Avalon Rare Metals Inc of Toronto, ON has announced the completion of a positive feasibility study for its Nechalacho rare earth elements project at Thor Lake in the Northwest Territories. The study was prepared by SNC-Lavalin Inc and is the first feasibility level study to be completed on a major heavy rare earth project outside of China. Total project construction capital costs are estimated at CDN$1.575 billion, which is inclusive of a 13% contingency and CDN$122 million in sustaining capital. Of the total capital costs, approximately CDN$1.152 billion is expected to be incurred in the Northwest Territories and CDN$423 million in Geismar, LA where the company plans to build its separation plant. Avalon says that total measured and indicated mineral resources would conceivably be sufficient to support continued mining operations at Nechalacho for over 90 years, if the mining rate is unchanged and mineral resources are converted to mineral reserves at the same rate experienced in the feasibility study. The crushing facility will have a design capacity of 4,000 tonnes/day and the concentrator a design capacity of 730,000 tonnes/year. The final concentrate is expected to consist of over 7.37% TREO, 15.53% ZrO2, 1.71% Nb2O5 and 0.19% Ta2O5.
Don Bubar, Avalons CEO, Said, We are very pleased to have delivered a positive feasibility study for the Nechalacho project within the budget and the schedule we set for ourselves in May, 2012. The robust economics, despite a substantial capex burden, testify to the exceptional quality of the Nechalacho deposit and its large size offers the potential for creating a scalable, multi-generational business. The successful completion of this study confirms Nechalachos status as the most advanced major heavy rare earth element project in the world outside China. With the feasibility study in hand, we can now accelerate the process of securing commitments on future product sales and attracting financial partners to participate in the further development of the project.
Avalon says the key factors influencing project timing are: securing a strategic or financial partner, timely receipt of all requisite operating permits and approvals, securing binding agreements for off-take to support project financing, and the availability of equity and debt financing at a reasonable cost.
Volume 27 issue 8