Avalon To Proceed with Pre-feasibility Study on the Separation Rapids Rare Metals Project.

TORONTO--(BUSINESS WIRE)--April 7, 1998--Avalon Ventures Ltd. (the "Company") is pleased to announce the decision by management to commission a pre-feasibility study to outline a development plan for the Separation Rapids Rare Metals project, which is located 60 km north of Kenora, Ontario. This decision is based on the following significant new developments:

1) Completion of a positive market study which concludes that

petalite markets have enormous growth potential and that the

project can generate initial annual netbacks of at least US$9.6

million (CDN$13.5 million);

2) Successful development by Lakefield Research Limited, of a

selective flotation process which permits high levels of recovery

of the petalite and Rb-K feldspar mineralization;

3) Completion of a second phase drilling program which confirms

excellent internal continuity in the Big Whopper petalite deposit

and which has identified several promising new zones of tantalum 

mineralization elsewhere on the property.

Market Study.

The market study was prepared by Mr. G.H.K. Pearse, P.Eng., of Equapolar Resource Consultants, who has over 35 years' experience in the industrial minerals business. The study focussed on assessing market size, location, freight rates and pricing in order to estimate minimum initial sales volumes and revenues for lithium minerals (petalite), rubidium-potassium feldspar and tantalum, the principal commodities occurring in the near-surface portion of the Big Whopper deposit. Both the petalite and feldspar are utilized in the glass and ceramics industries which, in North America, are concentrated in the northeastern United States; a market (along with Europe) in which Separation Rapids is well situated to compete. The lithium minerals market is rapidly growing and has an estimated size potential of 500,000 tonnes of annual petalite consumption in the United States alone, and some 1.5 million tonnes worldwide. Tantalum is currently in short supply, and with continued strong growth in demand anticipated from the electronics industry, where it is used to make capacitors, the study concludes that virtually any new tantalum production will find a market. Assuming an initial mining rate of 200,000 tonnes per year, the study estimated the following minimum initial annual sales volumes and netbacks:

Volume Netback 

Product (tonnes) ($US)

Petalite 58,000 $5.9 million

Feldspar 65,000 $2.7 million

Tantalum 10 $1.0 million

Total Netback: $US 9.6 million

The study accounts for freight rates and uses suitable discounts to quoted prices to simulate a competitive sales environment. A conservative calculation of market penetration is used and the study makes no allowance for market growth. Given these factors, Equapolar concludes that there is a high probability that considerably higher volumes and netbacks can ultimately be achieved.

Tantalum sales volumes represent the amount of tantalum recoverable solely as a by-product of petalite and feldspar production from the Big Whopper (which averages approximately 0.007% Ta2O5) and makes no allowance for potential future production from separate tantalum-rich zones located elsewhere on the property. The study did not assess the markets for other potential products, such as lithium-rubidium-micas, cesium and silica, due to insufficient data on reserves for these commodities, at this time. The Executive Summary from the Market Study will be posted on the Company's website at http://www.avalonventures.com.

Metallurgical Study.

Mr. S. Bulatovic, P.Eng., Consulting Metallurgist with Lakefield Research Limited, has reported making substantial progress toward developing a process to recover the petalite and feldspar mineralization in the Big Whopper pegmatite. In particular, a selective flotation process has been developed resulting in 92% recovery of the petalite in the rougher concentrate. Further testwork will focus on optimizing of this process. It is also reported that high rates of recovery of the feldspar can also be achieved by selective flotation, and that the accessory tantalum mineralization will be easily recoverable by applying a gravity separation process to the tails. This initial study is expected to be completed in May, at which time a second phase of testwork will be initiated on a larger bulk sample in order to produce marketable grade concentrates. A detailed mineralogical study will also be carried out in May and June.

Definition Drilling Program.

The Phase 2 drilling program was completed in early March, with an additional 3,829 metres drilled in 27 holes. Assays for all 27 holes have now been received and are compiled in the accompanying table. Of the 27 holes drilled in the Phase 2 program, 20 were designed as in-fill holes on 25 metre spacing to better define the near-surface, open-pittable resource in the Big Whopper petalite deposit, to the 75 metre level. A "global" resource estimated for the deposit following the Phase 1 program, totalled 7,081,700 tonnes grading 1.285% Li2O and 0.346% Rb2O. The in-fill holes confirmed that the deposit has excellent internal continuity and remarkably consistent grades. With the exception of two holes (S 98-33,53), which intersected a feldspar-rich sub-zone, the assays ranged from 1.278 to 1.617% Li2O, 0.310 to 0.439% Rb2O and 0.004 to 0.009% Ta2O5 over true widths of 15 to 67 metres. These grades are consistent with visual estimates of petalite and feldspar contents averaging 30-40% respectively. Two deeper exploration holes on Sections 4+60W and 5+00W confirm that the deposit extends to depths of at least 275 metres (where it remains open) with little change in the character or thickness of the mineralized zone. A new calculation of the increased resource for the deposit will be prepared in April, establishing the Big Whopper as one of the two largest petalite pegmatite deposits in the world.

Tantalum Exploration.

The Phase 2 program also included five exploration holes designed to look for new zones of tantalum mineralization. These holes were drilled on the eastern and western extensions of the Big Whopper system and on a newly-outlined dyke enriched in the lithium-rubidium mineral lepidolite ("the Lepidolite Dyke"), that is situated immediately northeast of the Big Whopper. This work was successful in identifying some of the highest grade tantalum mineralization found to date on the Separation Rapids property and confirmed that these zones tend to be associated with albite-rich pegmatite dykes located peripheral to the Big Whopper Petalite deposit. Hole S-98-49 intersected a narrow dyke assaying 0.164% Ta2O5 on the little-explored western part of the property, and hole S-98-55 intersected a 2.0 metre wide dyke averaging 0.035% Ta2O5 on the eastern extension of the Big Whopper system. Numerous similar dykes mapped elsewhere on the property have yet to be evaluated for their tantalum potential, and a follow-up exploration program is scheduled to begin in May. The Lepidolite Dyke also shows enrichment in tantalum relative to the Big Whopper, averaging 0.011% Ta2O5 across a 15 metre true width along with 0.728% Rb2O and 1.662% Li2O.

The Company expects to begin the pre-feasibility study in May as soon as a consulting engineering firm has been contracted to do the work. In the meantime, the Company has initiated a baseline environmental study on the property under the supervision of Knight-Piesold, Consulting Engineers of North Bay, Ontario.

Management is extremely pleased with the progress achieved to date at Separation Rapids. The project has been advanced from a raw prospect to the pre-feasibility stage in less than 12 months, and confidence in the economic viability of the project continues to increase as each new study is completed.

For further information please contact Donald S. Bubar, at [phone] or Investor Relations at [phone] or toll free at 1-888-338-1188. Corporate Information may also be accessed on the internet at www.avalonventures.com

ON BEHALF OF THE BOARD "Donald S. Bubar" Donald S. Bubar, President

"No stock exchange has either approved or disapproved the information contained herein"

111 Richmond St. W., Suite 1116 Toronto, Ontario M5H 2G4 Tel: [phone] Fax: [phone] E-Mail [e-mail] Internet: http://www.avalonventures.com

-0- Working Capital $1.3 Million Shares Outstanding 16,762,564 SEC 12g3-2(b) No. 82-4427

CONTACT: Avalon Ventures Ltd.

Donald S. Bubar, 416/364-4938

URL: Internet: http://www.avalonventures.com