Avalon raising $12.5 million for rare earths project

Avalon Rare Metals (AVL-T) is raising $12.5 million in a bought deal financing that will help with a prefeasibility study and exploration work for its Thor Lake rare earth element project near Yellowknife, N.W.T.

Avalon has entered into an agreement with a syndicate of underwriters led by CIBC, which have agreed to buy a combination of special warrants and flow through special warrants.

Special warrants will be issued at $2.30 a piece while the flow through special warrants will go for $3 apiece.

The underwriters have the option to buy up to $5 million more in special warrants.

Avalon expects the offer to close by about Sept. 17.

Avalon recently updated its resources estimate at the project.

The high grade Basal zone now has indicated resources of 4.4 million tonnes grading 1.97% total rare earth oxides (TREO) (and 25.4% heavy rare earth oxides HREO), using a cut-off grade of 1.6% TREO.

The central part of the Basal zone has an indicated resources of 2.186 million tonnes grading 2.14% TREO (20% HREO)

And inferred resources on the Upper and Basal zones total 64.2 million tonnes grading 1.96% TREO (16.8% HREO).
Avalon shares were up 21¢ today, or 9%, to $2.58 per share on a trading volume of 650,000 shares.