Avalon Rare Metals Inc. – the company seeking to develop rare earth mining at Thor Lake, about 100 km southeast of Yellowknife – has taken another step forward towards production.
On Nov. 5, Bernard Valcourt, the federal minister of Aboriginal Affairs and Northern Development Canada, approved the environmental assessment recommendations by the Mackenzie Valley Environmental Impact Review Board.
“The EA is seen as a big risk factor with investors,” Avalon president and CEO Don Bubar told The Hub. “That uncertainty has now been removed.”
According to Bubar, the company is still seeking investors, as well as developing agreements with end-users that he hopes can then be leveraged into greater investor confidence.
Rare earth metals are ubiquitous in many new technologies from magnets that power turbines to the touch screens on smartphones, but China currently controls the world’s supply of the minerals.
While there is an exploration camp on the shores of Thor Lake, the Nechalacho Rare Earth Elements Project needs to raise funds before moving on with production.
“Raising the capital isn’t easy right now. It’s still a pretty difficult market environment for resource companies,” said Bubar. “We’re affected by the overall market climate, but the prospects are pretty good because the fundamentals for this business remain pretty strong. It’s always been about getting an alternative supply of heavy rare earths to emerge from outside of China, and that hasn’t happened yet.”
While the Nechalacho component of the project continues, Bubar said there is no word yet on the location of the hydrometallurgical plant – originally planned for the abandoned Pine Point mine site between Hay River and Fort Resolution. In August, Avalon announced it is considering changing the location of the plant as a result of technical requirements, including the shipment of reagents and the lack of adequate power at the site.
“We’re still doing the technical work we need to get completed to finally reach a decision on that,” said Bubar. “We’re thinking we should wind up on that around the end of the year and we should be able to say more about it in the new year.”
Despite the uncertainty, Wally Schumann, president of the Hay River Metis Council, said he is still hopeful the plant would remain in the South Slave.
The GNWT, aboriginal groups and Avalon can hopefully find a way to make it work in Pine Point, he said. “Those estimated 65 jobs are very important to our region and probably more than we would get out of decentralization.”
Some proposed alternatives include building the plant – one step of the processing system for rare earth – in northern Saskatchewan, but Schumann argued that moving that part of the process out of the North would be a mistake.
“It means jobs and economic development for the South Slave,” he said. “We don’t want to see the hydromet plant walk out of the NWT.”
— Sarah Ladik