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SOMBA K'E/YELLOWKNIFE - A Toronto-based exploration company believes it is sitting on a property outside Yellowknife host to a heavily-concentrated deposit of rare minerals known as rare earth elements, for which the global demand is rapidly climbing.

Robert Sayine of Fort Resolution works on Avalon Ventures' Thor Lake rare earths project southeast of Yellowknife. The site is host to numerous high-quality rare earths - minerals ultimately used to produce colours on computer screens and flat screen TVs and serve as magnets in hybrid cars. - photo courtesy of Avalon Ventures Ltd.

One year ago, Avalon Ventures began drilling at its 100 per cent-owned Thor Lake project, located 100 km southeast of Yellowknife.

Meanwhile, demand for rare earths and metals - like zirconium, beryllium, lithium and terbium, which give flat screen TVs their green colours - has significantly increased in recent years, making Avalon's Yellowknife-area project all the more attractive, Mercer said.

The company is in the midst of preparing its pre-feasibility study, which will take the place of a previous scoping study that undervalued the tonnage and grade of the deposit.

"The way that project was designed during the scoping study is not how we're thinking of it now," said Bill Mercer, the company's vice-president of operations. "We have a better sense of the shape of the deposit."

Mercer visited the property last week to oversee drilling and to gage the amount of work that will be available for Northern contractors.

There are currently 12 workers ridding the site of equipment left behind by previous owner Beta Minerals, which sold the property to Avalon in 2005.

Commercial production is tentatively slated to begin in 2012 or 2013, which should require close to 200 miners and should last "many, many decades," according to Mercer.

Rare earth elements are used for various things. They account for the vibrant colours seen on TV or computer screens, serve as magnets inside hybrid cars and are used in cell phones and digital cameras.

The supply of rare earths in the world is almost completed dominated by China, which supplies more than 90 per cent of the global demand for the minerals.

As he explained it, there are two types of rare earths: light and heavy.

Heavy rare earths are the rarer and therefore more valuable of the two.

Terbium, which is a heavy rare earth and is present at the Thor Lake site, is worth $900 per kg, while some light rare earths net only $3 per kg, said Mercer.

"The thing about Thor Lake is it has a lot of the heavy rare earths as opposed to the light rare earths, whereas most other deposits around the world almost always only have the light rare earths," he said

David Connelly, a Yellowknife-based consultant for Avalon, said the project is well-suited to fill a large gap in world supply, given China's restriction on rare earth exports.

"It's fair to say that manufacturing nations would very much like to have more than one country of supply," said Connelly.

"There's 35 kg of rare earths in environmentally smart cars. There's rare earths in environmentally efficient electronics like air conditioners. As the demand for environmentally efficient automobiles and electronics goes up, demand for rare earths goes up."