Avalon Announces Progress on Product Marketing Initiatives and Provides Update on Development Activities on the Nechalacho REE Deposit, Thor Lake, Canada

Avalon Rare Metals(NYSE: AVL) is pleased to provide a progress report on its rare metal product marketing initiatives as well as project permitting, metallurgy and diamond drilling programs on the Nechalacho Rare Earth Elements deposit, Thor Lake, NWT, Canada. Product Marketing Avalon has now entered into non-binding Memorandums of Understanding with three Asian industrial companies seeking to participate in the Project by investing and /or providing technical expertise in exchange for obtaining off-take rights. MOU's are commonly used to initiate a formal due diligence process and frame the discussions between the parties. The business terms of each of the MOUs are not binding and have therefore not been announced. However, each MOU requires the Company to maintain the confidentiality of the identity of the counterparty and the business terms until the negotiation process is completed and a definitive agreement is signed. Pierre Neatby VP Sales and Marketing stated, "We are encouraged that these companies have already expressed confidence in the potential of the project by signing an MOU and initiating a formal due diligence process. While the recent unprecedented increase in rare earth prices has caused some concern about substitution risk, in many applications the potential substitutes are clearly inferior. We remain confident that market demand will resume its strong growth as new supply comes into the market and technological advancements develop new applications for these remarkable commodities."