26 October 2016
AVALON MINERALS LTD SEPTEMBER 2016 QUARTERLY REPORT
Gold Portfolio, Scandinavia (Avalon earning 80%)
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Diamond drilling of 1,965.9m at Satulinmäki (7 holes) and Riukka (3 holes) gold prospects completed during September;
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Strong assay results returned on the first 4 diamond drill holes from Satulinmäki including:
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83m at 1.2 g/t gold from 137m in SMDD007,
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including 9m at 7.3 g/t from 147m
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7.0m at 1.24g/t gold from 9m and 10.0m at 1.13 g/t gold from 33m, in SMDD001
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42m at 0.9 g/t gold from 112m in SMDD002
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2m at 10.5 g/t gold from 7m in SMDD005
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Results define a significant gold system with both narrow high grade intervals and wide lower grade intervals, all within 150m of surface, and open in all directions;
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Visible gold has been noted in several samples, the highest individual assay was 45.6 g/t over a 1-metre sample in SMDD007 from 150-151m;
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Avalon (100%) is building a strong land position over areas considered to be prospective for gold in Finland.
Lithium Portfolio, Scandinavia (Avalon subsidiary Scandian Metals earning 80%)
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Diamond drilling at Kietyönmäki commenced in August, 2016;
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1,172m completed over 6 drill holes confirming a high grade spodumene bearing pegmatite dyke swarm;
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KMDD001 returned high grade lithium assays including 24.2m at 1.44% Li2Ofrom 17.9m downhole;
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Peak 1m interval assays within KMDD001 returned up to 2.5% Li2O over intervals 25-26m, 37-38m and 59-60m.
26 October 2016
Viscaria Copper Project, Sweden (Avalon - 100%)
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The Viscaria Copper Project Environmental and Social Impact Assessment (ESIA) process is progressing, and represents the critical path to final permitting;
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Work continues on increasing the scale of the Viscaria Copper Project.
Corporate Highlights
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A$1.7 million in cash at 30 September 2016;
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Placement of approximately $1.9M to new sophisticated investors and existing cornerstone shareholders completed during the quarter;
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Legal dispute with Hannans settled.
Exploration and Development Activities
In Finland Avalon, through subsidiary Scandian Metals Pty Ltd (Scandian), entered into an earn-in agreement with Canadian company Nortec Minerals Corp. over several approved Exploration Claims and one Exploration Reservation application in southern Finland. The Claims and Reservation are prospective for lithium and gold.
Gold Portfolio
Tammela Gold Opportunity (Avalon earning 80%)
The Nortec earn-in agreement includes two defined gold opportunities, Satulinmäki and Riukka, held within the claim areas. All historical drilling is shallow and has only tested to ~70m below surface. Historical assays from diamond drilling by the Finnish Geological Survey (GTK) included 22m @ 3.6 g/t Au from 50 metres (hole 391) at Satulinmäki.
Drilling by Avalon was undertaken during September with a total of seven diamond drill holes completed at Satulinmäki, with all holes intersecting altered and structurally complex zones coincident with the interpreted positions of gold lodes from historical drilling results. A further three diamond drill holes have also been drilled at Riukka.
Assay results from 4 of these holes (SMDD001, 002, 005 and 007) at Satulinmäki have been received with the remainder expected to be available to report in Q4, 2016.
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7.0m at 1.24g/t gold from 9m, 10.0m at 1.13 g/t gold from 33m, and 1.0m at 15.15g/t gold from 57m in SMDD001
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42m at 0.9 g/t gold from 112m in SMDD002
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2m at 10.5 g/t gold from 7m in SMDD005
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83m at 1.2 g/t gold from 137m in SMDD007, including 9m at 7.3 g/t from 147m
The results from Avalon's drilling, together with the historical drilling results of the Finnish Geological Survey, clearly show a large gold system of broad mineralised zones and sub-parallel narrow veins. The system is open in all directions, and has a length of at least 400m, a vertical extent of at least 150m, and ranges up to approximately 50m thick.
The combination of thick lower grades and narrow higher grades at Satulinmäki represents significant opportunities for follow-up drilling and consideration of development options.
A detailed geophysical Induced Polarisation ("IP") program is currently being planned and is expected to commence in November. Follow-up drilling is expected to commence in December.
At Riukka, located 4km to the south-east, Avalon has completed 3 diamond drill holes and these are currently being logged and sampled. Specific mineralised intervals have been preferentially sampled and results from these samples are expected within the next few weeks. The holes have intersected quartz veins down-dip from quartz vein hosted gold mineralised intervals drilled by the Finnish Geological Survey and containing up to 2m at 16.6 g/t gold. Assays are pending.
Other Gold Opportunities (Avalon 100%)
Based on Avalon's regional assessment of gold prospectivity in southern Finland several applications have been lodged for Exploration Reservations covering known small gold occurrences. These areas are held 100% by Avalon and will be explored systematically.
Lithium Portfolio
Tammela (Somero) Lithium Project (Scandian earning 80%)
The Nortec earn-in agreement area includes the Kietyönmäki lithium occurrence which was discovered by the Finnish Geological Survey (GTK) in the mid-1980's. Lithium mineralisation at Kietyönmäki is hosted in a spodumene-bearing pegmatite dyke swarm. The Kietyönmäki lithium pegmatite deposit was drilled by GTK during the period 1987 and 1988. Seventeen shallow diamond drill holes were completed to test down to 70m below surface across three traverses, including one traverse of very shallow holes to identify bedrock.
A total of six diamond drill holes have been drilled by Avalon during the quarter at Kietyönmäki and have confirmed a high grade spodumene bearing pegmatite dyke swarm.
Assay results received to date include:
These high grade results, which are consistent with our expectations, confirm that the Kietyönmäki Lithium Project has the potential to evolve into a significant lithium project.
Geological and assay results from all six diamond drill holes are to be interpreted and further drilling planned. The geological results from holes KMDD001 and KMDD006 suggest continuation of a thickened pegmatite dyke to the south-east and this trend is expected to be tested with future drilling. Further work is required to better understand the geology, however initial results are encouraging.
Kaustinen Lithium Project
Avalon, through Scandian, has been granted an Exploration Reservation covering 299 km2, in the Kaustinen area within the Central Ostrobothnia district, home to several known lithium pegmatites some of which are at an advanced stage of Pre-Feasibility Study and held by private Finnish company Keliber Oy.
Avalon has also applied for smaller Exploration Permit applications directly adjacent to 2 defined lithium deposits.
Seinäjoki Lithium Project
One Exploration Reservation has been granted to Scandian over an area of 206 km2 covering a documented lithium pegmatite occurrence, and at the southern end of the regional geological province that includes the Kaustinen district in the north. Reconnaissance exploration will now be undertaken in this area.