North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Avalon Advanced Materials Inc. Jan. 30 reported that Cheetah Resources Pty Ltd., a private company based in Australia, will participate in the development of the Nechalacho rare earth elements project at Thor Lake, roughly 100 kilometers (60 miles) southeast of Yellowknife, Northwest Territories.

In 2013, Avalon published a feasibility study for a mine at Nechalacho that is calculated to produce 9,286 metric tons of rare earths, 19,763 metric tons of zirconium, 2,231 metric tons of niobium and 243 metric tons of tantalum per year.

This is based on 61.9 million metric tons of measured and indicated resource located in the project's Basal zone that averages 1.64 percent total rare earth oxides, 3.1 percent zirconium dioxide, 0.41 percent niobium oxide and 0.04 percent tantalum oxide.

Under the agreement reached with Avalon, 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 percent net smelter return-type royalty.

The formal agreement is expected to be completed by the end of March, with a new work program that will target the T-Zone rare earth resources.

Cheetah is focused on the small-scale development of rare earth resources enriched in the neodymium and praseodymium, magnet rare earths that are in high demand for clean technology applications such as electric vehicles.

In 2018, Avalon initiated an investigation into utilizing ore-sorting technology to develop the T-Zone and Tardiff zones as a low cost, pilot-scale operation, a model that has the added 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.

"We are delighted to have attracted a like-minded partner in Cheetah to the rare earth opportunity at Thor Lake," said Avalon Advanced Material President Don Bubar. "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 (Nova Scotia) and Separation Rapids lithium (Ontario) projects."

–SHANE LASLEY

CORRECTION: This article has been corrected to accurately state the Basal zone resources - 61.9 million metric tons of measured and indicated resource averaging 1.64 percent total rare earth oxides, 3.1 percent zirconium dioxide, 0.41 percent niobium oxide and 0.04 percent tantalum oxide.