Separation Rapids pre-feasibility study to proceed
Avalon Ventures Ltd AVL
Shares issued 16,762,584 Apr 6 close $1.80
Tue 7 Apr 98 News Release
Mr Donald Bubar reports
Avalon Ventures has decided to commission a pre-feasibility study to
outline a development plan for the Separation Rapids rare metals project,
which is 60km north of Kenora, Ontario. This decision is based on the
following significant new developments:
Completion of a positive market study which concludes that petalite markets
have enormous growth potential and that the project can generate initial
annual netbacks of at least US$9.6 million (C$13.5 million);
Successful development by Lakefield Research of a selective flotation
process which permits high levels of recovery of the petalite and Rb-K
feldspar mineralization;
Completion of a second phase drilling program which confirms excellent
internal continuity in the Big Whopper petalite deposit and which has
identified several promising new zones of tantalum mineralization elsewhere
on the property.
Market Study
The market study was prepared by G.H.K. Pearse of Equapolar Resource
Consultants, who has over 35 years of experience in the industrial minerals
business. The study focused on assessing market size, location, freight
rates and pricing in order to estimate minimum initial sales volumes and
revenues for lithium minerals (petalite), rubidium-potassium feldspar and
tantalum, the principal commodities occurring in the near-surface portion
of the Big Whopper deposit. Both the petalite and feldspar are used in the
glass and ceramics industries which, in North America, are concentrated in
the northeastern US; a market (along with Europe) in which Separation
Rapids is well situated to compete. The lithium minerals market is rapidly
growing and has an estimated size potential of 500,000 tonnes of annual
petalite consumption in the US alone, and 1.5 million tonnes worldwide.
Tantalum is currently in short supply, and with continued strong growth in
demand anticipated from the electronics industry, where it is used to make
capacitors, the study concludes that virtually any new tantalum production
will find a market. Assuming an initial mining rate of 200,000 tonnes per
year, the study estimated the following minimum initial annual sales
volumes and netbacks:
Volume Netback
Product (tonnes) (US$)
Petalite 58,000 $5.9 million
Feldspar 65,000 $2.7 million
Tantalum 10 $1.0 million
Total Netback: $9.6 million
The study accounts for freight rates and uses suitable discounts to quoted
prices to simulate a competitive sales environment. A conservative
calculation of market penetration is used and the study makes no allowance
for market growth. Given these factors, Equapolar concludes that there is a
high probability that considerably higher volumes and netbacks can
ultimately be achieved.
Tantalum sales volumes represent the amount of tantalum recoverable solely
as a by-product of petalite and feldspar production from the Big Whopper
(which averages approximately 0.007% Ta2O5) and makes no allowance for
potential future production from separate tantalum-rich zones located
elsewhere on the property. The study did not assess the markets for other
potential products, such as lithium-rubidium-micas, cesium and silica, due
to insufficient data on reserves for these commodities, at this time.
Metallurgical Study
S. Bulatovic, consulting metallurgist with Lakefield Research, has reported
making substantial progress toward developing a process to recover the
petalite and feldspar mineralization in the Big Whopper pegmatite. In
particular, a selective flotation process has been developed resulting in
92% recovery of the petalite in the rougher concentrate. Further testwork
will focus on optimizing of this process. It is also reported that high
rates of recovery of the feldspar can also be achieved by selective
flotation, and that the accessory tantalum mineralization will be easily
recoverable by applying a gravity separation process to the tails. This
initial study is expected to be completed in May, at which time a second
phase of testwork will be commenced on a larger bulk sample in order to
produce marketable grade concentrates. A detailed mineralogical study will
also be carried out in May and June.
Definition Drilling Program
The phase 2 drilling program was completed in early March, with an
additional 3,829 metres drilled in 27 holes. Assays for all 27 holes have
now been received and are compiled in the accompanying table. Of the 27
holes drilled in the phase 2 program, 20 were designed as in-fill holes on
25 metre spacing to better define the near-surface, open-pittable resource
in the Big Whopper petalite deposit, to the 75 metre level. A global
resource estimated for the deposit following the phase 1 program, totalled
7,081,700 tonnes grading 1.285% Li2O and 0.346% Rb2O. The in-fill holes
confirmed that the deposit has excellent internal continuity and remarkably
consistent grades. With the exception of two holes (S 98-33,53), which
intersected a feldspar-rich sub-zone, the assays ranged from 1.278 to
1.617% Li2O, 0.310 to 0.439% Rb2O and 0.004 to 0.009% Ta2O5 over true
widths of 15 to 67 metres. These grades are consistent with visual
estimates of petalite and feldspar contents averaging 30-40% respectively.
Two deeper exploration holes on sections 4+60W and 5+00W confirm that the
deposit extends to depths of at least 275 metres (where it remains open)
with little change in the character or thickness of the mineralized zone. A
new calculation of the increased resource for the deposit will be prepared
in April, establishing the Big Whopper as one of the two largest petalite
pegmatite deposits in the world.
Tantalum Exploration
The phase 2 program also included five exploration holes designed to look
for new zones of tantalum mineralization. These holes were drilled on the
eastern and western extensions of the Big Whopper system and on a
newly-outlined dyke enriched in the lithium-rubidium mineral lepidolite
that is immediately northeast of the Big Whopper. This work was successful
in identifying some of the highest grade tantalum mineralization found to
date on the Separation Rapids property and confirmed that these zones tend
to be associated with albite-rich pegmatite dykes peripheral to the Big
Whopper Petalite deposit. Hole S-98-49 intersected a narrow dyke assaying
0.164% Ta2O5 on the little-explored western part of the property, and hole
S-98-55 intersected a 2.0 metre wide dyke averaging 0.035% Ta2O5 on the
eastern extension of the Big Whopper system. Numerous similar dykes mapped
elsewhere on the property have yet to be evaluated for their tantalum
potential, and a follow-up exploration program is scheduled to begin in
May. The Lepidolite dyke also shows enrichment in tantalum relative to the
Big Whopper, averaging 0.011% Ta2O5 across a 15 metre true width along with
0.728% Rb2O and 1.662% Li2O.
The company expects to begin the pre-feasibility study in May as soon as a
consulting engineering firm has been contracted to do the work. In the
meantime, the company has commenced a baseline environmental study on the
property under the supervision of Knight-Piesold, Consulting Engineers of
North Bay, Ontario.
Management is pleased with the progress achieved to date at Separation
Rapids. The project has been advanced from a raw prospect to the
pre-feasibility stage in less than 12 months, and confidence in the
economic viability of the project continues to increase as each new study
is completed.
Big Whopper Definition Holes
Interval Length Li2O Rb2O Cs2O Ta2O5
m m % % % %
Hole S98-31
70.35- 94.15 23.80 1.447 .374 .019 .007
S98-32
23.75- 51.20 27.45 1.594 .439 .012 .007
S98-33
94.15-130.50 36.35 0.666 .287 .020 .004
S98-34
43.05- 87.50 44.45 1.396 .326 .008 .005
S98-35
14.30- 50.70 36.40 1.362 .362 .016 .004
S98-36
78.45-147.00 68.55 1.401 .400 .032 .006
S98-37
23.05-101.62 78.57 1.335 .387 .029 .007
S98-38
7.50- 62.82 55.32 1.430 .395 .032 .009
S98-39
59.70-140.10 80.40 1.392 .332 .012 .007
S98-40
12.65-104.00 91.35 1.435 .327 .020 .007
S98-41
1.80- 62.30 60.50 1.541 .309 .005 .007
S98-42
99.70-144.90 45.20 1.416 .310 .007 .006
S98-43
11.80- 94.50 82.70 1.497 .328 .017 .006
S98-44
0.80- 55.30 54.50 1.376 .339 .008 .005
S98-45
39.45- 45.60 6.15 1.424 .453 .099 .006
And
109.30-139.30 30.00 1.452 .356 .008 .006
S98-46
64.40- 86.20 21.80 1.617 .387 .009 .006
S98-47
3.40- 45.11 41.7 1.278 .390 .021 .007
S98-51
71.35- 89.55 18.20 1.086 .354 .032 .006
And
112.74-164.77 52.03 1.374 .340 .020 .007
S98-52
60.80-169.53 108.73 1.447 .374 .024 .007
S98-53
94.65-143.00 48.35 0.809 .346 .014 .004
Big Whopper Deep Holes
S98-54
172.50-227.00 54.50 1.544 .463 .024 .008
S98-57
207.70-294.00 86.30 1.601 .343 .013 .008
Lepidolite Dyke
S98-56
72.60-120.00 47.40 1.662 .728 .013 .011
Inc
72.60- 94.40 21.8 1.555 .885 .019 .014
Eastern Extension
S98-55
112.35-116.40 4.05 0.973 .401 .194 .035
And
171.23-171.57 0.34 0.252 .234 .375 .046
Western Extension
S98-48 No significant values
S98-49
68.00- 68.25 0.25 0.044 .059 .034 .164
And
75.00- 76.40 1.40 1.025 .377 .005 .008
S98-50 No significant values
Li2O = lithium oxide,
Rb2O = rubidium oxide,
Ta2O5 = tantalum pentoxide,
Cs2O = cesium oxide
Assays were performed by XRAL Laboratories, Don Mills, Ontario. Lithium and
tantalum were determined by ICP-MS. Cesium and rubidium were determined by
AA; check assays will be performed on a systematic basis by a third party
laboratory. Note that pure petalite contains 4.2% Li2O on average. |
