Overall Program
Avalon's 2009-2010 work program on the Thor Lake project, budgeted at $10.0 million, generated the technical data required to complete the Prefeasibility Study ("PFS") on the Nechalacho deposit completed in June 2010. This program included:
- Definition drilling in the southern part of the Nechalacho deposit on 50 metre centres to define Indicated Mineral Resources in the high grade Basal Zone layer and a block model for mine design purposes. This drilling also provided bulk samples for pilot plant testing.
- Definition drilling in selected areas for Measured Mineral Resources.
- Metallurgical process development to define flowsheets to concentrate the REE-bearing mineral phases and then to process this concentrate hydrometallurgically to recover the rare earths into a chemical concentrate.
- Market studies on the rare earth elements and the other rare metals present in the deposit to determine market size and develop price assumptions.
- Environmental baseline studies to map the local fauna, flora, hydrology and weather patterns.
- Community consultation, especially with First Nations, to inform community members of potential environmental and social impacts along with potential business opportunities leading to the development of Impacts and Benefits agreements.
- Short take off and landing airstrip construction in order to facilitate 12 month operations and also improve safety aspects of project work. This was completed in July 2010.
Drilling (as of May 2010)
The 2009-10 definition drilling program to date on the Nechalacho deposit has been carried out in a number of phases:
- Phase 1 was completed during winter 2009 and involved 5,477 metres in 26 holes.
- Phase 2 drilling resumed in July 2009 with completion of 44 drill holes totalling 9,098 metres continuing the definition drilling work in the southern part of the Nechalacho deposit. About five tonnes of drill core were generated in 2009 for metallurgical pilot plant testing purposes.
- Phase 3 completed in April 2010, continued drilling on 50 metre centres in lake and swamp areas under frozen conditions. This primarily focused on extending the existing Indicated Mineral Resources.
Key results of the 2010 winter program were:
- Intersecting the Basal Zone in drilling outside the bounds of the known deposit, indicating extension of the mineralization under cover to the west, north and south.
- Definition of a new area of high grade heavy rare earth ("HREE" samarium to lutetium including yttrium) rich resources in the Basal Zone at the west end of Long Lake (referred to as West Long Lake).
- Identification of a new area of near surface exceptionally high grade resources east of North Tardiff Lake.
Phase 4 commenced in July 2010. The core diameter was changed to PQ on one rig for this drilling and drill holes with this rig will be close spaced in order to achieve Measured Mineral Resources with the large diameter PQ core generating greater volumes of core for metallurgical pilot plant testing. The other drill will continue with HQ core, and work on expanding the West Long Lake indicated resources.
Starting with the summer 2009 drilling, geotechnical logging has been added to the geological logging in order to assist with mine planning. Drill holes producing oriented core will be included in the summer, 2010 program for more detailed geotechnical purposes. Also, drill holes are used for studies of groundwater for mining and environmental purposes.
Limited condemnation drilling has been completed on a number of sites. "Condemnation drilling" has two objectives. Firstly it is utilized to ensure that mine infrastructure will not interfere with mining, by testing for mineralization in proposed infrastructure locations. Secondly, it provides geotechnical information for construction planning. As of July 2010, the proposed tailings site in the northeast of the property has been tested with four drill holes, the airstrip with two and the proposed plant site with one.
In the 2010 winter program, drilling was successful in testing extensions to the Nechalacho mineralization. Drill hole L10-241, located on Cressy Lake (200 metres north of Thor Lake), intersected Basal Zone with 1.27% TREO and 23% HREO/TREO over 14 metres. It is believed that the Basal Zone in this area was partially "dyked-out" by a late diabase dyke and that this intercept is not necessarily representative of the Basal Zone at this location. As this intercept is about 390 metres northwest of the closest historic drill hole, about 570 metres northwest of the closest modern drill hole, and is not included in the Inferred Resource, the intercept is considered highly significant for expanding the deposit to the north. As well as promising REE values, the intercept included typical Nb and Ta values for the Basal Zone.
On the west end of Thor Lake, hole L10-249 intersected 1.34% TREO and 19% HREO/TREO over 53 metres, some 400 metres further west than any previous drill holes that intersected mineralization. The thickness of the intercept, along with the higher grade portion with 1.63% TREO over 21 metres, is particularly encouraging.
Testing for mineralization 100 metres south of the most southerly drill hole located on Long Lake, L10-243 intersected the Basal Zone with 1.44% TREO and 21% HREO/TREO over 18 metres. This intercept demonstrates that the south shore of Long Lake, a linear escarpment that had been previously interpreted as a fault displacing the mineralization, is simply an erosional feature and, in fact, the Basal Zone remains open to the south.
In conclusion, drill holes 241, 243 and 249, all clearly demonstrate potential to greatly increase the rare earth resource from that released in June 2010.
Definition drilling on the West Long Lake target area at 50 metre hole spacing intersected very high grade REE mineralization in the Basal Zone. For highlights of this drilling, please see News Release 10-11, 19th July 2010. It is anticipated that the results will increase both the tonnage and grade of the Indicated Resources in the deposit when the resource estimate is updated summer 2010.
