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Industry and Information Bulletins

Industry Bulletin: Mining Indaba and REE & Thorium Conference, Cape Town, South Africa

February 23, 2010

Avalon Rare Metals exhibited at the Mining Indaba conference in Cape Town, South Africa held February 1 to 4, 2010. Mining Indaba was attended by over 4,000 people with a strong presence of European, American and Asian financiers, investment bankers, analysts and other investment specialists.  Jack Lifton was one of the featured speakers in the opening Commodity Outlook session with a well-received presentation on the Outlook for Rare Metals. Avalon was one of just two exhibiting companies involved in the rare metals industry. The growing awareness of the importance of rare metals in green technology, coupled with Mr. Lifton's bullish outlook on demand growth for rare metals, resulted in considerable investor interest in the Company from the many European money managers present at the conference.

Immediately following Mining Indaba, Don Bubar attended a South African Institute of Mining and Metallurgy technical conference, also held in Cape Town, on Rare Earths and Thorium. South Africa hosts large resources of the thorium-LREE mineral monazite and there is renewed interest in this mineral for recovery of both rare earths and thorium. South Africa has limited hydrocarbon resources and is looking to develop both renewable energy resources and nuclear energy with thorium being considered as a potential nuclear fuel.

Most of southern Africa's monazite resources are found in heavy mineral sands deposits such as the giant Richards Bay titanium deposit. J. Selby of Richards Bay Minerals told the gathering that by-product recovery of monazite from these deposits remains technically-challenging and historical efforts to economically recover it as a by-product of titanium production were a failure. He expressed doubt that it would ever be feasible to recover monazite from these deposits. Zirconium, in the form of zircon, also occurs in these deposits and there were several excellent presentations on current research on the recovery of zirconium for use in "zircaloy", in turn used as cladding to contain nuclear fuel. Zirconium will also be a by-product of rare earth production from Avalon's Nechalacho deposit and some insights into possible processing alternatives were acquired.

Vince Agnello of Snowden Consultants provided an excellent summary of the state of the market for rare earth (neo) magnets highlighting a number of important new demand drivers for these magnets in renewable energy technology including wind, tidal power and run-of-river hydro power. He also highlighted the rapidly growing demand for these magnets in Asia for electric bicycles which are rapidly replacing traditional pedal bicycles with sales forecast to grow to 30 million per year in China alone, with a resultant estimated demand for 9,000 tonnes per annum of neo magnets.

Mr. Agnello also informed the audience that magnetic refrigeration, a new technology utilizing the heavy rare earth element gadolinium, is within one to two years of commercialization on a wide scale and a race is on amongst manufacturers to be the first to market with refrigeration systems using this new technology. Avalon's Nechalacho deposit will produce significant amounts of gadolinium, so the emergence of new demand for this previously little-used heavy rare earth, is encouraging news.

Most of the potential new rare earth production in southern Africa is from light rare earth ("LREE") dominant resources, with monazite being the most common LREE mineral. Heavy rare earth rich deposits appear to be as scarce in southern Africa as they are elsewhere in the world. One large alkaline intrusive complex called Pilansberg, was discussed as being prospective for heavy rare earths, but evidently the prospective area is now a game preserve and essentially off-limits to mineral developers.

If you have any comments or questions on this bulletin or the rare earths generally, please do not hesitate to post them on www.raremetalblog.com or feel free to contact the company directly at office@avalonraremetals.com.

About Avalon Rare Metals Inc.

Avalon Rare Metals Inc. (TSX:AVL) (OTCQX:AVARF) is a mineral exploration and development company focused on rare metals deposits in Canada. Its flagship project, the 100%-owned Nechalacho Deposit, Thor Lake, NWT, is emerging as one of the largest undeveloped rare earth elements resources in the world. Its exceptional enrichment in the more valuable 'heavy' rare earth elements, which are key to enabling advances in green energy technology and other growing high-tech applications, is one of the few potential sources of these critical elements outside of China, currently the source of 95% of world supply. Avalon is well funded, has no debt and its work programs are progressing steadily. Social responsibility and environmental stewardship are corporate cornerstones.