avalon rare metals corporate fact sheet

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Avalon Rare Metals Inc. is a mineral development company focused on rare metals and minerals in Canada. Its 100% owned flagship Nechalacho Rare Earth Elements (“REE”) Project at Thor Lake, NWT is the most advanced large heavy rare earth elements (“HREE”) development project in the world outside China. Initial production is scheduled for 2018, subject to arranging off-take commitments and project financing for construction to begin in 2015. Avalon’s portfolio includes five other rare metals and minerals projects - of which the Separation Rapids Lithium and East Kemptville Tin-Indium Projects are also at an advanced stage. Avalon is adequately funded, has no debt and its work programs are progressing. Social responsibility and environmental stewardship are corporate cornerstones. Investment Highlights Avalon offers diversified exposure to a broad range of rare metals and minerals (including tin) that are critical raw materials for clean technology Nechalacho Project, with a completed feasibility study, an approved Environmental Assessment and a rare earth oxide refining solution in place, is uniquely positioned to bring a new supply of the scarce, yet vital heavy rare earths to the market East Kemptville Tin-Indium Project was re-activated in 2014 and is advancing steadily with a new NI 43-101 resource estimate and a conceptual redevelopment study completed in early 2015 Separation Rapids Lithium Minerals (Petalite) Project is advancing due to new demand from the glass-ceramics industry for the petalite product and for its potential to produce high purity lithium chemicals for the growing rechargeable battery market Critical Raw Materials Demand for HREE is growing rapidly because of their application in high strength permanent magnets, now vital in automotive technology, wind turbines and many other consumer electronic products Due to lead toxicity concerns, tin is now used to make lead-free solders, found on all electronic circuit boards. This application now accounts for over 50% of global tin demand. China dominates the world’s production of many of the world’s critical metals and minerals including HREE and tin; the need for new suppliers of HREE to emerge outside of China continues to grow Capital Structure As of May 11, 2015 Trading Symbol Canada TSX: AVL Trading Symbol US NYSE MKT: AVL Shares Issued & Outstanding* 141,943,258 Fully Diluted* 160,424,350 Market Cap US$37 million (S/O @$0.26) Year High/Low US$0.73 - US$0.16 Cash Reserves C$5 million (no debt) Institutional Holdings: UBS, Empery, CPP, Global X, Carnegie, Hancock, DFA, Chilton & others (As at April 28, 2015) CORPORATE PROFILE TSX and NYSE MKT: AVL Sustainability Reporting In December 2014, Avalon released its third Sustainability Report which includes a self-assessment of sustainability performance in accordance to the Global Reporting Initiative G4 core level and the Mining Association of Canada’s Towards Sustainable Mining standards. The report can be downloaded from Avalon’s website. Critical Five: Neodymium, Dysprosium, Terbium, Europium and Yttrium Corporate Fact Sheet As at May 25, 2015

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Page 1: Avalon Rare Metals Corporate Fact Sheet

Avalon Rare Metals Inc. is a mineral development company focused on

rare metals and minerals in Canada. Its 100% owned flagship Nechalacho

Rare Earth Elements (“REE”) Project at Thor Lake, NWT is the most

advanced large heavy rare earth elements (“HREE”) development project

in the world outside China. Initial production is scheduled for 2018,

subject to arranging off-take commitments and project financing for

construction to begin in 2015.

Avalon’s portfolio includes five other rare metals and minerals projects -

of which the Separation Rapids Lithium and East Kemptville Tin-Indium

Projects are also at an advanced stage. Avalon is adequately funded, has

no debt and its work programs are progressing. Social responsibility and

environmental stewardship are corporate cornerstones.

Investment Highlights

Avalon offers diversified exposure to a broad range of rare metals and

minerals (including tin) that are critical raw materials for clean

technology

Nechalacho Project, with a completed feasibility study, an approved

Environmental Assessment and a rare earth oxide refining solution in

place, is uniquely positioned to bring a new supply of the scarce, yet

vital heavy rare earths to the market

East Kemptville Tin-Indium Project was re-activated in 2014 and is

advancing steadily with a new NI 43-101 resource estimate and a

conceptual redevelopment study completed in early 2015

Separation Rapids Lithium Minerals (Petalite) Project is advancing due

to new demand from the glass-ceramics industry for the petalite

product and for its potential to produce high purity lithium chemicals for

the growing rechargeable battery market

Critical Raw Materials

Demand for HREE is growing rapidly because of their application in high

strength permanent magnets, now vital in automotive technology, wind

turbines and many other consumer electronic products

Due to lead toxicity concerns, tin is now used to make lead-free solders,

found on all electronic circuit boards. This application now accounts for

over 50% of global tin demand.

China dominates the world’s production of many of the world’s critical

metals and minerals including HREE and tin; the need for new suppliers

of HREE to emerge outside of China continues to grow

Capital Structure As of May 11, 2015

Trading Symbol Canada TSX: AVL

Trading Symbol US NYSE MKT: AVL

Shares Issued & Outstanding* 141,943,258

Fully Diluted* 160,424,350

Market Cap US$37 million (S/O @$0.26)

Year High/Low US$0.73 - US$0.16

Cash Reserves C$5 million (no debt)

Institutional Holdings: UBS, Empery, CPP,

Global X, Carnegie, Hancock,

DFA, Chilton & others

(As at April 28, 2015)

CORPORATE PROFILE

TSX and NYSE MKT: AVL

Sustainability Reporting

In December 2014, Avalon

released its third

Sustainability Report which

includes a self-assessment of

sustainability performance in

accordance to the Global

Reporting Initiative G4 core

level and the Mining

Association of Canada’s

Towards Sustainable Mining

standards. The report can be

downloaded from Avalon’s

website.

Critical Five: Neodymium, Dysprosium, Terbium, Europium and Yttrium

Corporate Fact Sheet As at May 25, 2015

Page 2: Avalon Rare Metals Corporate Fact Sheet

The technical information contained in this document has been reviewed and approved by Bill Mercer, Ph.D., P.Geo. (ON), P.Geo. (NWT), Vice President Exploration of Avalon and Donald Bubar, P.Geo. (ON), President and CEO of Avalon, the qualified persons for the purposes of National Instrument 43-101. For additional information on the Nechalacho Rare Earth Elements Project, see the technical report entitled “Technical Report Disclosing the Results of the Feasibility Study of the Nechalacho Rare Earth Elements Project, ” dated May 31, 2013 and effective April 17, 2013. This document contains or incorporates by reference “forward looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, which may not be based on historical fact. Readers can identify many of these statements by looking for words such as “believe”, “expects”, “will”, “intends”, “projects”, “anticipates”, “estimates”, “continues” or similar words or the negative thereof. Statements that are not based on historical fact contained in this presentation, including through documents incorporated by reference herein, are forward-looking statements that involve risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in the forward-looking statements . Such forward-looking statements reflect the Company’s current views with respect to future events and include, among other things, statements regarding targets, estimates and/or assumptions in respect of reserves and/or resources , and are based on estimates and/or assumptions related to future economic, market and other conditions that, while considered reasonable by the Corporation, are inherently subject to risks and uncertainties, including significant business, economic, competitive, political and social uncertainties and contingencies. These estimates and/or assumptions include, but are not limited to: grade of ore; rare earth and by-product commodity prices; metallurgical recoveries; operating costs; achievement of current timetables for development; strength of the global economy; availability of additional capital; and availability of

supplies, equipment and labour. Factors that could cause the Company’s actual results, performance, achievements, developments or events to differ materially from those expressed or implied by forward-looking statements include, among others, but are not limited to, market conditions, the possibility of cost overruns or unanticipated costs and expenses, the impact of proposed optimizations at the Company’s projects, actual results of exploration activities , mineral reserves and mineral resources and metallurgical recoveries, discrepancies between actual and estimated production rate, mining operational and development risks and delays, regulatory restrictions (including environmental), activities by governmental authorities, financing delays, joint venture or strategic alliances risks, or other risks in the mining industry, as well as those risk factors discussed or referred to in the Company’s annual Management’s Discussion and Analysis and Annual Report filed with the securities regulatory authorities in all provinces and territories of Canada, other than Québec, and available at www.sedar.com. Most of the foregoing factors are beyond Avalon’s ability to control or predict. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur. The forward-looking statements contained herein are qualified in their entirety by this cautionary statement. Readers should not place undue reliance on the forward-looking statements, which reflect management’s plans, estimates, projections and views only as of the date hereof. The forward looking statements contained herein is presented for the purpose of assisting readers in understanding the Corporation’s expected financial and operating performance, and the Company’s plans and objectives, and may not be appropriate for other purposes. Avalon does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities law.

Avalon Rare Metals Inc.

130 Adelaide Street West, Suite 1901

Toronto, ON Canada M5H 3P5

T: (416) 364-4938

www.avalonraremetals.com

Avalon’s mineral property assets are all 100%

owned and all located in Canada.

Avalon’s primary focus has been the

Nechalacho Rare Earth Elements Project.

Located at Thor Lake, NWT, it is a world class

resource of rare metals and minerals being

developed primarily for its potential to produce

significant quantities of heavy rare earth

elements. Avalon has invested over $100

million to date in taking the Project through

completion of a comprehensive Feasibility

Study. This study yielded a pre-tax IRR of

22.5% and NPV at a 10% discount rate of

$1.351 billion, based on a $1.575 billion

capital cost estimate.

The Nechalacho deposit is unique in its

enrichment in the critical HREE such as

terbium and dysprosium, which, along with

neodymium, are a needed for high strength

permanent magnets used in energy- efficient

motors and generators. The very large Basal

Zone of the Nechalacho deposit contains

Measured and Indicated Resources of 61.90

million tonnes grading 1.64% TREO (total rare

earth oxides) and 21.53% HREO/TREO (heavy

rare earth oxides as a percentage of TREO) at

the new Base Case US$345 Net Metal Return

(“NMR”) cut-off value. Within this deposit,

there are an estimated 21.27 million tonnes

of Measured and Indicated Resources at the

US$800/tonne NMR cut-off grading 2.20%

TREO and 25.19% HREO/TREO, illustrating the

presence of large, high grade sub-zones within

the deposit. The deposit is also enriched in

tantalum, niobium and zirconium, which all

represent potential valuable by-products.

Project engineering, permitting and product

marketing are well underway. The

Environmental Assessment was approved by

the Federal Government in November 2013.

Community consultation work is also

progressing well. An updated Feasibility Study

is being prepared and the permitting process

is expected to be completed in 2015.

In March 2014, Avalon entered into a 10-year

binding toll-refining and strategic partnership

agreement with Solvay. The agreement

removes CAPEX for a refinery from the

economic model and reduces Project risk in

meeting product quality and delivery

expectations of consumers.

At Separation Rapids, located near Kenora,

Ontario, Avalon is developing a world-class

lithium minerals (petalite) deposit. Petalite is

used directly in the glass industry to make

thermal shock resistant glass-ceramics and

new demand for petalite has emerged from

that industry. A high purity petalite concentrate

was produced from a bulk sample processed

in 2014 which received initial approval from

prospective customers in the glass industry.

Initial leach tests have successfully

demonstrated the potential to recover high

purity lithium chemicals for rechargeable

battery applications. The next steps include

extracting a larger bulk sample to produce

additional petalite concentrate samples for

industry evaluation and conduct further

testwork on recovering lithium chemicals.

At East Kemptville, located in Yarmouth

County, Nova Scotia, Avalon is evaluating the

potential for redeveloping a past producing tin

mining operation as a new producer of tin,

copper, zinc and indium. In 2014, a 1,000

metre confirmation drilling program was

completed. A new 43-101 compliant resource

estimate was completed in 2014 and

conceptual redevelopment plan completed in

February 2015. In 2015, Avalon will be

proceeding with metallurgical process

testwork and a diamond drilling

program to better define the

known tin resource and test the

potential to expand the

resource at depth.

PROJECT SUMMARY

Experienced Management Team

Donald S. Bubar, P. Geo., President and CEO

Jim Andersen, CA, CPA, CPA (Illinois), VP,

Finance, Corporate Secretary and CFO

David Marsh, FAusIMM (CP), SVP, Metallurgy

and Technology Development

William Mercer, PhD, P. Geo., VP, Exploration

Pierre Neatby, BA Econ, VP, Sales and

Marketing

Mark Wiseman, BSc, MBA, VP, Sustainability

Gerry Leipert, BSc, P. Eng, Sr. Project Manager

Cindy Hu, CA, CPA, CPA (Illinois), Controller

Melanie Smith, LL.B, Senior Legal Counsel

Investor Relations Contact

Ron Malashewski

Manager Investor Relations

[email protected]