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Avalon Rare Earth Mines operations slow but steady Tuesday May 5 2015 17 INDUSTRY MINING Tough Productive and More Powerful Challenging jobsites dont intimidate a Doosan crawler excavator. Hydraulic pump performance delivers fast class-leading cycle times with a synchronized engine and hydraulic system that boosts efficiency. Its designed to offer increased flotation in soft soil while precision controls provide accuracy and power. Whether youre digging a trench handling boulders or dumping debris the Doosan crawler excavator keeps you productive no matter what. Visit us to see what Doosan equipment can do for you. 103 Kam Lake Road Yellowknife NT 867-766-6025 Authorized Doosan Dealer Doosan and the Doosan logo are registered trademarks of Doosan Corp. in the United States and various other countries around the world. 15-D024 By DALI CARMICHAEL What is being called the most advanced rare earth metals development project located out- side of China is taking the way of the tortoise inching towards being fully operational rather than running to the finish line at full speed. Following a downturn in the market Ava- lon Rare Earth Metals CEO Don Bubar said there is no rush to approve permits and begin operations at the Nechalacho project located about 100 km southeast of Yellowknife at Thor Lake. Instead the company is taking its time waiting until the economy is once again operating in its favour. The rare earth market over the last couple yearshassoftenedalittlebitBubarsaid.You hadcircumstancesinChinathedominantpro- ducer of rare earths where there was a reduc- tioninexportsofrareearth.Thatcreatedsome real concerns amongst users to rely on that supplyfromChinanotablyinJapantogointo the market and buy up supplies to stockpile. This led to an upward pressure on the com- modity prices it was only a matter of time until the rare earth metals speculative bubble burst in 2011-2012. We were actually quite fortunate Bubar said. We were already doing our pre-feasi- bility study when the interest started to sur- face in rare earths and took advantage of all that to raise all the capital we needed which was about 100 million to take that project through feasibility. Thats positioned us well to catch the next uptrend. Financing for the project will be estab- lished once this uptrend occurs Bubar said. Using time to save money Lastyearwekindofwrappedupsomeofthe site work that we needed to do to prepare for further process test work on how were going to extract the rare earths Bubar said. Thats basically all we can do until were in a position to move forward with construction work at the site.Forthatobviouslyweneedprojectfinanc- inginplaceandforthatweneedcommitments from users of the products that any banker or financialist would want to rely on to provide project financing. In the meantime Avalon is looking for effi- ciencies in the operations economics. Namely the company is taking the opportunity to shop around potential locations for its hydrometal- lurgical plant where metals will be extricated fromroughconcentratesusingliquidchemicals. Originally Avalon was looking to host this facility at the old Pine Point mine site near Hay River but high costs and a lack of infrastruc- ture led the company to look south. Now the company is looking to house the operation in Canada before shipping to a final refinery in Franceownedbyinternationalchemicalcom- pany Solvay. Wehaventzeroedinononeyetbutitlooks mostlogicalthatweidentifyasiteelsewherein Western Canada - Saskatchewan or Alberta - thats not that far to transport the sort of semi- processed material we would produce at the site Bubar said. The Nechalacho project already has a Class A land use permit and a Class B water licence from the Mackenzie Valley Land and Water Board and is now continuing with formal ap- plications for further permits. According to Bubar Avalon can wrap up its finalconstructionandoperationspermitswhen- ever it is ready. We are through the key hurdles in terms of approvaloftheenvironmentalassessmentbut because were not likely to start construction any time soon were just not inclined to rush the process right now Bubar said. Some of those key hurdles include establish- ingaccommodationagreementswithindigenous groups around Great Slave Lake. We signed an accommodation agreement withtheDeninuKueandwehavevariousother levels of agreements with the other Akaitcho partners the NWT Mtis Nation the Tlicho andtheNorthSlaveMtisAllianceBubarsaid. Wesortofagreedtoagreebutjusthaventcon- cluded those conversations. While in this somewhat stagnant period Bubar said Avalon is still working to protect its stakeholders. On Apr. 29 the company an- nouncednewequityfinancingapublicoffering of up to 5 million. Itsjusttotopupourtreasurysothatweare adequately funded for the work programs we haveaheadofusforthenext12monthsBubar said.Whileourvaluationwaskindoflanguished compared to what it was a few years ago were kind of mindful of not overly diluting at these share prices. It shows our shareholders many intheNWTtoothatwedohavegoodaccessto capital we top up when we need to. Operations at Nechalacho are expected to start in 2018. PhotocourtesyofAvalonRareEarthMetals Camp at Avalons Nechalacho project located near Thor Lake.