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Avalon Rare Metals Inc. (TSX:AVL)(OTCQX:AVARF) ("Avalon" or the "Company") is pleased to announce an updated Indicated Mineral Resource estimate based on assay results of 44 definition holes (9,101 metres) drilled during the 2009 summer drilling program. The grades and widths encountered confirm good continuity for the rare earth elements ("REE") mineralization in the Basal Zone of the Nechalacho deposit.
- Indicated Resources in the Nechalacho Basal Zone increased by 102% to 9.00 million tonnes grading 1.86% TREO(1) with 23.1% HREO/TREO(2) at the 1.60% TREO cut-off.
- Geological modelling leads to better understanding of controls on the distribution of the high grade heavy rare earth mineralization in the Basal Zone, and new drill targets.
- Winter drilling program to commence around January 17, 2010.
- Preparation of prefeasibility study proceeding on schedule.
The main objective of the 2009 summer drill program was to confirm continuity between earlier widely-spaced drill holes to allow more of the Inferred Resources in the Basal Zone of the Nechalacho deposit to be classified as Indicated. These Indicated Mineral Resources are the basis for the development model being prepared for the Prefeasibility Study ("PFS"). This objective was achieved and the revised Inferred and Indicated Mineral Resources are summarized in Table 1 below. The Indicated Mineral Resources within one continuous block in the southern part of the Basal Zone deposit are now estimated to total 9.00 million tonnes at 1.86% TREO(1), 0.43% HREO and 23.1% HREO/TREO(2) (heavy rare earth oxides) at the 1.60% TREO (total rare earth oxides) cut-off grade. This is double the tonnage of Indicated Mineral Resources totalling 4.4 million tonnes grading 1.97% TREO (25.4% HREO) defined in the southern part of the deposit and disclosed in August 2009. This does not include the 2.2 million tonnes Indicated Resource defined earlier in the central part of the deposit, which may not form part of the development model to be used in the PFS. Inferred Resources in the Basal Zone have decreased by an amount closely corresponding to the newly re-classified Indicated Resources. This provides considerable confidence that with further in-fill drilling, additional Inferred Resources will ultimately be re-classified as Indicated Resources.
(1) Total Rare Earth Oxides (TREO) refers to the elements lanthanum to lutetium, plus yttrium, expressed as oxides. See Avalon's website for conversion factors from elements to oxides. Heavy Rare Earth Oxides (HREO) refers to the elements europium to lutetium, plus yttrium, expressed as oxides as a percentage of the TREO. Light rare earths (LREO) refers to the elements lanthanum to samarium, expressed as oxides.
This updated resource was prepared by Hudgtec Consulting Limited (Bruce Hudgins, P. Geo.) of Dartmouth, N.S. The methodology employed by Hudgtec was the same as that used in the previous update and at that time was reviewed by external consultants Scott Wilson Roscoe Postle Associates ("Scott Wilson RPA").
Forty-two of the holes were designed to intersect the heavy rare earth rich Basal Zone on 50 metre centres, to confirm internal continuity and outline additional indicated resources in the southern part of the deposit. This drilling is overlapping with and adjacent to the previously announced Indicated Mineral Resources of 4.4 million tonnes averaging 1.97% TREO and 0.5% HREO, with 25.4% HREO/TREO (17 August 2009, Release #09-13), located largely under Long Lake. Two drill holes, L09-205 and L09-206, were step-outs designed to test the extension of known mineralization to the southwest. The locations of the drill holes relevant to this news release are detailed in Table 2 below and the composites calculated from the assay results detailed in Table 3. A location map for these holes is accessible at http://www.avalonraremetals.com/projects/thor_lake/thor_lake_intro/ (entitled "Diamond Drill Location Plan October 2009").
The results of the 2009 drilling and concurrent academic research work have also resulted in a better understanding of the genesis of the deposit. Nechalacho is now recognized as an unusual example of a large, layered peralkaline intrusive complex with an extensive zone of hydrothermal replacement that has apparently upgraded the primary layered magmatic REE mineralization. This significant refinement of the geological model explains the distribution of thicker, higher grade TREO and higher heavy rare earth portions of the Basal Zone and predicts potential for extensions to the south, where the deposit is wide open for expansion beneath barren cover rocks.
The results of drill holes L09-205 and L09-206 support this model by confirming that the Basal Zone extends further southwest and to greater depths that previously intercepted. In particular, L09-206, with an intercept between 249 and 263.2 metres below surface of 14.2 metres grading 1.90% TREO and 30% HREO/TREO is a very encouraging result, and follow-up is planned for this area in the Winter 2010 program.
(2) 23.1% HREO/TREO refers to the proportion of heavy rare earth oxides as a percentage of the total rare earth oxide content of the rock.
Thirty-eight of the drill holes in this release intercepted a Basal Zone above the 1.6% TREO cut-off grade with the top of the zone between 97 and 191 metres below surface. The thickness of the zone ranges from 4 to 50.8 metres thick and averages just over 30 metres over the area covered by the holes reported here. The intercept lengths in the table are drilled lengths and are very close to true widths for vertical drill holes. Angle holes were all oriented between -70 and -76 degrees to the vertical, which would suggest that the true width is generally from 0 – 10% less than the drilled width as the Basal Zone usually has a shallow dip.
Assay highlights from drilling within the Basal Zone include 2.05% TREO with 22.0% HREO over 46.2 metres in drill hole L09-164, 1.97% TREO with 21.4% HREO over 37.2 metres in drill hole L09-178 and 3.06% TREO with 18.3% HREO over 18.5 metres in drill hole L09-178. Drill holes L09-190 and L09-191 had exceptional widths and grades, as the Upper Zones and Basal Zones merged into virtually continuous mineralization. Drill hole L09-190 intersected 131.55 metres of 1.30% TREO with 20% HREO and L09-191 intersected 111 metres of 1.49% TREO with 15% HREO.
The detailed breakdown of assays for each of the individual rare earth oxides included in the composites, along with assay data for other associated rare metals are provided in a table posted on the Company's website. Examples include(3) (for the above mentioned interval in drill hole L09-164) (kilograms/tonnes): 3.66 kg/t Nd2O3, 0.10 kg/t Eu2O3, 0.10 kg/t Tb2O3 and 0.53 kg/t Dy2O3. The 46.5 metres interval also included 3.82% ZrO2 and 0.48% Nb2O5. The respective values for the 37.2 metres interval in L09-178 are similar with 3.59 kg/t Nd2O3, 0.10 kg/t Eu2O3, 0.10 kg/t Tb2O3 and 0.51 kg/t Dy2O3 while other rare metals included 3.72% ZrO2 and 0.47% Nb2O5.
Intervals of higher HREO within the Basal Zone include L09-163 with 10 metres between 147 – 157 metres containing 4.8 kg/t Nd2O3, 1.0 kg/t Dy2O3, 0.17 kg/t Tb2O3 and 0.15 kg/t Eu2O3. Similarly drill hole L09-176 over 5.75 metres between 181 to 186.75 metres assayed 4.4 kg/t Nd2O3, 1.0 kg/t Dy2O3, 0.19 kg/t Tb2O3 and 0.14 kg/t Eu2O3.
Avalon's focus is on the Basal Zone of the Nechalacho deposit due to its strong enrichment in the more valuable heavy rare earth elements as a proportion of the total rare earth elements present. However, drill holes frequently intersect between one and three individual zones of neodymium rich REE mineralization in the Upper part of the Nechalacho deposit that, despite having proportionally lower heavy rare earth contents than the Basal Zone, may still be of economic importance. In particular, within a local zone starting within 7 metres of surface, holes L09-178, L09-179 and L09-180 assayed a total of 2.89% TREO over 20.06 metres, 2.75% TREO over 17 metres and 2.56% TREO over 23 metres respectively. Within these upper zone intervals, these drill holes gave Nd2O3 assays of 7.0 kg/t over 10 metres, 7.1 kg/t over 10 metres and 8.2 kg/t over 7.5 metres respectively. Neodymium is the principal rare earth element used in high strength permanent magnets with the heavy rare earths dysprosium and terbium sometimes added to the magnet to enhance its thermal properties.
Recent prices for rare earth oxides, fob China, given by Metal Pages include US$19.00 to $19.50/kg for Nd2O3, US$470 to $490 for Eu2O3, US$340 to $260 for Tb2O3 and US$107 to $112 for Dy2O3.
(3) Nd2O3 equals Neodymium Oxide, Eu2O3 equals Europium Oxide, Tb2O3 equals Terbium Oxide, Dy2O3 equals Dysprosium Oxide, ZrO2 equals Zirconium Oxide, Nb2O5 equals Niobium Oxide
The winter drilling is planned to commence on about January 17, 2010 with one drill, and a second drill to be added around February 1, 2010. The first drill will focus on (1) areas adjacent to the main indicated mineral resource that were not accessible in summer due to wet ground and (2) drilling along Long Lake to extend the heavy rare earth rich mineralization indicated in hole L09-206.
The second drill will initially test exploration targets, including the extension of the known zone immediately south of Long Lake, and then combine condemnation drilling of proposed plant site, airstrip and tailings site. This drill is expected to be mobilized within the next two weeks.
Preparation of the PFS incorporating the new resource model, by Scott Wilson RPA under the direction of David Swisher, Vice President, Operations, is proceeding on schedule for completion in Spring 2010. Metallurgical process testwork is ongoing.