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SOMBA K'E/YELLOWKNIFE - The Yellowknife Chamber of Commerce luncheon served a rare dish in today's economic times at its recent business club luncheon: hope.

Scores of Northerners - from MP Dennis Bevington to Dene National Chief Bill Erasmus - crowded into a room at the Yellowknife Inn Friday, all to hear the words of Avalon Rare Metal Inc.'s vice-president Bill Mercer.

Yellowknife Chamber of Commerce president Jon Jaque, right, greeted Avalon vice-president Bill Mercer, left, with a gift from the North: an inukshuk. - Lauren McKeon/NNSL photo

He began with this reassuring piece of news: "We're not affected by the present market volatility."

Avalon started drill-testing at its 100 per cent-owned Thor Lake project, located 100 km southeast of Yellowknife, in 2007. The company plans to begin commercial production there in 2013.

"Our shares ... have gone up a little this week," Mercer told the crowd, saying prices were in the 60 to 70 cent range.

And while the mood of the presentation was casual, with elbows rested on crisp tablecloths and backs leaned into plush seats, the message was clear. In a time of mass mining lay-offs and lurching production, many have pinned their economic dreams on Avalon.

Bevington called the mine "the answer for a new economy" in the North. If done right, said Erasmus, Avalon's Thor Lake project offers the North a "chance to lead."

Certainly, Avalon is unique.

The Toronto-based company is the only one drilling what are called rare earths and metals - like indium, beryllium, lithium and tantalum - outside of China.

Demand for rare earth elements, which are critical components for high-strength magnets used in everything from flat screen TVs to hybrid cars, has catapulted, most recently with the rising green trend.

As Bevington puts it: "By 2013, we (could be) supplying Toyota cars with what they need to make them go."

"(Rare earth elements) are key to the green economy," added Mercer.

So key, some of them, like terbium, a heavy rare earth present at the Thor Lake site, are worth upwards of $500 US per kg. Mercer compared these types of rare earths to vitamins: a little bit is worth a lot of good.

Light rare earths, on the other hand, are kind of like carbs. There are more of them and they can be worth as little as US$10 per kg.

Either way, a recent resource estimate at the site showed a higher-than-expected tonnage and grade for certain heavy rare earths.

Mercer also told the crowd Avalon plans to use Northern services. At least one charter flight company, Arctic Sunwest, was there to hear the latest news on the project, which did not include announcing a permanent contract for any airline service.

Yet, while many contracts connected to Avalon are not cemented, there is, as many said, "great potential."

"Everyone is happy to see this kind of blip on the radar in Yellowknife," said Yellowknife Chamber of Commerce president Jon Jaque.