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Mining project eyes Hay River for new plant

Paul Bickford
Northern News Services
Published Thursday, March 26, 2009

HAY RIVER - An opportunity in the mining sector was presented to Hay River this week.

A delegation from Avalon Rare Metals Inc. was in town to talk about the possibility of locating a processing plant in Hay River for rare earth elements which may be mined at Thor Lake, about 100 km southeast of Yellowknife.

NNSL Photo/Graphic

Hay River Chamber of Commerce president Leah Miltenberger holds a core sample from the Thor Lake property, while Bill Mercer, vice-president of exploration with Avalon Rare Metals Inc., holds magnets enhanced with rare earth elements during a recent visit to Hay River. - Paul Bickford/NNSL photo

The delegation met with the business community and local politicians and toured companies during the March 23-25 visit.

Don Bubar, president and CEO of Avalon Rare Metals, said the company is seeking a site for a plant to separate the rare earth elements.

Bubar was not part of the delegation to Hay River, but said in a telephone interview from Toronto that Hay River and Yellowknife are possible NWT sites for the processing plant, although nothing has been decided.

If those two communities are not suitable, the plant might be located outside the NWT.

"Obviously, we want to see if we can make it work for the Northwest Territories," said Bubar, who said a processing plant would not be needed for at least four or five years.

A community for the processing, which would follow initial milling at the mine site, requires available labour, sufficient electricity and a transportation infrastructure, he said, adding Hay River meets those requirements.

Bubar said the overall project is at the point of going into a prefeasibility study.

The Thor Lake property contains many rare earth elements, such as terbium neodymium and europium.

The delegation to Hay River consisted of Bill Mercer, the company's vice-president of exploration and executive officer in charge of the Thor Lake project, and David Connelly, a strategic adviser with the company.

Mercer said a processing plant could employ between 20 to 50 people.

Aside from a few engineers with specialized skills, he said local workers could be trained to fill most of the jobs.

"The obvious thing is the size of economic activity," he added. "That leads to spin-off benefits."

Mercer said transportation is going to be a big factor in determining where the processing plant will be located.

"Obviously, the rail situation in Hay River has a big influence," he said.

Mercer said rare earth elements are an important part of the green revolution and can be used for many applications – solar power, wind turbines, electric batteries, digital cameras, cell phone, iPods, hybrid and electric cars, and much more.

One of the largest uses of rare earth elements is to increase the power of magnets. That, for instance, allows wind turbines to produce more electricity.

"There are no substitutes for the rare earths," Mercer said, adding virtually all rare earth elements now come from China.

Leah Miltenberger, president of the Hay River Chamber of Commerce, was pleased with what she heard from the company at a chamber luncheon on March 24.

"I think it has great potential for Hay River," Miltenberger said of the possibility of a processing plant in the community. The visit was arranged after the company was contacted by community leaders and businesspeople.

Back in the late 1990s the Thor Lake project was immersed in controversy as aboriginal groups and tourism operators protested Highwood Resources' application to mine a large deposit of beryllium located in a portion of the project's holdings.

Mercer said Avalon does not plan to exploit the beryllium deposit and would be unable to do so under the company's current development application, as previously reported in News/North.

If Avalon chose to expand to mine beryllium in the future, it would have to go back through the regulatory process, said Mercer.