Avalon Rare Metal's (TSE:AVL) Nechalacho Project Feasibility Study on Track for Completion in Q2 2013

Toronto, Canada (ABN Newswire) - Avalon Rare Metals Inc. (TSE:AVL) (NYSE MKT:AVL) is pleased to provide a progress report on the Company's Feasibility Study and related work on the Nechalacho Rare Earth Elements Project at Thor Lake, NWT (the 'Project').

Feasibility Study

The Feasibility Study ('FS') for the Project, including the operations at Thor Lake and Pine Point, NWT and Geismar Louisiana remains on schedule for completion in Q2 2013. The following key elements of the FS have been completed:

Environmental Baseline work at Nechalacho and Pine Point;

Underground Mine plan and development schedule;
Tailings Facility;
Paste Backfill Plant;
Nechalacho Flotation Plant designs; and
Geismar Separation Plant designs.

Capital and Operating cost estimates are largely complete for those components of the Project where engineering design work is finished. Design criteria for the Pine Point Hydrometallurgical plant have been prepared and design work is now advancing on schedule.

Product Marketing

Avalon continues its efforts to secure product off-take agreements and in this regard, the Company is pleased to announce the signing of a Memorandum of Understanding (MOU) with an Asian company for the sale of its Enriched Zircon Concentrate ('EZC') product. The EZC contains most of the zirconium, tantalum, niobium recovered and approximately 15-20% of the rare earths. Samples of the EZC were initially sent to this prospective customer in August 2012 and successful processing tests led to the signing of this MOU in January 2013. The revenue from the EZC is expected to represent a significant percentage of the total revenue from the project. Negotiations for off-take agreements for the sale of separated rare earth oxides and carbonates are progressing.

Metallurgical Testwork

The Hydrometallurgical plant testwork program is virtually complete except for some minor impurity removal and kiln optimisation investigations. Mintek SA in Johannesburg, RSA is in the process of optimising final impurity removal processes ahead of completing a mini pilot plant campaign for the rare earth separation and refining operations. Process optimisation testwork for the flotation plant continues as opportunities to improve flotation performance are investigated. Various alternative reagent combinations will continue to be evaluated in an effort to reduce reagent consumption and enhance recoveries.

Definition Drilling and Resource Estimates

A brief definition drilling program is planned to commence on February 5th. The objective of this program is to complete additional in-fill drilling near the planned underground crusher location, within stopes designed to be mined in the first few years of mine life. The program is anticipated to be completed by mid-March, with an updated resource estimate expected by mid-June. This program will also provide additional sample material from the Basal Zone for on-going process optimization.

Sustainability, Aboriginal Engagement and Permitting

Preparation of the 2012 Sustainability Report is underway and scheduled for completion in Q2 2013. Avalon has contracted with an independent third party to provide an assessment of its sustainability performance, identify the most relevant sustainability issues and provide an assessment of its performance in these areas. Initial findings indicate that Avalon's Sustainability performance is strong relative to its peers.

An accommodation agreement has been negotiated with the Lutsel K'e Dene First Nation, which now awaits formal ratification from the community, while negotiations with the Yellowknives Dene First Nation are continuing.

The environmental assessment process is proceeding as anticipated following the August 2012 Technical Sessions held in Yellowknife. Updated technical reports were submitted on November 30, 2012 and Avalon provided responses to several items in a submission to the Mackenzie Valley Environmental Impact Review Board ('MVEIRB') on December 19, 2012. Public hearings are scheduled for Yellowknife and Fort Resolution between February 18-26, 2013 and closure of MVEIRB's public record is scheduled for March 21, 2013.

The qualified person for the purpose of this news release is Donald Bubar, P.Geo. (Ont), President.

About Avalon Rare Metals Inc.:

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.

Source:

Avalon Rare Metals Inc.

Contact:

Avalon Rare Metals Inc.
Communications and Investor Relations
Ron Malashewski, Manager
T: +1-416-364-4938
F: +1-416-364-5162
E: malashewski@avalonraremetals.com
WWW: www.avalonraremetals.com