demand for.. Rare Metals Research Capital Rare Metals Conference, - - PowerPoint PPT Presentation

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…the way to play the surging demand for….. Rare Metals

Research Capital Rare Metals Conference, April 30, 2008

AVL:TSX

www.avalonventures.com

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Rare Metals Project Locations

Lithium

Tantalum-Cesium

Tin-Indium

Thor Lake

Rare Earths Tantalum Niobium Zirconium Beryllium Gallium Lithium Hafnium Thorium

All 100% owned

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Investment Highlights

Rare Metals key to many emerging technologies related to energy efficiency and a cleaner environment Growing popularity of hybrid and electric cars

Creating a surge in demand for Rare Earths (REE) & Lithium

Thor Lake Project a globally strategic REE asset

Very large size, high grade sub-zones Exceptional enrichment in Neodymium & Heavy REE

Already attracting interest from global players

Key milestones being achieved in 2008-2009 Well-financed, experienced management

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Rare Metals:

Key to materials science innovation

• Rare Earth Elements, Lithium,

Beryllium, Gallium, Indium, Tantalum, Zirconium, Hafnium

Creating new materials which are

smaller, lighter, stronger, faster

Renewable energy: solar power Energy efficiency: Hybrid and electric

cars, LED Lighting, batteries

Electronics: Flat screens, handhelds Aerospace: light weight alloys

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What are Rare Earth Elements? (“REE”)

Rare Earth Elements

AMALGAMET CANADA Marketing Agents Other rare metals

Light REE’s: La= Lanthanum Ce= Cerium Pr= Praseodymium Nd=Neodymium Sm= Samarium Heavy REE’s: Eu= Europium Gd= Gadolinium Tb=Terbium Dy= Dysprosium Ho= Holmium Er= Erbium Tm= Thulium Yb= Ytterbium Lu= Lutetium Y= Yttrium

Heavy Rare Earths

Neodymium, Dysprosium, Terbium and Europium in highest demand

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Key facts about Rare Earths

Widely dispersed, but rarely concentrated

Only found as a group, not found individually

In most deposits, light rare earths “LREE” are far more abundant than heavy rare earths “HREE”

LREE typically comprise 98-99% of resource

Consequently, Heavy rare earths far more valuable

US$740/kg for Terbium vs US$3.50/kg for Cerium

REE must be recovered as a group and sequentially separated

HREE cannot be selectively extracted

Key current application in super magnets (Nd, Dy, Tb)

Need for Nd + HREE rich deposits, which are rare

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Major Rare Earth Applications: Hybrid Cars

REE super magnets using Nd, Pr, Dy, Tb are key to the electric motor technology. Toyota’s global Hybrid sales forecast to grow to 1 million per year by 2011.

Toyota Prius 30kg (65lb) of REE

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National Post April 25, 2008 C$2.25/liter = US$ 7/gal !! Rising fuel costs will be the new big demand driver for hybrids

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China Dominates REE Production

Global REE Production by Region

• China produces over 95% of Global REE Supply
• Global REE market now in deficit
• Chinese demand will exceed Chinese supply by 2012
• New non-Chinese supply sources sought by Japan & U.S.

Source: USGS

Roskill 2007 supply/demand forecast

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RARE EARTH ELEMENT PRICES Source: Metal-Pages.com March 27, 2008

Prices are indicative, and basis FOB China 16.00 – 16.50 Phosphors, ceramics, lasers Yttrium Oxide 99.999% min 10.00 - 10.50 Magnets, superconductors Gadolinium Oxide 99%min 116 - 121 Magnets, lasers Dysprosium Oxide 99% min 720 - 740 Phosphors: green, magnets Terbium Oxide 99% min 465 - 485 TV colour phosphors: red Europium Oxide 99% min 4.25 – 4.75 Magnets, lighting, lasers Samarium Oxide 99% min 34.50 – 35.00 Magnets, lasers, glass Neodymium Oxide 99% min 33.80 – 34.30 Magnets, glass colourant Praseodymium Oxide 99% min 3.75 – 3.85 Catalyts, glass, polishing Cerium Oxide 99% min 7.50 – 8.00 Re-chargeable Batteries Lanthanum Oxide 99% min Price US$/kg Principal Uses Metal Oxide

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REE PRICE TRENDS

Source: Metal-Pages.com basis FOB China

40 80 120 2001 2004 2007 2008 Date Range $/Kg

Dysprosium

20 40 2001 2004 2007 2008 Date Range

Neodymium

$/Kg

Current Price: US$120/kg Current Price: US$35/kg

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THOR LAKE, NWT

A World Class Rare Metals resource whose time has arrived

“When first discovered in the 1800’s, Sudbury was a large sulphur deposit, enriched in a rare metal called nickel for which a large volume market did not emerge until materials science innovation created Stainless Steel . Similarly, Thor Lake was merely a geological curiosity in the 1970’s, until recent materials science innovation created Rare Earth magnets and their use in electric motors created value for the resource in the ground.”

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Thor Lake Project Location

Lutsel’ke

Proximity to Great Slave Lake provides access to railhead at Hay River by barge in summer and ice road in winter. Current access is fly-in.

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Thor Lake Mineral Tenure

Thor Lake Lease 3266 (Lot 1006) Lease 3265 (Lot 1005)

Five 21-year renewable mining leases covering 10,500 acres

Lease 3267 (Lot 1007)

Hearne Channel

Grace

Blachford Lake

Lease 3179 (Lot 1000) 1 2 3 kilometres

LAND STATUS MAP

Lease 3178 (Lot 1001)

R

• a

d

Lake Zone

T Zone

Lake

100% owned, subject to 5.5% NSR-type royalty interests

Acquired in 2005 for 2.5 million shares Previously explored in 1980’s by Highwood

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Thor

Ring

Den

Fred

Long

Megan Thorne Lake Lake

Lake Elbow Lake

Lake

Lake

Lake

Lake

T-Zone North T-Zone South S Zone R Zone 500 metres 1000

Previous Drilling

Trailer Camp

Cressy Lake

Lake Zone

Tent Camp & Core Thor Lake Syenite

Thor Lake Rare Metal Zones and resources

0.014 0.41 375,410,000 0.01 0.025 0.99 83,224,000 0.05 0.025 1.23 14,005,000 0.10 %Ta2O5 %TREO +Y2O3 Tonnes Cut-off %Y

Lake Zone REE-Ta Deposit 43-101 Inferred mineral resources Wardrop Eng., Jan. 07

TREO = Total Rare Earth Oxides Y2O3 = Yttrium oxide Ta2O5 = Tantalum oxide Beryllium

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2008 Phase 2 drilling program

• $5.0 million budget, 10,000 metres
• Target: define 10-30 MT hi-grade indicated

resource of +2%TREO and complete pre-feasibility study by February, 2009

• Metallurgical studies. Preliminary

Engineering, permitting

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Lake Zone 2008 Drilling Program

E-W Section line

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E-W Section Basal HREE Zone

1.48%/14m 19% HREO 2.19%/23m 13% HREO 2.58%/20m 19% HREO 1.8% /16m 31% HREO 1.17%/28m 14% HREO

%TREO / width metres %HREO = proportion of heavy RE oxides

Basal REE Zone: Flat-lying zone 150

• 200 metres deep.

Amenable to low-cost u/g mining by decline

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Fergusonite: a Neodymium and HREE mineral uniquely enriched at Thor Lake

0.70 4.40 0.70 4.10 1.20 9.80 1.80 14.3 1.60 10.4 15.6 1.70 4.40 0.30 29.0 Oxide % Lu Yb Tm Er Ho Dy Tb Gd Eu Sm Nd Pr Ce La Y REE tr tr tr .004 .005 0.03 0.02 0.17 0.12 0.80 12.0 4.3 49.1 33.2 0.1 Oxide % Lu Yb Tm Er Ho Dy Tb Gd Eu Sm Nd Pr Ce La Y REE

REE distribution in Thor Lake Fergusonite: Compared with a typical light rare earth ore mineral: Bastnaesite from Mountain Pass, CA Fergusonite is a rare yttrium-niobium oxide mineral containing unusually high proportions of the high value heavy REE plus neodymium A major mineral constituent of Lake Zone deposit Will produce a high value concentrate: est. $50,000/tonne No associated thorium = low radioactivity No current competing producers Valuable by-products: Tantalum and Niobium

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Fergusonite HREE mineralization: Abundant, coarse grained in Basal Zone

20µm

Zircon Fergusonite 200µm

DDH L07-55, 120-122m, 2.5% TREO, 0.65% HREO

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Global REE Deposit Comparison

Deposit Name Tonnes(T) or tons(t) (mm) Grade % TREO TPY TREO Production Comments Bayan Obo 600 t 5.00% (10% rec. = 0.5%) 46,000 LREE, Bastnaesite By-product of iron

• S. China Ionic clays

Very large 0.10% 7,000 HREE, environmental Issues (major) Sichuan, Mianning 17 T 3.00% 31,000 LREE, Bastnaesite

Deposit Name Tonnes(T) or tons(t) (mm) Grade % TREO TPY TREO Production Comments

Thor Lake 375 T 0.41% 4,000 to HREE + LREE, fergusonite Lake Zone 83.2 T 0.99% 5,000 (?) Allanite, high-grade 14 T 1.23% Sub-zones present

• Mtn. Pass, CA

20 t 9.30% 5,000 LREE, Bastnaesite

• Mt. Weld, Lynas

7.7 T 12.00% 10,000 LREE, monazite Nolan’s Bore 18.6 T 3.10% 10,000 LREE, apatite Alkane 35.7 T 0.75% 1,200 LREE, by-product Hoidas Lake (GWG) 1.52 T 2.80% 3,000 LREE, allanite, apatite

Main Chinese Producing Districts Potential New Non-Chinese Producers

Thor Lake is the only potential significant new non-Chinese producer of HREE

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2005 2006 2007 2008 2009 2010 2011 2012

2009 - 2010:

• Bulk sampling

program

• Feasibility

study

• Advance

strategic discussions 2010 - 2012:

• Permitting
• Mine development

2012: Production 2008-2009: Definition drilling Metallurgical studies Preliminary engineering Pre-feasibility study

Lake Zone Development Timeline

VALUE

2006 - 2007: Scoping study 2005: Acquisition

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Thor Lake REE Project Timelines to Prefeasibility Completion Phase II (winter) assays New resource est. Lake Zone Met drilling Flotation testing Hydromet testing Phase II (summer) assays Updated resource Prefeasibility complete

2008 2009 Q1 Q2 Q3 Q4 Q1 Q2

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Potential Strategic Partners: Visitors from Japan in 2007

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3 Year Price Chart

Source: TSX Group

Thor Lake Acquistion Scoping Study

Thor Lake Acquisition Scoping Study Completed $16.8 million Financing Completed

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CORPORATE INFORMATION

H.O. #1901-130 Adelaide St. W. Toronto, ON

April 30, 2008 TSX: AVL Shares Outstanding Fully Diluted Market Capitalization Recent Price Range 52 Week High / Low All-Time High Cash Resources

Insider Share Position

Major institutions

Balance Sheet Assets

NASD: AVVTF SEG 12g3-2(b) No.82-4427 64,649,748 73,257,248 $80 million (F.D. @ $1.10) $ 1.00 - $ 1.20 $ 2.34 - $ 0.90 $ 3.45 ( October, 1997 ) $ 14.0 million

4.0 million shares (6.0%)

CPP, TDAM, Front St, Hancock, Seamans

$ 25.3 million (29/02/08)

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REE Public Company Valuations

(1) Historical values not yet NI43-101 compliant (2) Based on cutoff % of 0.01% Y2O3 at a grade of 0.41% (3) cutoff % of 0.05% Y2O3 at a grade of 0.99%

Company Comparables (all values in Canadian dollars unless otherwise noted)

Company Price Market Capitalization Contained REO+Y ('000) Mkt Cap/

• Cont. tonne REO +Y

Local Currency

Arafura Resources Ltd. $0.75 $101.8 576.6 $176.63 Great Western Minerals Group $0.22 $24.7 42.1 $586.61 Rare Element Resources (1) $0.90 $21.4 163.4 $130.91 Lynas Corporation $1.33 $715.5 1,183.4 $604.63 Average $374.70 Avalon Ventures Ltd. (2) $1.09 $70.0 1,539.2 $45.47 Avalon Ventures Ltd. (3) $1.09 $70.0 823.9 $84.94

Lynas Corporation is the most advanced of the potential new producers and is 2-3 years ahead of Avalon on the path to production. Avalon should ultimately be rewarded with a similar market valuation.

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Management

Donald S. Bubar, P.Geo, President, CEO & Director Jim Andersen, C.A., C.P.A., V.P. Finance & CFO Ian M. London, P. Eng., MBA., V.P. Corporate Development Bill Mercer, Ph.D., P.Geo., V.P. Exploration Mary Quinn, Corporate Secretary Ajay Chopra, B.A., Manager, Public and Investor Relations Key Technical Consultants David Trueman, Ph.D., P.Geo, Rare Metals Geologist Chris Pedersen, P.Geo, Rare Metals Geologist SGS Lakefield Research, Metallurgical consultants Wardrop Engineering, Independent consultants Jacques Whitford Environmental, NWT Permitting

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A Green Mining Company

Rare metals key to energy efficiency and a cleaner environment Operating in an environmentally and socially responsible manner Proactive community engagement philosophy Reducing permitting risk and attracting a broad range of investors including ethically-oriented funds