Location and Ownership

The Nechalacho Rare Earth Element Deposit, Avalon's 100% owned flagship project, is located at Thor Lake in the Mackenzie Mining District of the Northwest Territories, about 5 km north of the Hearne Channel of Great Slave Lake and approximately 100 km southeast of the city of Yellowknife.

The Thor Lake property is comprised of five contiguous mining leases totalling 10,449 acres (4,249 hectares) and three mineral claims totalling 4,597 acres (1,860 hectares). The mining leases have a 21-year life and each lease is renewable in 21-year increments.  The original property covered by the mining leases is subject to two underlying royalty agreements entitling the royalty holders to a cumulative 5.5% Net Smelter Returns Royalty, of which 2.5% can be purchased at anytime at a fixed, inflation-adjusted, price.

The property is situated in an area known as the Akaitcho Territory which is subject to a comprehensive land claim negotiation between several communities of the Dene Nation and Canada's federal government. There is, at present, an interim measures agreement in place and under this agreement an interim land withdrawal was implemented in 2007, which precludes new mineral title from being granted by the Crown in the Akaitcho territory for a period of up to five years while a land-use planning process is completed. The rights of existing mineral rights holders in the area are unaffected, including right of access to mineral rights and Avalon is actively consulting with the four nearest Akaitcho Dene communities with a view toward implementing a co-operative development approach for the Nechalacho Rare Earth Element Deposit.