Resources published by Avalon in News Release dated November 26th, 2012 and audited by Roscoe Postle Associates Inc., and modified as of 3 May, 2013.
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Mineral Reserves are estimated using price forecasts for 2016 for rare earth oxides given below.
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HREO grade comprises Y2O3, Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, and Lu2O3. TREO grade comprises all HREO and La2O3, Ce2O3, Nd2O3, Pr2O3, and Sm2O3.
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Mineral Reserves are estimated using a NMR cash cost cut-off value of US$320/t.
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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.
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Mineral reserves calculation includes an average internal dilution of 8.5% and external dilution of 5% on secondary stopes.
