Avalon Reports 40% Increase in Indicated Resources in the Nechalacho Rare Earth Elements Deposit, Thor Lake, NWT

by Zagros on September 8, 2010

Sep 08, 2010 19:19 ET

TORONTO, ONTARIO–(Marketwire – Sept. 8, 2010) - Avalon Rare Metals Inc. (TSX:AVL)(OTCQX:AVARF) (“Avalon” or the “Company”) is pleased to provide an update on the Inferred and Indicated Mineral Resources reflecting the results from the 2010 winter drilling program on its Nechalacho rare earth elements (“REE”) deposit, Thor Lake, Northwest Territories, Canada.

As previously announced in the Company’s news release dated July 19, 2010, results from the Company’s 2010 winter definition drilling program in the area referred to as West Long Lake encountered considerable new, higher grade REE mineralization in the Basal Zone. This new data was integrated into the block model for the deposit and its effect on the resources has now been estimated by Avalon’s Senior Resource Geologist, Finley Bakker, P.Geo.

The winter drilling has increased the Indicated Mineral Resources in the key Basal Zone part of the deposit by 40% with an additional 5.97 million tonnes grading 1.57% TREO with 25.5% HREO/TREO1, using the same $260 NMR (Net Metal Return) cut-off grade applied in the previous resource estimate reported on June 14, 2010. Combined with the previously announced NI 43-101 compliant Indicated Resources located in the area referred to as Tardiff Lakes, the total Indicated Mineral Resources in the Basal Zone now stands at 20.45 million tonnes grading 1.75% TREO with 23% HREO/TREO.

Further, the Basal Zone in the West Long Lake area contains a high grade sub-zone defined by applying a higher cut-off grade at $600. This yields 1.87 million tonnes grading 2.19% TREO, with 28.8% HREO/TREO, 4.29% Zirconium Oxide, 0.50% Niobium Oxide and 0.06% Tantalum Oxide, representing 30% of the total Indicated Resources in the West Long Lake area. Further additions to this high grade sub-zone are anticipated from the 2010 summer drilling program on the land- accessible north extension of this zone.

The increase in Indicated Mineral Resources in the Basal Zone will have a positive effect on the economics of the project, through extension of the mine life used in the financial model. In addition, the definition of higher grade sub-zones that can be selectively mined immediately after start-up will further benefit the project economics through increased revenues during the early years of production. In addition, the new high grade Indicated resources in the West Long Lake area are conveniently located adjacent to the planned access ramp requiring little adjustment in the mine plan to develop them.

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