Avalon Rare Metals completes drilling at Nechalacho and reports encouraging metallurgical testwork at East Kemptville

Avalon Rare Metals (TSX: AVL, OTCQZ: AVARF) reported progress on a number of fronts today across its rare earth element (‘REE’) projects in Canada.

Avalon’s primary asset is the 100%-owned Nechalacho Deposit at Thor Lake in the Northwest Territory where the company has already defined an indicated mineral resource of 4.4 million tonnes of 1.97% total rare earth oxides (TREO) and 25.4% of heavy rare earths (HREO). 

TREO is the sum of all rare earth elements from lanthanum to lutetium plus yttrium, while HREO refers to the ratio of heavy rare earths (europium through to lutetium, plus yttrium, expressed as oxides) to TREO.

During the summer drilling campaign, which was completed on 14 October 2009, Avalon drilled 44 holes (9,098 meters) into the southern part of the Nechalacho Deposit.  The area targeted by Avalon overlapped with and was immediately north of the current indicated resource. The drilling was designed to both confirm the continuity and outline additional indicated resources in the heavy rare earth rich Basal Zone. Drilling was conducted on 50 metre centres.

“Analytical results from the summer drilling are slowly being received, and will be disclosed once a sufficient number are compiled to allow for a meaningful update of the inventory of indicated resources in the Basal Zone,” Avalon commented.  “An interim update should be available by early December and a complete update by early January, 2010.”

Drilling at Nechalacho will kick in again in January 2010 to complete further infill drilling, define additional indicated mineral resources and to complete condemnation and geotechnical drilling for engineering studies which are part of a larger prefeasibility study which is underway. Some exploration drilling will also be carried to test for potential extensions of the Basal Zone to the south of Long Lake, where Avalon has reported some of the best grades to date.

While drilling has now paused for the next two months, other studies for the ongoing prefeasibility study continue.   Avalon said that work on a number of studies, including mine design parameters, process criteria for the concentrator, hydrometallurgical testwork and process flowsheets are continuing.

During the summer, Avalon also collected over four tonnes of material from the Basal Zone, which will be put through a small flotation plant in early 2010 to provide data on the scope of the bulk sample that will be required for the more definitive bankable feasibility study.

Avalon also reported that it was continuing dialogue with local aboriginal groups, and that a draft Memorandum of Understanding (MOU) had been prepared covering a range of subjects, including revenue sharing models, environmental protection, and employment and training initiatives that would form the basis for an Impacts & Benefits (IBA) type agreement.  Avalon noted that it had already taken a “proactive approach” to hiring a training local aboriginal people, with around 40% of the current workforce at Thor Lake coming from the local communities.

Avalon is no one trick pony either, and also updated investors on activities at the East Kemptville Tin-Indium-Copper-Zinc Project in Nova Scotia where the company is in the midst of a Preliminary Economic Assessment (‘PEA’).

Of particular note today, the company reported preliminary metallurgical testwork on drill core samples provided by the Nova Scotia Government’s core library.   Testwork revealed that by using flotation to remove sulphides prior to gravity separation with Falcon ™ concentrators, the projected tin recovery rate was 88% into combined gravity and sulphide floatation concentrates.  This compared favourably to historical recovery rates of 40-75%.

Meanwhile, the indium reported to the zinc-copper bulk concentrate where indium recoveries of 85% were achieved using a conventional floatation process.  “Further flotation tests to individual copper and zinc concentrates are necessary to establish recoveries to copper and zinc concentrates but it is presently projected that 85% recoveries should be achievable,” Avalon reported. “Significantly improved tin recoveries coupled with relatively strong recent tin prices and potential for additional revenue streams from indium, zinc and copper is expected to favourably impact on the economic analysis to be prepared for the PEA.”

Avalon expects the PEA to be completed in the first quarter of 2010. While work on the PEA continues, Avalon also confirmed a C$0.5 million exploration program to test additional tin-indium targets on the property directly south-west of East Kemptville has commenced.