SOMBA K'E/YELLOWKNIFE
The public hearings for the proposed Nechalacho rare earth metals mine at Thor Lake is now underway in Yellowknife.
Don Bubar, far right, president of Avalon Rare Metals Inc., the company advancing the Nechalacho rare earths project near Yellowknife, said meeting with senior executives of the Chinese Rare Earth Industry Association on Sept. 13. 2012, during a trade mission to China was helpful in introducing the company to the market in China. Pictured are Larry Liang, RCI Capital Group, left, Premier Bob McLeod, Gan Yong, president of the Chinese Rare Earth Industry Association, and Bubar. - photo courtesy Avalon Rare Metals Inc.
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The underground mine proposed by Avalon Rare Metals Inc., located about 100 km southeast of the city, also involves a metallurgical plant at the former Pine Point mine area, a flotation plant, tailings management facility, access road and fuel storage, and barge docking facilities on Great Slave Lake.
A number of parties, including representatives of proponent Avalon Rare Metals Inc., Nechalacho site neighbour Blachford Lake Lodge, Environment Canada and the Yellowknives Dene First Nation were scheduled to present at the hearings Monday through Wednesday at the Tree of Peace.
"This is the final stage of the environmental review process for Nechalacho and it's an important project for several reasons," said Tom Hoefer, executive director of the NWT and Nunavut Chamber of Mines. "Number one, it would be diversifying our industry into a whole new area of rare earth metals."
While Nechalacho is among the higher profile projects in the territory currently advancing through the environmental review process, it is facing some of the most difficult capital market conditions seen in several years, Hoefer added, as Avalon braces for the next big challenge after the environmental review process, which is raising money to finance the project through the construction phase, scheduled for 2016.
"Capital markets are not very favourable right now," said Don Bubar, president and CEO of Avalon. "We have to have customers to buy the products that we seek to produce and we need to have them lined up before we can move forward with construction because the financial markets and banks need to know at the end of the day there's going to be people who want to buy what we produce before they'll finance the project."
The company is continuing to find prospective customers for the products of the proposed mine at Nechalacho, with its latest memorandum of understanding signed last month with an Asian company interested in purchasing enriched zircon concentrate--a byproduct of the rare earth in deposit.
"Zircon is a source of zirconium--another rare metal that we have in deposit which has growing use," Bubar said, explaining that it is a tricky and expensive mineral to process, and not done much outside of China. "We felt it was a little bit too expensive for us to try to accomplish right out of the gate with this project but in the interim we knew there was a market for this material as it was, without having to do any further processing and that market was largely in Asia, and we found a consumer over there that was really interested in it actually."
Avalon has previously announced the signing of about half a dozen such agreements with prospective buyers around the world, but Bubar declined to disclose the particular countries where the companies are based.
Such agreements, in addition to the completion of the project's feasibility study, which is scheduled to be completed within the second quarter of this year, will help in the financing of the project, Hoefer said.
The public hearings for the project are scheduled to continue Friday in Fort Resolution.
