A new scoping study of
The updated study, prepared by consulting firm PRS Associates, is based on a greatly simplified dry-milling process designed by metallurgical consultant Les Heymann.
The study also contains new information provided by Avalon’s recently hired sales agent, Amalgamet Canada, and consultant Donald Hains on the marketability of the high-lithium feldspar product, and more attention is given to transportation and equipment alternatives.
The study recommends building a $14-million, 720-tonne-per day mill capable of producing, annually, 200,000 tonnes of high lithium feldspar product and 30,000 lbs. (13.6 tonnes) of byproduct tantalum oxide in concentrate.
Assuming a 6-year ramp-up to full production, the project’s after-tax internal rate of return is estimated at 31% on a 100% equity basis, and the net present value is $14 million, using a 10% discount rate.
However, the study recommends Avalon start with a $3-million demonstration plant capable of producing 50,000-80,000 tonnes of high lithium feldspar product annually. Toward this end, Avalon is seeking partners to help finance the demonstration plant, with the intention of starting construction this summer.
Currently, the company is processing a 5-tonne bulk sample collected last fall using the new dry-process flowsheet.
Amalgamet has already provided Avalon with an off-take guarantee for a minimum of 10,000 tonnes of high-lithium feldspar products per year.
Meanwhile, Avalon has entered into an option agreement with partners
The property covers a zoned, Proterozoic, mafic-ultramafic intrusion within the Nipigon plate structure, which is believed to be prospective for Norilsk-type deposits. Avalon has already completed an aeromagnetic survey over the property, which McVicar and BHP will follow with an airborne electromagnetic survey using the deep-penetrating MegaTEM system.
McVicar and BHP can earn an initial half-interest in the property by spending $1.5 million on exploration and development over four years. The optionees must also pay $30,000 cash and issue 35,000 McVicar shares upon signing the agreement, at which time they will become project operators.
The partners can gain an additional 20% by funding the project through to completion of a bankable feasibility study. Local prospectors retain a 2.5% net smelter return royalty, of which 1.5% can be bought back any time for $1.5 million.
Avalon has also acquired, through staking, an anorthosite property in Warren Twp., 100 km west of Timmins, Ont., near the town of Foleyet. Avalon’s consultants, led by Donald Hains, are preparing a prefeasibility study of this project.
Avalon has raised a bit of cash by privately placing 670,000 flow-through units priced at 15 each for total proceeds of $100,500. A unit consists of a flow-through share and a non-transferable warrant to buy another flow-through share for 20 within two years.
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