JOHANNESBURG (miningweekly.com) – TSX- and NYSE-listed Avalon Rare Metals is negotiating with landowners for two potential sites in the US for a rare-earth element separation plant to treat product from its flagship Nechalacho project, in Canada.
CEO Don Bubar said that Avalon sees the Gulf Coast region of the US as an attractive location for a rare earths plant.
The company recently completed a prefeasibility study focused on a site in Louisiana, which put a price tag of $302-million on a 10 000 t/y plant.
He said the firm was now actively pursuing land acquisition opportunities and was proceeding with due diligence investigations to determine the suitability of each property. It is also still reviewing potential alternative locations in both the US and in Canada.
The Gulf Coast region offered low-cost, bulk transportation alternatives, and proximity both to suppliers of the chemical reagents required for the separation process and to potential customers for its rare-earth products, Bubar added.
The separation plant is designed to treat chemical concentrates containing a blend of light and heavy rare-earth elements originating from the Nechalacho deposit, near Thor Lake in the Norhwest Territories.
Bubar said the separation plant design would now be incorporated into the development model for the project, which would push Nechalacho’s estimated capital expenditure to about $1.2-billion.
SNC-Lavalin completed the separation plant prefeasibility study and is also undertaking the Nechalacho study, which is scheduled for completion by the end of 2012.
With $50-million in cash resources, the company had sufficient funding available to complete the feasibility study and cover its overhead expenses, but needed to raise additional capital to begin funding preproduction development expenditures, such as deposits for long-lead-time equipment needed in the processing plant.
Avalon aims to start producing at Thor Lake by 2015.