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Avalon's Nechalacho Rare Earths Project to remain inactive in 2016, while the Company focuses on Lithium and Tin
Toronto, Ontario--(Newsfile Corp. - February 10, 2016) - Avalon Rare Metals Inc. ( TSX :...
About this update from Avalon Advanced Materials Inc.
[{"type":"text","content":"Avalon's Nechalacho Rare Earths Project to remain inactive in 2016, while the Company focuses on Lithium and TinToronto, Ontario--(Newsfile Corp. - February 10, 2016) - Avalon Rare Metals Inc. (TSX: AVL) (OTCQX: AVLNF) (\"Avalon\" or the \"Company\") provides the following update on activities on the Nechalacho Rare Earth Elements Project (\"Nechalacho Project\"), Thor Lake, NWT. Project work in calendar 2015 consisted mainly of concluding the ongoing metallurgical research, disposal of process waste materials and storage of bulk samples for future use.Rare Earths MarketsMarkets for rare earth elements remain quiet with prices falling some 30-50% in 2015 despite a 7% increase in overall demand. Overall supply is estimated by IMCOA to have increased some 9% due mainly to increased illegal production in China. This market downturn has resulted in the bankruptcy of at least two potential new producers outside China and a dramatic decline in investor interest, which has significantly reduced the amount of capital available for new rare earths development projects like Nechalacho. Consequently, expenditures on Avalon's Nechalacho Project will remain minimal in 2016 as the Company re-focuses its efforts on the Separation Rapids Lithium Project and East Kemptville Tin-Indium Project. Status of Toll-refining AgreementWith the Nechalacho Project now inactive and the Company's priorities focused elsewhere, Avalon and Solvay have agreed to mutually terminate the tolling agreement first announced on March 3, 2014 (www.avalonraremetals.com/news_media/display/index.php?id=9978) to process and refine Avalon's mixed rare earth concentrate. This will save Avalon money and free up capacity for Solvay at its La Rochelle refinery, should other toll refining opportunities emerge before work at Nechalacho resumes. Avalon and Solvay have agreed to consider entering into a new agreement, should increased demand for rare earths create a new opportunity to advance the Project. Avalon has benefited from its cooperation with Solvay and looks forward to renewing this cooperation when the market for rare earths recovers. Potential for Production of Zirconium Chemicals The Nechalacho deposit contains significant quantities of the zirconium mineral zircon, which the Company had planned to recover and process for its contained heavy rare earths. Recent metallur...