Avalon Rare Metals Inc.


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Mr. Don Bubar, President & CEO of Avalone Rare Metals Inc. provides corporate overview at the Critical Metals Invesment Symposium, Jan. 22, 2011 in Vancouver, Canada.

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Avalon Rare Metals Inc.

  1. 1. Critical Metals Symposium Vancouver January 22, 2011 Don Bubar, President & CEO
  2. 2. Safe Harbour StatementForward looking informationCertain statements contained in or incorporated by reference into thispresentation constitute forward-looking statements. Such statementsreflect the current views of Avalon Rare Metals Inc. with respect to futureevents and are subject to certain risks, uncertainties and assumptions.Many factors could cause the actual results, performance or achievementsof Avalon Rare Metals Inc. that may be expressed or implied by suchforward-looking statements to vary from those described herein shouldone or more of these risks or uncertainties materialize. Avalon Rare MetalsInc. does not intend, and does not assume any obligation, to update theseforward-looking statements. 2
  3. 3. Project Locations NECHALACHO Heavy Rare Earths Tantalum Niobium Zirconium Hafnium Gallium NORTH T DEPOSIT Beryllium Light Rare Earths LithiumAvalon offers Gallium Niobiumdiversifiedexposure to abroad rangeof rare metals All projects 100% owned 3
  4. 4. Nechalacho REE Deposit atThor Lake: Key Facts Positive pre-feasibility study completed in 2010. C$27 million invested since 2005, incl. 59,000m of drilling in 266 holes Bankable feasibility underway, fully financed, completion in 2012 Large resource amenable to low cost underground mining methods High proportion of heavy rare earths (20-28%) Recovery process defined. Pilot plant work in progress PFS Production model: 10,000 tpa TREO... Could be increased 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 4
  5. 5. Thor Lake: Project LocationFlotation plantat Thor lake,shipping ofconcentrate bybarge tohydromet plantat Pine Point.Concentratesshipped by railfrom Hay Riverto SeparationPlant 5
  6. 6. Nechalacho Deposit Basal Zone REE Mineralogy Heavy REE Minerals 20µm Fergusonite Y, HREE (Nb,Ta) O4 Zircon Zr (HREE) SiO4 Light REE Minerals Bastnaesite (LREE) F CO3 Allanite (LREE,Ca,Y)2 (Al,Fe)3 (SiO4)4 OH Fergusonite Synchisite Ca (LREE) (CO3)2 F Zircon Monazite (LREE) PO4REE distribution in fergusonite:REE Y La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb LuOxide % 29.0 0.30 4.40 1.70 15.6 10.4 1.60 14.3 1.80 9.80 1.20 4.10 0.70 4.40 0.70 6
  7. 7. NECHALACHO METALLURGY Metallurgical testing at SGS Minerals Lakefield Under supervision of John Goode, P.Eng, Consulting Metallurgist Flotation bench scale testing complete Concentrate with REE, Nb, Ta, Zr at about 5X concentration REE content approx. 10%, present recoveries: 80-85% Gangue minerals (silicates, etc.) ~40% of concentrate Mini-pilot flotation plant (4-5 tonnes) trial in progress at XPS Hydrometallurgical flowsheet defined (90% TREO recovery) “Cracking” of minerals complete Separation procedure for REE, Zr, Nb, Ta designed Mini-Pilot plant work to begin when flotation work complete Feasibility Study Pilot Plant work on 30 tonne sample (H2 2011) 7
  8. 8. Planning for HREE SeparationPlant 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 8
  9. 9. Avalon can be the leading producerof separated HREE oxides fromoutside China REE OXIDE Nechalacho Mt Weld Mountain Pass Nolans Canada Australia USA Australia tpa) (10,000 tpa) tpa) (11,000 tpa) tpa) (20,000 tpa) tpa) (20,000 tpa)Europium Eu 49 48 24 80Gadolinium Gd 371 107 34 200Terbium Tb 54 8 - 16Dysprosium Dy 271 13 - 66Holmium Ho 48 - - -Erbium Er 126 - - -Thulium Tm 17 - - -Ytterbium Yb 101 - - -Yttrium Y 1,169 41 20 264Lutetium Lu 14 - - - Total Heavies 22.20% 1.98% 0.39% 3.13%Lanthanum La 1,583 2,805 6,640 3,948Cerium Ce 3,572 5,141 9,820 9,506Praseodymium Pr 451 585 868 1,164Neodymium Nd 1,783 2,035 2,400 4,240Samarium Sm 391 250 160 474 Total Lights 77.80% 98.33% 99.44% 96.66% 9
  10. 10. Schedule to Production in 2015 Bankable Feasibility Study = $43 million Total Estimated CapEx: +C$1.0 billion 10
  11. 11. 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” 11
  12. 12. Zirconium Production Primary zirconium production mainly from zircon sands in Australia and South Africa (1.5 million tpa zircon) China imports zircon sands and is the only global producer of Zirconium Oxychloride (ZoC) the basic chemical feedstock for producing Zr metal and other chemicals China increasing ZoC consumption, applying export taxes Zr Metal critical for nuclear reactors as fuel cladding Many emerging uses: Hemodialysis treatment (zirconium phosphate) Solid Oxide Fuel Cells (yttrium stabilized zirconia) 12
  13. 13. Zirconium Use in Dialysis Zirconium Phosphate can be used for home dialysis treatment. The benefits of home dialysis: No time-consuming trips to hospital More frequent treatments possible, to mimic natural kidney function. More mobility possible for patients Less costly for government Individual consumption of ZrO2 equivalent is 1lb per treatment, with 3 treatments per week or potential demand of 7,000 tonnes per year ZrO2 to treat 100,000 patients Nechalacho will produce 18,000 tpy ZrO2 13
  14. 14. Management & Board ofDirectorsManagement Ron Malashewski P.Eng (AB), Malashewski, Manager, Investor Relations Donald S. Bubar P.Geo, Bubar, President, CEO & Director Virginia Morgan Investor Relations (on Morgan, maternity leave) Jim Andersen C.A., C.P.A., Andersen, V.P. Finance & CFO Directors Bill Mercer Ph.D., P.Geo., Mercer, Alan Ferry CFA Ferry, V.P. Exploration Non-Executive Chairman David Swisher, B.S. Min.Eng., David Connelly CStJ, CD, MBA, Connelly, V.P. Operations B.Comm Pierre Neatby B.A. Econ, Neatby, Phil Fontaine, B.A., LL.D. V.P. Sales & Mktg Brian D. MacEachen C.A. MacEachen, Audit Committee Chair Charlotte May Corporate Secretary May, Peter McCarter, B.A., LL.B., M.B.A. McCarter Cindy Hu CA, CPA, CGA, Controller Hu, Chair Governance/Compensation ctte Hari Panday C.A. Panday, 14
  15. 15. Key Staff & Consultants Chris Pedersen P.Geo, Senior Geologist, Camp Manager Pedersen, Martin Heiligmann Ph.D., Project Geologist Heiligmann, Finley Bakker P.Geo. Senior Resource Geologist Bakker, Brian Delany P.Eng., Senior Project Manager Delany, Dezhi Qi, P.Eng. Process Engineer Qi John Goode P.Eng. Metallurgical Consultant Goode, David Trueman Ph.D., P.Geo, Rare Metals Consulting Geologist Trueman, SGS Lakefield Research Metallurgy & Mineralogy Research, Scott Wilson RPA Inc., Pre-Feasibility Study Independent Consultants Ian M. London P. Eng. Energy and Market Development Consultant London, Stantec, Stantec Environmental Support Kaz Machida KAY Investment, REE Market Development Asia Machida, McGill University (Dr. A.E. Williams-Jones) Geological Research University, Williams- EBA Engineering, Permitting and Environmental Consultants FL Smidth, Engineering and Design, Flotation Plant Smidth, Xstrata Process Support, Metallurgical Testwork Support 15
  16. 16. Capital StructureJanuary 14, 2010Canada - TSX: AVLUnited States – NYSE Amex: AVL Amex: Frankfurt- OU5 Frankfurt- OU5Shares Outstanding 93,113,523Fully Diluted 103,508,970Market Capitalization US $532 million (S.O. @ $5.75)Recent Price Range US $4.32 - $7.1852 Week High / Low US $8.20 – C $1.89Cash Reserves C $38 million (No debt)Insider Share Position 4.1 million shares (4.5%)Institutional holdings CPP, TDAM, Front St., Excalibur, MFC Global 30-(est. 30-40%) Middlefield, AGF , Cantara, Sentry, ChiltonEmployees 20 (including part-time) 16
  17. 17. Corporate Information Avalon Rare Metals Inc. 130 Adelaide St. W, Suite 1901 M5 Toronto, ON Canada M5H 3P5 (416 364- 416) (416 364- 416) T: (416) 364-4938 ۰ F: (416) 364-5162 www.avalonraremetals.com www.raremetalblog.com Investor Relations: ir@avalonraremetals.com 17