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Avalon Rare Earths strikes refining accord and strategic partnership

12th March 2014

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Junior project developer Avalon Rare Metals recently struck an offtake deal with global chemicals firm Solvay to process Avalon's rare-earth concentrate into pure rare earth oxides for ten years, from the start of deliveries to Solvay's rare-earth separation and refining plant located in La Rochelle, France.

Avalon, which is developing the Nechalacho rare earth elements (REE) project, located at Thor Lake, around 100 km south-east of Yellowknife, in the Northwest Territories, said that Solvay would provide it with technical support to optimise the design, engineering and commissioning of Avalon's hydrometallurgical processing plant.

Further, Avalon would immediately start shipping a concentrate to La Rochelle containing 98.5% rare-earth oxide (REO), following which Solvay would return separated oxides of praseodymium, neodymium, europium, gadolinium, terbium, dysprosium, lutetium and yttrium ranging in purity from 99.5% to 99.99%.

Under the tolling agreement struck at the Prospectors and Developers Association of Canada convention, the industry's largest gathering, Solvay could also opt to buy selected REOs from Avalon. All rare-earth products not bought by Solvay would be sold by Avalon and delivered directly from the La Rochelle plant.

"This tolling agreement greatly reduces the technical risk and costs associated with building, commissioning and operating a dedicated REE refinery for the Nechalacho project, making the whole project a less risky and more attractive investment opportunity.

“In addition, this reduces the potential for delays in initial product deliveries as perceived by our customers, who know they can rely on Solvay to produce the quality they require in a timely, proven and reliable way,” Avalon president and CEO Don Bubar said.

Avalon is currently working on its feasibility study optimisation work and would now integrate the Solvay tolling agreement into the project development model.

The decision to use Solvay's facilities to refine the company's mixed rare earth concentrate made the property optioned in Geismar, Louisiana, for a refinery, potentially available as an alternative location for the hydrometallurgical facility, originally planned for Pine Point, in the Northwest Territories.

Avalon said its next steps would involve producing an updated technical report that incorporated the results of all the recent optimisation work, as well as completing land use permit applications, carrying out additional pilot plant trials of the new hydrometallurgical plant flowsheet needed to finalise detailed plant designs and engineering, securing commitments on offtake and arranging project financing.

But the clock is ticking to finalise project financing by the end of the year, or else Solvay would have certain termination rights under the agreement.

Effective August 2013, Nechalacho had measured and indicated resources for the Basal zone at 61.9-million tonnes, grading 1.64% total rare earth oxides and 0.35% heavy rare earth oxides.

Edited by Creamer Media Reporter

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