Avalon Rare Metals signed an accommodation agreement with Deninu Ku’e First Nation - one of three First Nations the mining company hopes to solidify agreements with before breaking ground on its rare earth elements mine at Thor Lake on Great Slave Lake’s north shore not far from Yellowknife.
Signing the agreement with DKFN removes a perceived risk factor for investors – that local communities could hold things up down the road, said Don Bubar, president and CEO of Avalon Rare Metals.
Right now, getting First Nations on board with the project has been a high priority, Bubar told The Journal.
Avalon is currently in the middle of negotiations with the Yellowknives Dene and Lutsel K’e, both of which consider the proposed mine site to be in their traditional territory.
Avalon plans to barge concentrate from Thor Lake across Great Slave Lake to the old Pine Point lead-zinc mine site where it hopes to construct a hydrometallurgy facility. Bubar said Avalon will stockpile the rare earth elements concentrate and transport it in containers across the lake during the summer shipping season.
Bubar said there is little environmental risk associated with the plan to ship the concentrate across Great Slave Lake. He said rare earth elements are much less hazardous than many other substances – such as fuel oil – currently shipped there in barges.
If all approvals and agreements go as hoped, 2016 will be the earliest Avalon starts production. Bubar noted the Thor Lake mine would be unique for Canada, not only in the presence of heavy rare elements (other rare earth elements mines in Canada are focused on light rare earth elements) but also for the initial processing plants that will be constructed both on the mine site and at Pine Point. Most mining concentrate is shipped elsewhere for processing, whereas Avalon plans to do initial and secondary processing in the North before shipping the concentrate elsewhere (possibly to the U.S. Gulf Coast) for final refinement.
Should the mine go into production, it would staff 225 people at the Thor Lake mine and another 65 at the Pine Point facility. Bubar said the mine would operate for a minimum of 18-20 years.
The Thor Lake project is currently undergoing an environmental assessment. Avalon plans to extract 15 rare earth elements, for which there is a growing worldwide demand. The world market is currently served mainly by China.
If the project proceeds, it would feed jobs and indirect industries to Yellowknife. Bubar said Avalon plans to have a permanent camp at Thor Lake with staff rotating in and out on a regular basis.