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Page 1: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

R E th El t Rare Earth Elements, Corporate and Project

I f tiInformation

…advancing green technology

www.avalonraremetals.com March 2010

Page 2: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Safe Harbour Statement

Forward looking information

Certain statements contained in or incorporated by reference into thispresentation constitute forward-looking statements. Such statementsreflect the current views of Avalon Rare Metals Inc with respect to futurereflect the current views of Avalon Rare Metals Inc. with respect to futureevents and are subject to certain risks, uncertainties and assumptions.Many factors could cause the actual results, performance or achievementsof Avalon Rare Metals Inc. that may be expressed or implied by suchy p p yforward-looking statements to vary from those described herein shouldone or more of these risks or uncertainties materialize. Avalon Rare MetalsInc. does not intend, and does not assume any obligation, to update theseforward-looking statements.

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Page 3: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

RARE EARTH ELEMENTSRARE EARTH ELEMENTSINDUSTRY, ECONOMICS &

APPLICATIONS

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Page 4: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

What are Rare Earth Elements?

Light REE:La = LanthanumLa = LanthanumCe = CeriumPr = PraseodymiumNd = NeodymiumSm = Samarium

Heavy REE:Eu = EuropiumGd = GadoliniumTb = TerbiumTb = TerbiumDy = DysprosiumHo = HolmiumEr = ErbiumTm = ThuliumYb Y biYb = YtterbiumLu = LutetiumY = Yttrium

Neodymium Dysprosium Terbium and Europium in highest demand

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Neodymium, Dysprosium, Terbium and Europium in highest demand

Page 5: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

REE Economics: A Question of Balance Between Q“Heavies” and “Lights”

Only occur altogether as a group and recovered as a group & must beOnly occur altogether as a group and recovered as a group & must be sequentially separated at additional cost

In most deposits, the balance is tipped toward the light rare earths (“ ) 9 99% f(“LREE”) which comprise 97-99% of resource

Deposits having an unusual balance with a high proportion of heavyrare earths (“HREE”) are very rare( ) y

Consequently, HREE are much more valuable

US$470.00/kg for europium vs. US$4.00/kg for cerium

Basal Zone of Nechalacho deposit is exceptional among hard rock REE deposits for it’s high proportion of HREE (>20%)

Implies a high value ore and higher operating margins

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p g g p g g

Page 6: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Rare Metals: Key to the Green Energy EconomyEnergy Economy

Rare earth elements (“REE”) such as Neodymium, Terbium and Dysprosium; & other rare metals such as Lithium, Gallium, Indium, Tantalum, Zirconium

Creating new materials such as thin films (solar) and high strengthCreating new materials such as thin films (solar) and high strength magnets, the key to energy-efficient electric motorsRenewable energy: solar power and wind turbinesLED lighting, rechargeable batteries, light weight alloysHybrid and electric cars (30 kg REE)

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Page 7: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Main Green Energy Economy Applications of Rare Earth

Application Rare Earth T h l

REE Required

ppElements

Technology

Hybrid, Electric and Plug-in Cars

REE permanent magnets

Nd, Pr, Dy, Tb

Wind and tidal power generation

REE permanentmagnets

Nd, Pr, Dy, Tb

Flat screen displays and monitors

REE phosphors create the colors blue, green and red

Y, Eu, Tb, Gd, Pr, Ce

LED lights REE phosphors Y Eu TbLED lights REE phosphors enable light to match brightness and color with substantially less energy usage

Y, Eu, Tb

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less energy usage

Page 8: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Key Application of REE:Magnets for Electric MotorsMagnets for Electric Motors

REE (Neo) Magnets reduce electric motor/generator size and weight, improve efficiency

Major new applications include:Industrial air conditioners (500 kg)

100 Kw generator with neo magnets

Industrial air conditioners (500 kg)Hybrid-electric cars (1-3 kg)Wind turbines (0.75-1.0 tonne/MW)MRI machines (1-3 tonnes)

Use of REE magnets in air conditioners can reduce power consumption by 50% with same performancep y p

HREE dysprosium is key to making “heat resistant” magnets vital to automotive and other applications

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Page 9: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Emerging REE Magnet ApplicationsApplications

Tidal Power Generation TurbinesBeing installed in Nova Scotia and B.C. in 2010

100 MW potential in Nova Scotia

Run of River PMG hydro power generationRun-of-River PMG hydro power generationA 4MW generator contains 1 tonne of Nd magnets

Electric Bicycles (EB)y ( )300-350 g Nd Magnets per EB,

20 million EB sold in China in 2009

Sales forecast to grow 30 million EB pa = 9 000 tpa Nd magnetsSales forecast to grow 30 million EB pa = 9,000 tpa Nd magnets

Magnetic RefrigerationUses alloys of gadolinium magneto-caloric effect

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y g g

Commercialization within 1-2 years

Page 10: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

China Dominates Global REE ProductionProduction

China currently produces over 95% of global REE supplyChina now imposing export gquotas and tariffs on REE New non-Chinese supply sources needed to maintain

Mountain Pass, USA era

balanceSupplies of key HREE from China (Y, Dy, Tb) will remain ( , y, )tight with potential for a complete export banJapan totally reliant on China

Yet, Chinese companies are actively trying to acquire additional REEresources around the world. Why?

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p yfor supplies

Page 11: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Global Rare Earths Market

IMCOA 2009 updated market forecast Global demand in 2008 124,000 tonnes TREO valued at US$1.25 billion

Forecast demand in 2014200,000

250,000

O Forecast demand in 2014 200,000 tonnes TREO valued at US$2-3 billion, assuming 10% per annum growth rate in

100,000

150,000

Deman

d tp

a ‐ R

EO

p gdemand from existing technology only

Does not factor in demand

0

50,000

2004

2005

2006

2007

2008

2009f

2010f

2011f

2012f

2013f

2014f

ROW = rest of world supply (yet to come on stream) TREO = Total Rare Earth Oxides

Does not factor in demand from new technology

Estimated that 25% of all new t h l i l REE

China Supply ROW Supply Adjusted Global  Demand China Demand

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st ea ) O ota a e a t O des technologies rely on REE

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Rare Earth Element Prices

Source: Metal-Pages.com, February 26, 2010Prices are indicative and basis FOB ChinaPrices are indicative and basis FOB China

Metal Oxide Principal Uses Price US$/kg

Light Rare EarthsLanthanum Oxide 99% min Re-chargeable Batteries 5.30 – 5.80

Cerium Oxide 99% min Catalyst, glass, polishing 3.90 – 4.40

Praseodymium Oxide 99% min Magnets, glass colourant 25.50 – 26.00

Neodymium Oxide 99% min Magnets, lasers, glass 26.50 – 27.00

Samarium Oxide 99% min Magnets, lighting, lasers 4.25 – 4.75

Heavy Rare EarthsEuropium Oxide 99% min TV colour phosphors: red 470.00 – 490.00

Terbium Oxide 99% min Phosphors: green, magnets 420.00 – 440.00

Dysprosium Oxide 99% min Magnets, lasers 130.00 – 135.00

Gadolinium Oxide 99%min Magnets, superconductors 7.40 – 7.90

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Yttrium Oxide 99.999% min Phosphors, ceramics, lasers 10.00 – 10.50

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Price Trends:Dysprosium & Terbium OxideDysprosium & Terbium Oxide

Source: Metal-Pages.com. basis FOB China

Dy Current Price:US$135/kg

Tb Current Price:US$440/kg

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US$135/kg US$440/kg

Page 14: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Recent Developments in REE MarketsMarkets

Chinese interests trying to acquire REE resources outside China in Australia (and elsewhere?)

China Non-Ferrous Mining blocked from acquiring 51% interest in Lynas Corporation by FIRB (Mount Weld)y p y ( )East China Exploration acquires 25% interest in Arafura Resources (Nolan’s Bore)

In 2008 Chevron sells Molycorp (Mountain Pass Mine) to U SIn 2008, Chevron sells Molycorp (Mountain Pass Mine) to U.S. private equity led by Resource Capital Funds and Goldman Sachs... IPO in 2010?

China announces further reductions in REE export quotas and announces a potential ban on future exports of unprocessed HREE: notably dysprosium and terbium

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HREE: notably dysprosium and terbium

Page 15: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

REE Investment Criteria

Heavy rare earth enrichment is key

Light rare earth deposits are not rare at all and need to be exceptional grade toLight rare earth deposits are not rare at all and need to be exceptional grade to compete with existing and emerging light rare earth sources

Only heavy rare earths are truly supply-challenged

Deposit / resource size is not a critical factor in valuation (many are large)

REE Mineralogy/Metallurgy is very important

Many REE-bearing minerals, not all amenable to REE recovery

Some are high in REE (bastnaesite) some low (apatite)Some are high in REE (bastnaesite), some low (apatite)

Presence of contaminants an important consideration (U, Th)

How advanced is the project?

“It i t l t t j f i iti l d li ti t i l“It is at least a ten year journey from initial resource delineation to commercial operation” – Nick Curtis, CEO, Lynas Corp.

Size of global REE market, while growing, is not yet big enough to support dozens of new producers

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First mover advantage for more advanced projects

Page 16: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

AVALON RARE METALS INC.AVALON RARE METALS INC.

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Project Locationsj

THOR LAKERare EarthsRare EarthsTantalumNiobiumZirconiumBerylliumGalliumLithiumHafniumThoriumAvalon offers

diversifieddiversified exposure to a broad range

f l

All projects 100% owned

of rare metals

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j

Page 18: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Avalon’s Competitive Advantages: NechalachoAdvantages: Nechalacho

Basal Zone has exceptionally high proportion of heavy p y g p p yrare earths ( >20%)

Implies a high value ore and higher operating margins

Viable metallurgical process defined

Valuable by-products (zirconium, niobium, gallium)

Low thorium, no significant contaminants

Relatively advanced compared to new entrantsAlready 5 years along the “10 year journey”

Well-financed ($15 million), no debt

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Experienced management, technical experts

Page 19: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Capital Structureas at March 23 2010as at March 23, 2010

Canada - TSX: AVLCanada TSX: AVL

United States - OTCQX: AVARF SEC 12g3-2(b) # 82-4427

Shares Outstanding 78,801,698

Fully Diluted 87 483 198Fully Diluted 87,483,198

Market Capitalization C $201 million (S/O @ $2.55)

Recent Price Range C $2.40 - $3.00

52 Week High / Low C $4.24 - $0.51

Cash Reserves C $15.0 million

Insider Share Position 3.4 million shares (4.3%)( )

Institutional holdings (25%) CPP, TDAM, Front St., Excalibur, NatCan, MFC

Global, Faircourt, Cantara, Seamans, Fuchs Glbl

Balance Sheet Assets C $42 5 million (Nov 30/09)

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Balance Sheet Assets C $42.5 million (Nov. 30/09)

Page 20: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

One Year Price Chart (TSX)( )

CIBC Financing

CNBC / NY Times

The Dines Letterg

Prospectus cleared

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Page 21: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

2010 Corporate Prioritiesp

Complete Nechalacho prefeasibility by April, 2010, then:Begin Environmental Impact Assessment and project permittingInitiate pilot plant work to optimize process flowsheetUpdate resources and begin mine planningUpdate resources and begin mine planningDevelop First Nations partnerships

Accelerate Nechalacho rare metal product marketingRecruited rare metals marketing expertise – Pierre NeatbyConsider strategic partnerships

Evaluate strategic alternatives for Separation RapidsEvaluate strategic alternatives for Separation Rapids

Complete East Kemptville preliminary economic assessment, secure surface rights and advance to final f ibilit

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feasibility

Page 22: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Management, Directors& Strategic Advisors& Strategic Advisors

Management DirectorsDonald S. Bubar, P.Geo, President, CEO & Director

Jim Andersen, C.A., C.P.A.,

Alan Ferry, CFANon-Executive Chairman

Brian D. MacEachen, C.A. A dit C itt Ch iV.P. Finance & CFO

Bill Mercer, Ph.D., P.Geo., V.P. Exploration

Audit Committee Chair

Hari Panday, C.A.

Peter McCarter, B.A., LL.B., M.B.A. Chair Governance/Compensation ctteDavid Swisher, B.S. Min.Eng.

V.P. Operations

Charlotte May, Corporate Secretary

Chair Governance/Compensation ctte

Phil Fontaine, B.A., LL.D.

Strategic Advisors Cindy Hu, CA, CPA, CGA, Controller

Virginia Morgan, B.Com, Manager, Investor Relations

F. Dale Corman, P.Eng.

Gerald Prosalendis, Communications

David Connelly, Community Relations

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Joe Monteith, Business development

Page 23: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

NECHALACHO, THOR LAKENECHALACHO, THOR LAKEPROJECT DETAILS, CSR PRACTICES

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Page 24: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Thor Lake: Project Locationj

Proximity to yGreat Slave Lake provides access toaccess to railhead at Hay River by barge in summer and ice road in winter. Current access is fly-in

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in.

Page 25: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Nechalacho Geological Model Evolving Evolving

Blachford Lake PeralkalineIntrusive Complex, NWT

Grace Lake GraniteBiotiteGranodiorite

I d G

Model Section

Leucoferrodiorite

T-Zone

Thor Lake Syenite

Two-Mica

Granite

WhitemanLake Quartz

Syenite

Interpreted Geometryin Cross Section

A i l f l dCaribouLake

Gabbro

Thor Lake SyeniteGranite

Hearne Channeland Mad Lake

Granites

A unique example of a layered Peralkaline intrusive complex, with the upper, rare metal-richpart of the system readily

ibl f i i

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accessible for mining.

Page 26: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Nechalacho REE Deposit:Development ProgressDevelopment Progress

2007: Scoping study, expln. drilling & $16 million financing2008: Delineation drilling programs 16,640 metres, 85 holes and 43-101 resource estimate, community engagement2009: Definition drilling 14,575 metres, 70 holes, metallurgical, g , , , g ,environmental and market studies & $17.5 million financing2010: Pre-feasibility study, begin EA, MOU, engineeringExpenditures to date total over $16 0 millionExpenditures to date total over $16.0 million$10 million in planned expenditures CY2010

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Nechalacho REE Deposit: Drill Hole Location MapDrill Hole Location Map

N-S Section line

cc KeyccE-WSection Line

Key Area

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156156

Page 28: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Nechalacho REE Depsoit

N-S Composite Section (looking west)

p

U LREE Z

Area of Indicated resources

Upper LREE Zone170m

1590m

Basal HREE ZoneAverages 30 m thick, 2% TREO 20% HREE

Hole 70: 1.90% TREO with 32.6% HREO

Hole 154: 1.88% TREO

1590m

TREO, 20% HREE over 6.0 metres with 20.5% HREO over 20.0 metres Drill Hole with

Basal Zone

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Intercept

Page 29: l E t hR EtR are Earth Elements, Corporate and Project If …avalonadvancedmaterials.com/_resources/Web_update_2010... · 2010-03-25 · China Dominates Global REE Production China

Basal Zone Drilling ProgramMain Target AreasMain Target Areas

N Basal Zone BreakN

N-S Section

Basal Zone Break

-206

Approx. area of existing Indicated

-162

-161 -143

-208

-207

New target areaexisting Indicated

Mineral Resources

-159 -157

-160 -155 -158

-142 -153

-176 -175Hole L09-207 intersected 43.0m @1 89% TREO with 27 2% HREO

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142-154

1.89% TREO with 27.2% HREO

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Nechalacho REE Deposit Mineral Resources @ 1.60% TREO Cut-off Grade Jan. 14, 2010

Zo ne Mill io ns to nne s % T REO % HREO HREO/T REO

INDICAT ED MINERAL RESOURCES

Basal Zone 9.00 1.86 0.43 23%

INFERRED MINERAL RESOURCES

Upper Zone 22.44 2.00 0.16 8%

Basal Zone 37.56 1.94 0.40 21%

Sufficient Indicated to support PFS. Good continuity confirmed in Basal Zone.I di t d Mi l R d t d b H d t C lt t f i i l ti t b W d

Basal Zone 37.56 1.94 0.40 21%

T o ta l 60.00 1.96 0.31 16%

Indicated Mineral Resources updated by Hudgtec Consultants from original estimate by Wardrop Engineering Ltd (A Tetratech Company) and subject to final audit for PFSDefining Indicated Resources is a function of drill hole spacing being reduced to average of 50 metres.

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TREO = total rare earth oxides, HREO = heavy rare earth oxides (europium to lutetium + yttrium)

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REE Distribution in the Basal Zone Ore Compared with Other pREE Deposits & Avg. Value/kg

100

70

80

90

100

40

50

60

70

SEGYT

Nd,Pr, Dy

20

30

40 Ce,La

Value 9 9 11 4 10 5 3 6 14 2 22 1 US$/kg

0

10

Mt Pass Baotou Sichuan MtWeld Nolans ThorLake

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Value 9.9 11.4 10.5 3.6 14.2 22.1 US$/kgBased on fall, 2008 prices from metal-pages.com and criteria defined by Arafura Resources Limited

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Nechalacho AeromagneticsAssociated anomaly indicates potential extensions to REE deposit potential extensions to REE deposit in subsurface

1k1km

Nechalacho deposit:Known exposed extent

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South Basal Zone Geometryy

The Basal Zone is deeper to the south underLong Lake where higher HREE grades are found

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S. Basal Zone Geometry and Ore Blocks with >0 5% HREOOre Blocks with >0.5% HREO

Clear correlation of high HREE gradeswith deeper parts of Basal Zone and this area is open to the south under cover rocks

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Nechalacho REE Deposit Conceptual Development PlanConceptual Development Plan

Barren Rock D mp

VentMine Portal

Barren Rock Dump

Tailings PondLong Lake

Underground MiningUpper Zone

g g

Basal Zone

Tailings Storage

Mining underground room & pillar/long-hole stopingMining underground room & pillar/long hole stoping1,000 tonnes per day (tpd) years 1 to 4, ramping to 2,000 tpd by year 8

Flotation processing to produce mineral concentrate (80% recovery)Hydrometallurgical treatment of mineral con in plant south of GSLy g p

Production of 5,000 to 10,000 tpy TREO in chemical concentrateMixed REE carbonates shipped to third party for separation

Market capture 2 to 5% (est. 2014 TREO demand ), 5 to 10% of HREOO i C $200 250/ i l i i ill & h d

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Operating Costs: $200-250/tonne inclusive mine, mill & hydromet

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Basal Zone HREE Mineralization in Zircon and Fergusonite: gMetallurgical Recovery Process

82-85% REE Recovery in on-site plant82-85% REE Recovery in on-site plantFine-grinding (40 micron)

Froth Flotation

H d t ll i l l t l t d ff it

20μm

Hydrometallurgical plant located off-site Caustic cracking of REE con followed by acid leaching (HCl or H2SO4) will put 90% of REE plus Zr and Nb into solution90% of REE plus Zr and Nb into solution

Solvent extraction then precipitation of two mixed REE carbonates (one mainly LREE, second mainly HREE)Fergusonite

ZiLREE, second mainly HREE)

Separation of REE oxides (Asia?)

REE Y La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Lu

REE distribution in fergusonite:

Zircon

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Oxide % 29.0 0.30 4.40 1.70 15.6 10.4 1.60 14.3 1.80 9.80 1.20 4.10 0.70 4.40 0.70

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Metallurgical Progressg g

Mine Site Flotation Process Testwork CompleteFlowsheet Developed optimization continuingFlowsheet Developed, optimization continuingConfirmation testing in progress with Xstrata Process Control

Hydrometallurgical Testwork OngoingC ti ki ith N OH f ll d b l hi i l ith H SOCaustic cracking with NaOH followed by leaching mainly with H2SO4

Excellent progress to deliver 4-6 products:HREE mixed carbonateLREE mixed carbonateNiobium Pentoxide & Zirconium Oxychloride by-productsGallium and tantalum (possibly)

2010 PlansUtilize existing 5 MT of core stored in Yellowknife Mini-pilot plant at Xstrata facility to produce 600 kg concentrateHydroMet pilot run using 20kg per day for 30 days

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TREO Production Forecast vs. 2014 Demand Forecast2014 Demand Forecast

Nechalacho 2014Nechalacho 2014 production forecast at 5,000 or 10,000 tonnes of total rare

th idearth oxides per annum

2014 Demand forecast after Kingsnorth, 2009

49 4% La + Ce49.4% La + Ce21.3% Nd + Pr 3.7 % Sm25.6% Heavies +Y

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Schedule to Production in 2014Capital Costs at +$400 millionCapital Costs at +$400 million

Thor Lake P j t S h d l

2010 2011 2012 2013 2014 2015

Aboriginal Engagement

Pre-feasibility Draft Document

Draft HydroMet Flowsheet

Project Schedule Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Q3 Q4 Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4

Final Pre-feasibility Report

Project Description Report

MVLWB Prescreening Process

MVEIRB EA ProcessMVEIRB EA Process

Ministerial Approval

MVLWB LUP/Water Licensing

Bankable Feasibility

Final Designs & Financing

Project Construction

Project Start-up

S &

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Sales & Market Development

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Permitting Processg

Upon completion of PFS, Avalon will generate a project d i ti t t b it t th M k i V ll L d ddescription report to submit to the Mackenzie Valley Land and Water Board (MVLWB) for a Type A Land Use Permit (LUP) & Type A Water License

45 day pre-screening process

2.0 year Environmental Assessment (EA) Process conducted by the Mackenzie Valley Environmental Impact Review Board

3 to 6 month Federal Ministerial review & approval

1.0 year MVLWB process to finalize LUP & Water License and determine conditions for eachdetermine conditions for each

Posting Environmental Bond

Begin Construction. Capital cost est. $400 million +/- 10-15%

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g p

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A Leader in Environmental & Social Responsibility: Winner of p yPDAC’s 2010 e3 Plus Award

Naming ceremony

Community meetings and site visits

March 2010 PDAC Awards CeremonyAccepting award

from Jon Baird, PDAC

President

First Nations training

Employment at site

President

p y40% aboriginal

Business development

Wind power evaluation with YKDFN

Sept 2009 naming ceremony

Chiefs Ed Sangris and Ted Tsetta with Don

Bubar

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with YKDFN

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Thor Lake Project Consultants j

David Trueman, Ph.D., P.Geo, Rare Metals Geologist

Chris Pedersen, P.Geo, Rare Metals Geologist

Bruce Hudgins, P.Geo. Resource database management

John Goode, P.Eng. Metallurgical Consultant

SGS Lakefield Research, Metallurgy & Mineralogy

Scott Wilson RPA Inc., Pre-Feasibility Study Independent Consultants

Ian M. London, P. Eng. Energy and Market Development Consultantg gy p

Jacques Whitford Stantec, Permitting, Environmental Studies

Pierre Neatby, Market Development

Kaz Machida KAY Investment REE Market Dev AsiaKaz Machida, KAY Investment, REE Market Dev. Asia

McGill University, (Dr. A.E. Williams-Jones) Geological Research

Fasken, Martineau Dumoulin, Aboriginal Law

CIBC World Markets Investment Bankers

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CIBC World Markets, Investment Bankers

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OTHER PROJECTSOTHER PROJECTS

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Separation Rapids - Lithiump p

Separation Rapids is a large NI 43-101 compliant p p g plithium resource defined, that is permitted to start production once a market is established and development partnerships are finalized

2010 PlansContinue lithium product marketingConsider strategic options to take advantage of investor i i li hi l d h bl binterest in lithium related to rechargeable battery demand growth

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East Kemptville Tin-Indiump

Preliminary Economic Assessment in progressExpenditures in 2009: $318,000New resource block model developed from historical dataMetallurgical testing completedMetallurgical testing completed 90% recoveries of tin achievable using new technologyAttractive economics at current tin pricesPotential for tin recoveries from old tailingsPotential for tin recoveries from old tailings

2010 PlansNegotiate site access for confirmation drilling & tailings samplingComplete PEA and attempt to secure surface rights$500,000 regional exploration program in progressDrilling of three high priority targets commenced in January

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Drilling of three high priority targets commenced in January

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Tin-Indium Market Demand

Growing demand for tin and indium from consumer electronics industriesindustriesTin is increasingly being used to replace lead in solders due to lead toxicity issues. Europe, China and California have all recently passed laws requiring the use of lead free solders inrecently passed laws requiring the use of lead-free solders in electronics. Tin and indium are used as an alloy in flat-screen display panels. Indium is alloyed with gallium in CIGS (Copper Indium GalliumIndium is alloyed with gallium in CIGS (Copper Indium Gallium Selenide) solar panelsPrices for tin quoted on the London Metal Exchange at over US$8 00/lb compared to less than US$2 00/lb when EastUS$8.00/lb, compared to less than US$2.00/lb when East Kemptville ceased operations in 1992Indium (99.99% purity) is currently trading at prices in excess of US$500/kg in China

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US$500/kg in China

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East Kemptville Regional Targets MagneticsTargets - Magnetics

Duck Pond Deposit~9mt @ 0.11% Sn + Zn&Cu

Main and Baby Zone

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Corporate Informationp

Avalon Rare Metals Inc. 130 Adelaide St. W, Suite 1901Toronto, ON Canada M5H 3P5

T: (416) 364 4938 ۰ F: (416) 364 5162T: (416) 364-4938 ۰ F: (416) 364-5162

www.avalonraremetals.comwww raremetalblog comwww.raremetalblog.com

Investor Relations: i @ l t [email protected]

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