Environment and Permitting

Environmental Studies

Environmental baseline studies on the property were initiated in 2008 and are being carried out by Stantec AXYS (formerly Jacques Whitford). This program includes studying waterfowl, fisheries, aquatic mammals and raptor surveys, vegetation and endangered plant species, both surface and ground waters, water chemistry in the lakes of the area, aquatic biology, terrain analysis and collecting meteorological data.

The 2009 environmental work program included packer test holes to measure groundwater conditions and some aquatic studies under winter conditions.

Avalon has now completed four years of Environmental Baseline studies for many key disciplines. Avalon has endeavored to ensure a reduction in potential environmental impacts related to the Thor Lake Project by continuing its study efforts through Stantec and EBA Engineering Consultants Ltd. Environmental monitoring will continue throughout the drilling program and into construction and operations.

Nechalacho, Thor Lake project location map for Project Description Report

Community and Permitting

For 2011, Avalon continues its community engagement work in Lutsel K’e, Fort Resolution (Deninu Kue First Nation and Fort Resolution Metis Council), Yellowknife (YKDFN, Tlicho First Nations and North Slave Metis Association) and Hay River (Katlodeeche First Nation and Hay River Metis Council). Continuing community engagement is focused on development of partnerships and facilitating employment and business opportunities for First Nations members.  To this end, Avalon has entered into negotiation agreements with the Deninu Kue First Nation (“DKFN”), Lutsel K’e Dene First Nation (“LKDFN”) and Yellowknives Dene First Nation ("YKDFN").  This type of initial agreement (often referred to as a memorandum of understanding (“MOU”)), is done in order to frame the negotiations toward an impacts and benefits-type agreement.  Avalon has commenced negotiations on Accommodation Agreements, with the LKDFN, YKDFN and DKFN, with the objective of concluding these agreements in late 2011 or early 2012.

On April 23, 2010, Avalon filed a land use permit and water license applications with the Mackenzie Valley Land and Water Board ("MVLWB") for the purpose of mining, milling and refining Rare Earth elements from the Nechalacho deposit.  These permits went through an initial prescreening process before being referred to the Mackenzie Valley Environmental Impact Review Board ("MVEIRB") on June 11, 2010.  MVEIRB started the Environmental Assessment (EA) process which included the completion of scoping sessions, terms and terms of reference by February 14, 2011.  Avalon then submitted a Developers Assessment Report (“DAR”), (otherwise known as an Environmental Impact Statement), on May 20, 2011, just three months upon receiving the final terms of reference from MVEIRB.  A copy of the DAR can be found on MVEIRB’s public registry at www.reviewboard.ca.  MVEIRB issued deficiency statements to Avalon on August 25, 2011 and on September 27, 2011, Avalon supplied all responses to comply with MVEIRB’s requests.  Upon receiving final responses from MVEIRB, the EA process will continue with Information requests, technical hearings, public hearings and undertakings before finishing the review process.  Currently, this process is expected to be complete before the end of 2012.

The Company also received a new exploration land use permit from the MVLWB covering its current activities at the site, as the existing permit was scheduled to expire on July 4, 2011. The new land use permit was issued by the MVLWB on June 23, 2011, for a period of 5 years beginning on July 5, 2011.