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Rare Earths Power Breakfast March 7, 2011. Don Bubar, President & CEO . Safe Harbour Statement. Forward looking information

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rare earths power breakfast march 7 2011

Rare Earths Power BreakfastMarch 7, 2011

Don Bubar, President & CEO

safe harbour statement
Safe Harbour Statement

Forward looking information

Certain statements contained in or incorporated by reference into this presentation constitute forward-looking statements. Such statements reflect the current views of Avalon Rare Metals Inc. with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of Avalon Rare Metals Inc. that may be expressed or implied by such forward-looking statements to vary from those described herein should one or more of these risks or uncertainties materialize. Avalon Rare Metals Inc. does not intend, and does not assume any obligation, to update these forward-looking statements.

project locations
Project Locations


Heavy Rare Earths








Light Rare Earths




Avalon offers diversified exposure to a broad range of rare metals

All projects 100% owned

nechalacho ree deposit at thor lake key facts
Nechalacho REE Deposit at Thor Lake: Key Facts
  • Positive pre-feasibility study completed in 2010. >C$30 million invested since 2005, incl. 59,000m of drilling in 266 holes
  • $40 million Bankable feasibility underway, funded, complete in 2012
  • Large resource amenable to low cost underground mining methods
  • Rich in heavy rare earths (20-28%), High grade subzones defined
  • Recovery process defined at bench scale. Pilot plant in progress
  • Product sales and marketing program initiated... Strategic partners
  • By-product revenues from zirconium, niobium and tantalum (40%)
  • Environmental assessment and permitting process in progress with First Nations support
  • Planning for N. American HREE separation plant
  • Production start-up in 2015
  • +C$1.0 billion estimated total capital cost
basal zone indicated resources at various nmr cut offs updated jan 27 2011
Basal Zone Indicated Resources atVarious NMR Cut-offsupdated Jan. 27, 2011
  • Prepared from 2009 data by Scott Wilson RPA detailed in Technical Report filed July 29, 2010 and updated for 2010 drilling by Finley Bakker, P. Geo., Sr. Resource Geologist
  • Mineral Resources are estimated using price forecasts for 2014 for rare earth oxides prepared early in 2010. Some prices are higher and some are lower than current prices.
  • NMR is defined as “Net Metal Return” or the gross in situ value of all the payable rare metals in the ore. $US FX rate: $1.11. The 2010 base case NMR is C$260/tonne.
  • Mineral Resources NMR price assumptions (2010): US$21.94/kg TREO, US$3.76/kg ZrO2, US$130/kg Ta2O5, and US$45/kg/Nb2O5 .

Rare Earth Element Supply Chain

Avalon’s contributions to the REE supply chain

Downstream contributions

planning for hree separation plant in north america
Planning for HREE Separation Plant in North America
  • No large scale heavy REE separation capability outside China at present. Customers want an outside China separation solution
  • Scoping Study by SNC Lavalin assuming S. Ontario location
  • CAPEX estimated at C$345 million (+/- 35%) for 25,000 tpa HREE separation plant
    • Sized to accommodate additional supply from other producers
  • Delivered cost of reagents accounts for 90% of OPEX
    • Locate plant near sources of HCL and caustic soda
  • Review of potential sites in progress
    • Consider partnership opportunities
schedule to production in 2015
Schedule to Production in 2015

Bankable Feasibility Study Budget

Sept. 1, 2010 to Aug 31. 2012= $40.5 million

Cost Estimate for Feasibility Study = $43 million

Total Estimated CapEx:

+C$1.0 billion

first nations community engagement csr

Community information sessions and site visits

Aboriginal Training

First Aid, Driller Helper

Employment at site

40% Aboriginal

Business development

Major contractors with Aboriginal ownership

Ice road haulage, airstrip Wind power evaluation

Helped start a new core box business with DeninuKue

Signed MOUs (Negotiation Agreement) with two FN’s

First Nations Community Engagement & CSR
the business case for embracing csr
The business case for embracing CSR
  • Reduced risk of permitting delays
    • Local community support
  • Better access to investment capital
    • CleanTech funds and SRI’s are increasingly

important sources of investment capital

  • Better access to markets for products
    • Socially responsible manufacturers are managing their supply chains to the source of raw materials to encourage sustainability and avoid sourcing from conflict areas (eg; tantalum from Congo)
    • Dodd Frank Bill will force US consumers to audit their supply chains to avoid use of conflict minerals
competitive advantages
Competitive Advantages

Relatively Advanced

5 years down a 10 year development timeline

Prefeasibility Study Completed

Allows company to enter into discussions with customers about off-take

Metallurgical Flowsheet Determined

No issues with contaminants and good recoveries confirmed (75%)

Significant By-product revenue indicated (Zr, Nb, Ta)

Heavy Rare Earth Enrichment Marketing Opportunity

No other advanced projects have all the heavies to offer

First Mover Advantage is Key

First to market will capture available market share

Only room for a handful of new producers “first come, first served”

some objectives for 2011
Some objectives for 2011
  • Update of Nechalacho PFS Economic Model by mid-year
  • Attracting a consumer or consumers as strategic partners and entering into off-take agreements
  • Advancing feasibility study work especially pilot plant work and planning for HREE separation plant
  • Concluding First Nations Participation Agreements
  • Expanding our investor audience internationally and in the Clean Tech community (CSR Road Map 2011)
  • Increased Research Analyst coverage
  • Advance East Kemptville and Separation Rapids projects and begin generating other new rare metals projects