Avalon attracts development partner to Nechalacho rare earth elements project Yellowknife, NWT
30 January 2019
Avalon Advanced Materials Inc. is pleased to announce that it has attracted a new partner in private Australian company, Cheetah Resources Pty Ltd. to participate in the development of the rare earth resources on its mining leases collectively comprising the Nechalacho Project at Thor Lake near Yellowknife, NWT, Canada.
Avalon and Cheetah have signed a binding terms sheet under which Cheetah will acquire ownership of the near surface resources in the T-Zone and Tardiff Zones for a total cash consideration of C$5 million while Avalon will retain ownership of the resources in the Basal Zone that was the subject of its 2013 Feasibility Study. Avalon will continue to manage work programs on the Property and retain its 3% NSR type royalty. The formal agreement is expected to be completed within the next 60 days following which a new work program will be initiated focusing on the T-Zone rare earth resources.
Cheetah is focused on the small-scale development of rare earth resources enriched in the “magnet rare earths”, neodymium and praseodymium (“Nd-Pr”), presently in short supply and high demand for clean technology applications notably electric vehicles. Such an opportunity was recently recognized by Avalon in the T-Zone and Tardiff Zones (see the Company’s News Release dated October 10, 2018) that appears to be well-suited for very low cost, pilot-scale development utilizing ore-sorting technology. This model also has the important benefit of having minimal environmental impacts. Cheetah is interested in pursuing this opportunity collaboratively with Avalon. Once in operation, the partners will have the opportunity to begin to evaluate by-product opportunities from the T-Zone, notably lithium, and the future growth potential from the other mineralized zones on the Property.
Avalon President and CEO, Don Bubar commented “We are delighted to have attracted a like-minded partner in Cheetah to the rare earth opportunity at Thor Lake. The agreement structure will allow Avalon to resume its long term development aspirations for the Nechalacho Project, and secure a source of non-dilutive working capital to continue to advance our other near term development aspirations for the East Kemptville Tin and Separation Rapids Lithium Projects.”