This story just keeps getting better!NEWS RELEASE
November 3, 1999
Avalon Ventures Ltd.
Shares Outstanding 20,276,731
Working Capital $0.5 Million
SEC 12g3-2(b): 82-4427
Symbol AVL:VSE
MAJOR BOOST IN PROFITABILITY OF AVALON'S BIG WHOPPER PETALITE DEPOSIT
Avalon Ventures Ltd. (the "Company") is pleased to announce the results of an updated pre-feasibility study of
the 100% owned Big Whopper petalite deposit, located near Kenora, Ontario. The new analysis was prepared
by independent engineering consultant, Micon International Limited ("Micon"), to evaluate the impact of the
improvements achieved recently by Lakefield Research Ltd. in the recovery of petalite, on the profitability of the
deposit.
The improved recoveries in both the petalite and feldspar products have had a substantial positive impact on
the project economics. In particular, the anticipated market demand for the Company's petalite can now be met
by processing less ore and all the petalite produced can be marketed as a high-grade product averaging 4.41%
Li2O and <0.03% Fe2O3. Micon's new DCF analysis of the project, done on a pre-tax basis, now yields an
attractive Rate of Return of 39.5% and a Net Present Value of $53.5 million at an 8% discount rate, assuming
financing is done on a 75:25 debt/equity ratio. The payback period in this scenario is 3.2 years.
The current development model contemplates an initial production rate of 90,000 tonnes per year ("tpy"), which
increases by 20,000 tpy each year to 170,000 tpy in year 5, and remaining constant thereafter. Petalite
production begins at roughly 17,000 tpy increasing to over 32,000 tpy in year 5, which correlates closely with
initial sales volumes estimates provided by Hains Technology Associates. The smaller, more efficient plant
design resulted in a 30% reduction in the capital cost estimate to $29.8 million.
The updated pre-feasibility study of the Big Whopper petalite deposit confirms the economic viability of the
project and its potential for producing a high rate of return on invested capital. Management believes there is
still considerable scope for further enhancing revenues through further process optimization and new market
development. Research work to develop additional markets for the mica and feldspar products, and other
potential by-products of petalite production, is continuing. The bulk sampling program and full feasibility study
are now scheduled to begin this winter.
Avalon Ventures Ltd. is a Canadian junior mineral exploration and development company focussed on the
"Metals of the Future", including the high-technology commodities lithium, tantalum, cesium and rubidium. For
further information contact Donald S. Bubar, at (416) 364-4938.
ON BEHALF OF THE BOARD
"Donald S. Bubar"
Donald S. Bubar, President
*No stock exchange has either approved or disapproved the information contained herein* |
