In addition, effective immediately, Solvay will provide Avalon with technical support for the further design optimization, engineering and commissioning of Avalon’s hydrometallurgical processing plant.
Avalon will ship a concentrate to La Rochelle containing 98.5% Rare Earth Oxide ("REO") and Solvay will return separated oxides of praseodymium (Pr), neodymium (Nd), europium (Eu), gadolinium (Gd), terbium (Tb), dysprosium (Dy), lutetium (Lu) and yttrium (Y) ranging in purity from 99.5% to 99.99%.
The Tolling Agreement also provides Solvay with the opportunity to purchase selected REO from Avalon. All rare earth products not purchased by Solvay will be sold by Avalon and delivered directly from the La Rochelle plant.
Don Bubar, Avalon’s President and CEO, said, "We are extremely pleased to have a highly experienced rare earth refiner like Solvay as a strategic partner. This Tolling Agreement greatly reduces the technical risk and costs associated with building, commissioning and operating a dedicated REE Refinery for the Nechalacho Project, making the whole project a less risky and more attractive investment opportunity.
In addition, this reduces the potential for delays in initial product deliveries as perceived by our customers, who know they can rely on Solvay to produce the quality they require in a timely, proven, and reliable way. Solvay and Avalon also share similar values for environmental and social responsibility, which furthers our goal of becoming a sustainable operator."
Avalon is continuing its feasibility study optimization work and will now integrate the Solvay Tolling Agreement into the project development model.
The decision to use Solvay’s facilities to refine the Company’s mixed rare earth concentrate makes the property optioned in Geismar, Louisiana for a Refinery, potentially available as an alternative location for the hydrometallurgical facility, originally contemplated for Pine Point, NWT.
Avalon’s next steps are primarily focused on producing an updated Technical Report incorporating the results of all the recent optimization work. Other goals for 2014 include completing land use permit applications, carrying out additional pilot plant trials of the new hydrometallurgical plant flowsheet needed to finalize detailed plant designs and engineering, securing commitments on off-take and arranging project financing.
Commencing December 31, 2014, Solvay will have certain termination rights until project financing is achieved.
