Deformed deposit turns lucrative.

Avalon Ventures Ltd. is hoping a new direction and focus will produce positive results with its Separation Falls project in the northwest.

Originally the Separation Falls' site was to be developed as a pure petalite mineral site.

However, with the market for the initial product produced virtually non-existent, the company switched gears about a year ago and came up with a new plan, and are now in the process of developing a processing plant in Kenora.

The new concept developed for the project takes advantage of one of the attributes of the deposit that was originally perceived to be a negative.

"This deposit has been deformed and all the minerals have been stirred up into a soup," says Don Bubar, president of Avalon Ventures Ltd. "The way the minerals are mixed together in the deposit makes a good basic glass and ceramic raw material, that is after you remove a few minerals that represent impurities."

Avalon is now focusing on producing a lithium feldspar product.

"There is a good market for lithium feldspar and the lithium minerals have long been recognized in the glass and ceramics industry because it helps reduce production costs."

Lithium feldspar is essentially sand used in glass applications. It is melted down to make glass. In ceramics, lithium feldspar is pulverized into a fine powder, mixed with clay, and because of its powerful flux, produces hard, durable ceramic pottery. With the new direction, Avalon is looking at building a small-scale pilot processing plant in the Kenora region. The ideal location for the plant would be near the Canadian National Railway or Canadian Pacific Railway lines.

"Most of the product will be shipped by rail, and many of the customers are equipped to receive the product in rail cars," Bubar says.

The location could depend on which railway offers the better freight rates. The company's consultants have pegged the cost of the plant at about $3 million Cdn. The plant could. employ about 24 workers, according to Bubar. The next step is to evaluate the flowsheet by testing a five-ton bulk sample, which was taken from the property in late November.

"It will allow us to finish off the design and engineering work for the small-scale plant."

Bubar hopes to have the testing completed by the start of summer. Construction of the plant would then begin during the summer, with the plant running by fall of this year, and producing test quantities of the product by the end of 2003.

"This exercise is designed to introduce the product into the market, get customers used to it and interested in buying more of it so we can grow the business."

Once established, Avalon will be able to do a final feasibility study on a full-scale production facility, which would be built a couple of years down the road.

Avalon reached a marketing and sales agreement with Amalgamet Canada.

"It is a key agreement for us to go forward with the project."

Amalgamet will be Avalon's exclusive commissioned agent for lithium feldspar sales worldwide for a minimum term of seven years.

"I remain convinced this project could be a real winner and a steady cash flow generator for years to come."

Based on reserves, the site is expected to have a lifespan of at least 30 years.