Vancouver, July 5, 2012 (ABN Newswire) - Avalon Rare Metals Inc. (TSE:AVL) (NYSE:AVL) is pleased to announce that it has bought out the 3% Calabras/Lutoda Net Smelter Return ("NSR") royalty on its Thor Lake property for a cash payment of CAD$2.0 million. The Thor Lake property (the "Property") encompasses the Company's flagship Nechalacho Rare Earth Elements Deposit.
The 3% Calabras/Lutoda NSR was one of two NSR royalties on the Property that the Company inherited when it acquired title to the Property in 2005. Avalon has the contractual right to buy out the remaining 2.5% royalty on the basis of a fixed formula, which currently approximates CAD$1.3 million and which will increase at a rate equal to the Canadian prime rate until that royalty is also bought out.
Don Bubar, Avalon's President and CEO commented, "Acquiring this royalty interest is an important step in the development of our Nechalacho Deposit. Our ability to move this project forward without the uncertainty of a royalty burden has long been part of our development model and we are pleased that we were able to conclude this agreement with the royalty holders on favourable terms."
Avalon Rare Metals Inc. is a mineral development company focused on rare metals deposits in Canada. Its flagship project, the 100%-owned Nechalacho Deposit, Thor Lake, NWT, is emerging as one of the largest undeveloped rare earth elements resources in the world. Its exceptional enrichment in the more valuable 'heavy' rare earth elements, which are key to enabling advances in green energy technology and other growing high-tech applications, is one of the few potential sources of these critical elements outside of China, currently the source of 95% of world supply. Avalon is well funded, has no debt and its work programs are progressing steadily. Social responsibility and environmental stewardship are corporate cornerstones.