Hole L08-92 contained anarrower but much richer interval of Basal Zone

Tag : lutetium metalHole L08-98 was located the furthest south of any of the holesdrilled to that date in the deposit, extending the known resourceinto this area and implying that the Basal Zone remains open to thesouth beyond the previously interpreted limits of the Lake Zonedeposit and appears to be wider in this area. As note that in theCompany's news release dated June 25, 2008, drill hole L08-89 hadsimilarly high values and was the furthest west of any drill holesto date (older drill holes in the same area were too shallow toreach the economically-important Basal Zone). This area to thesouth has been tested with five additional drill holes over thepast few weeks (assays pending) and further drilling is planned tobetter define this new area high-grade REE mineralization.

Individual values for some of the high demand HREE in the BasalZone intersection in Hole L08-92, quoted above, were 276 ppmterbium (Tb) oxide, 222 ppm europium (Eu) oxide and 1461 ppmdysprosium (Dy) oxide over 2.80 metres (Table 3, 100ppm equals 0.1kg/t). Recent bid prices for these oxides as reported for July 29,2008 by Metal-Pages.com on an FOB China basis as: US$720/kg Tb,US$470/kg Eu and US$113/kg Dy compared to just US$4.70/kg for themore abundant Light REE cerium. These elements are in short supplyyet are vital to many current applications in electronics (colourphosphors) and hybrid cars (high strength magnets). Rapidly risingfuel prices are creating soaring demand for more fuel efficientcars (especially hybrids such as the Toyota Prius) which isestimated to contain an aggregate of 30kg of rare earth elements,including light rare earths used in the rechargeable battery andcatalytic converter. The same intercept had an analysis of 7411 ppmlanthanum oxide, which Metal-Pages reports a bid price of $8.90/kgand 8579 ppm neodymium oxide, a light rare earth element also inhigh demand for magnet applications, that is currently quoted atUS$30/kg on a bid FOB China basis.

The Company has contracted with Wardrop Engineering to produce anew 43-101 compliant resource estimate for the deposit based on allthe drilling completed since last summer, up to and including, holeL08-98. This new resource estimate is expected to be ready by earlySeptember.

Meanwhile, drilling on the southern part of the deposit resumed onJune 22, 2008 after a brief hiatus for spring break-up and sincethen, 13 more holes have been completed including the 5 mentionedabove). The current program will include in-fill holes to increasecertainty in the resource, with the objective of defining indicatedresources, and a number of step-out holes to test for extensions tothe high grade mineralization in the southern and eastern parts ofthe Basal Zone and map the limits of the deposit.

Metallurgical testwork program update

As reported previously, a detailed drilling program involving 11holes totalling 2277 metres was undertaken in May, for the primarypurpose of collecting a 1600 kg bulk sample for metallurgicaltestwork. Processing of this sample commenced recently, andinvolves mineral separation studies, followed by flotation tests,so as to produce a saleable rare earth element rich mineralconcentrate. This work will be followed by hydrometallurgicaltesting for recovery of individual rare earth element oxides. Thefull metallurgical test program is expected to take about 5 monthsto complete and is being conducted by SGS Lakefield Research.

The metallurgical testing was preceded by QEMSCAN microprobe andconventional mineralogical studies of all the ore types present,focusing on the Basal Zone with the higher HREE values. This workis providing valuable information on the mineral species present,any interlocking relationships, and grain sizes, which are criticalfor the subsequent flotation testing.

The principal HREE bearing mineral phases in the Basal Zone havebeen confirmed as fergusonite, an yttrium, niobium, tantalum oxidemineral and zircon, a zirconium oxide mineral. Consequently, thiszone also contains high levels of tantalum and niobium along withzirconium in zircon, all representing potential valuable by-productcredits. For example, the 2.8 m intercept of Basal Zone in L0-92averaged 15,351 ppm niobium oxide and 1390 ppm tantalum oxide,along with 67,550 ppm zirconium oxide and 109 ppm gallium oxide(Table 4).

A rigorous QA/QC program was implemented for all of the programsamples to ensure high quality data. Analytical standards wereprepared from crushed rejects of historical Lake Zone drill coresamples, then analysed at five separate laboratories to determinean average value. These standards were then routinely inserted intothe sample batches to monitor analytical data. All drill core wassplit on site, sampled in 2m intervals and shipped to AcmeLaboratories facility in Yellowknife for sample preparation. Acmethen shipped pulverized splits from all the samples to itslaboratory in Vancouver, BC. Duplicates and other check samples arebeing analysed at ALS Chemex Laboratories, Vancouver, BC.

All samples are being analysed at both laboratories by lithiummetaborate/tetraborate fusion and dilute nitric acid digestion,followed by whole rock and 45 element multielement ICP analysis.Details of the factors used to calculate rare earth oxides areposted on the Company website along with complete analytical data.

Drilling operations were performed by Peak Drilling Ltd. ofCourtenay B.C. under the supervision of J.C. Pedersen, P.Geo.,Senior Geologist. The Company's Vice-President, Exploration, Dr.William Mercer, Ph.D., P.Geo. provided overall direction on theproject.

Full analytical details of all intervals for all REE and other raremetals received to date are posted on the Company's website alongwith a drill hole location plan and related cross-sections at http://www.avalonventures.com/projects/rare/thor_lake .

About Avalon Ventures Ltd.

Avalon Ventures Ltd. is a Canadian junior mineral exploration anddevelopment company, with a primary focus on rare metals andminerals with high technology and environmentally-beneficialapplications. Avalon currently holds a portfolio of five suchprojects, including three that are at, or close to, the feasibilitystage. Shares Outstanding: 64,649,748. Cash resources:approximately $11.5 million.

To find out more about Avalon Ventures Ltd., please visit ourwebsite at www.avalonventures.com . This news release is available on the Company's official on-lineinvestor relations site for investor commentary, feedback andquestions. Investors are invited to visit the "Avalon Ventures" IRHub at http://www.agoracom.com/ir/avalon . In addition, investors are invited to e-mail their questions andcorrespondence to AVL@agoracom.com or phone Don Bubar, P.Geo. President, at 416-364-4938. Mr. Bubarand Dr. Mercer are the Qualified Persons responsible for thetechnical content of this news release.

This news release contains forward-looking information. Thisforward-looking information includes, or may be based upon,estimates, forecasts, and statements as to management'sexpectations with respect to, among other things, the size andquality of the Company's mineral resources, progress in developmentof mineral properties, demand and market outlook for metals andfuture metal prices. Forward-looking information is based on theopinions and estimates of management at the date the information isgiven, and is subject to a variety of risks and uncertainties andother factors that could cause actual events or results to differmaterially from those projected in the forward-looking information.These factors include the inherent risks involved in theexploration and development of mineral properties, uncertaintieswith respect to the receipt or timing of required permits andregulatory approvals, the uncertainties involved in interpretingdrilling results and other geological data, fluctuating metalprices, the possibility of project cost overruns or unanticipatedcosts and expenses, uncertainties relating to the availability andcosts of financing needed in the future and other factors. Theforward-looking information contained herein is given as of thedate hereof and the Company assumes no responsibility to update orrevise such information to reflect new events or circumstances,except as required by law.