Industry and Information Bulletins

Dear Shareholder,

I am proud to report on a significant new initiative undertaken by Avalon in co-operation with the NWT Mine Training Society and Aurora College to help promote skills development among aboriginal people for increased participation in the mineral exploration industry. This initiative, led by Avalon´s Vice-President, Exploration, Dr. Bill Mercer and our Yellowknife-based northern advisor, David Connelly, followed from the Company´s decision in 2008 to adopt the PDAC´s Principles for Responsible Mineral Exploration as core policy of the Company, as recommended by Avalon´s Advisory Committee on Corporate Social Responsibility, chaired by Dr. Mercer.

I would like to share with you the text of Dr. Mercer´s speech, delivered at the launch of the program, held yesterday in Yellowknife and entitled:

"Realising community opportunities in the exploration industry"

Chief(s), Minister, Elders, ladies and gentlemen, on behalf of Avalon Ventures, I would like to thank you all for being here.

I would like to acknowledge the Yellowknives Dene people, as this is their land and we are here courtesy of their hospitality.

I would especially like to acknowledge and thank those who have contributed to this course happening whose logos are represented on the publicity material and banners.

I would like to explain how the idea of this course started, as it may give you some idea of evolving approaches to corporate responsibility.  About year ago, Avalon Ventures formed a Corporate Social Responsibility Advisory Committee, which I chair. We believe this may be unique among mineral exploration companies. The objective is to advise the company´s management and board how to drive the company towards excellence in social responsibility, including community engagement, training, employment environment and health and safety. The committee comprises three independent advisors, among them being a Chief, an international environmental expert and a retired engineer with senior responsibility in environment, health and safety in a major Canadian mining company.

This driller helper course came out of a meeting last summer where we discussed the need for skilled workers at our Thor Lake project, and that the company was bringing people in from as far away as Newfoundland, when people in the Northwest Territories were calling and asking for work. The suggestion from Chief Glenn Nolan of the MIssanabie Cree First Nation, was that we should run a training course that could bring skills to Aboriginal people so that they could have those more reliable, better paid, skilled jobs.

We have come a long way from that seed of an idea. The next key to our success has been David Connelly. It was David that introduced me to Hilary Jones of the Mining Training Society, of which I was totally unaware. Hilary´s enthusiasm has been critical to success. As many of you know it has been David who has been the driver behind the course, though not without the help of many others, and especially the support of Hilary and the marvellous staff of the Mine Training Society.

In the meantime, the contact with the Mine Training Society has been additionally beneficial as we were able to be the stimulus for a First Aid First Responder course, run by St John Ambulance, and we are very happy that three of the four graduates a week ago were First Nations people who worked for Avalon most of last year, and whose names were put forward by Avalon.

Mineral exploration is the equivalent of research and development for the mining industry. Without mineral exploration, mining, and all its spin off benefits, cannot exist. There is huge potential employment opportunity for Aboriginal people in mineral exploration. Mineral exploration activity is also one of the few economic activities that occur in the north of Canada, often close to First Nations communities. This means people can easily work in a rotation system where they are home on a regular basis. It often involves living on-the-land which some Aboriginal people in rural areas are used to, as they  tend their trap lines or hunt, usually in conditions not as luxurious as a large mine camp. Mineral exploration also involved various work types that are well suited to gradual development of skills - and this is where I see the Driller training going - this time we will train 12 individuals to be drill helpers. The next step is to take some of them to the level of being a drill runner - the person in charge of the drill during the shift - and finally to drill foreman.

The increased employment of Aboriginal people in the exploration industry should be a two-way street. As the mineral exploration industry opens up skilled employment opportunities for Aboriginal people, there should also be an infusion of Aboriginal concepts of economic advancement that will help the mining industry create a better model for development with a greater sensitivity to communities and the environment, where mining can coexist with communities and the natural environment. In partnership we can learn from each other.

Avalon´s Thor Lake project is in the traditional territory of the Akaitcho Dene people and Chief Drygeese Territory. We believe that our project can lead to positive outcomes for economic development in the Yellowknife region and for the Akaitcho people. The project promises to lead to potentially important industrial spin off activity for the region and Canada. The minerals at Thor Lake are vital to the "Green" revolution such as renewable energy, hybrid cars and energy saving electric motors. The deposit has the potential to support an exceptionally long life mine. It is only right that minerals that are so important to the world improving its energy use and a cleaner environment should be in the forefront of improving the lives of the people who live near the potential operation. The project will create important spin off benefits for the area including demand for infrastructure such as power and roads, need for services and the possibility of downstream processing. In addition, the new resource estimate released Tuesday indicates that the mine would potentially have a very long life, easily in excess of 30 years.

Avalon aims to be a leader in the exploration industry with respect to corporate social responsibility. We believe we are the first, and at present, only, company to publicly state that we will implement the newly published Prospectors and Developers Association Corporate Social Responsibility Principles and Guidance Notes for Responsible Exploration. A one page summary of these principles is available on the table for you to take with you.  This Driller Helper training course, also being a first in so many ways, fits perfectly with our corporate objectives.

Finally, let me express my feeling that this course is a  small step in the big scheme of things, but every little step helps on the path to changing the paradigm of the relations between First Nations communities and minerals companies. Avalon is very proud of being part of this positive initiative.

Again I would like to thank our industry and other partners in the program. Particularly it is wonderful to have the participation of a First Nation supplier - the Deton Cho - to the exploration industry as an equity partner in a Mine Training Society program.

I would like to challenge any minerals industry partners to offer to take on the rest of the trainees.

Finally, I would like to both congratulate and challenge the students. You have been chosen from more than 80 applicants so you all must show special promise for this job. The challenge is to enjoy the learning and do well so that we will have the support in the future for further courses. Integral to the Common Core drill certification is a focus on health and safety. Drilling is an occupation that demands attention in this area. Please learn the health and safety aspects especially well so that you have a long injury free career.

Finally, we are also proud to report that today, the Company´s efforts in regard to this training initiative and the Thor Lake rare metals project were formally recognized in the GNWT legislature by the Minister of Industry, Tourism and Investment, Robert McLeod.

Regards,

Don Bubar,
President & CEO