The Company holds a 2% Net Smelter Return ("NSR") royalty interest in five claims, comprising part of the East Cedartree gold property located 70 km southeast of Kenora, Ontario. The titleholder to the claims, Metalore Resources Ltd. ("Metalore"), can re-purchase a 1% NSR from the Company at any time for $1.0 million cash. Avalon sold its title to the claims to Metalore in 2002 for $50,000 cash and 10,000 shares of Metalore.
Metalore has carried out several diamond drilling programs since the fall of 2002 to follow up on encouraging results from previous drilling by Avalon in 1998. The most recent program, conducted in 2006-07, reported several significant gold intersections including 104.3 g/t gold over 4.3 m, but Metalore has not yet reported a resource estimate for this mineralized gold zone.
