Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Avalon Rare Metals doubles indicated resource at Basal Rare Earth Elements Zone

Avalon Rare Metals (TSX: AVL, OTCQX: AVARF) ("Avalon”) reported a 102% increase in the Indicated Mineral Resource estimate at the Basal Zone of the Nechalacho deposit.

The updated estimate was based on an additional 9,101 meters of drilling (44 holes) completed during the company’s summer drill campaign in 2009 which was designed to upgrade the inferred resource for the inclusion in a pre-feasibility study (“PFS”).  Nechalacho is a rare earth elements (NYSEMKT:REE) deposit.

The indicated resource in the Basal Zone now stands at 9 million tonnes grading 1.86 TREO (total rare earth oxides) and 23.1% HREO/TREO using a 1.6% TREO cut-off. (HREO/TREO refers to the proportion of heavy rare earth oxides as a percentage of the total rare earth oxide content of the rock.)

“This is double the tonnage of Indicated Mineral Resources totalling 4.4 million tonnes grading 1.97% TREO (25.4% HREO) defined in the southern part of the deposit and disclosed in August 2009,” Avalon noted. “This does not include the 2.2 million tonnes Indicated Resource defined earlier in the central part of the deposit, which may not form part of the development model to be used in the PFS.”

The drill results also made several other interesting points, including confirmation that the Basal Zone extends further south-west and down dip than previously known.  Avalon’s winter drill program, which is due to commence in the next few days, will include follow up drilling to test this area.

Avalon also reported that Nechalacho is now recognized as an “unusual example of a large, layered peralkaline intrusive complex with an extensive zone of hydrothermal replacement” which appears to have “upgraded” the primary REE mineralization.

“This significant refinement of the geological model explains the distribution of thicker, higher grade TREO and higher heavy rare earth portions of the Basal Zone and predicts potential for extensions to the south, where the deposit is wide open for expansion beneath barren cover rocks.”

 Avalon further noted that while drilling was focused on the more valuable heavy rare earth elements, the company had frequently intersected between one and three zones of neodymium rich REE mineralization, which “may be of economic importance”.  Avalon highlighted shallow zones in holes L09-178, L09-179 and L09-180 which assayed a total of 2.89% TREO over 20.06 metres, 2.75% TREO over 17 metres and 2.56% TREO over 23 metres respectively.

Neodymium is used in high strength permanent magnets with the heavy rare earths dysprosium and terbium sometimes added to the magnet to enhance its thermal properties.

Disclosure: The author holds no positions in the company