Avalon Rare Metals Raises Measured Resources for Nechalacho Rare Earth Elements Deposit

Avalon Rare Metals Inc. AVL is pleased to announce an updated resource estimate for the Nechalacho Rare Earth Elements Deposit, Thor Lake, NWT (the "Nechalacho Deposit") which is effective as of November 21, 2012. The estimate, prepared by Avalon geologists and independently audited by Roscoe Postle Associates Inc. ("RPA"), is based on the assays from all drilling completed up to August 27, 2012. The updated resource estimate further increases mineral resources in the Nechalacho Deposit at the key Measured level of confidence. The updated NI 43-101 technical report prepared by RPA, dated August 25, 2011(the "RPA Technical Report"), recommended preparation of a mine plan for the Basal Zone part of the Nechalacho Deposit. This resource estimate for the Basal Zone (Table 1) will serve as the basis for the mine plan and reserves estimate in the Feasibility Study ("FS") currently in preparation and scheduled for completion in Q2 2013. An updated resource estimate is also provided for the Upper Zone of the Nechalacho Deposit in Table 2, although it does not form part of the mine plan in the RPA Technical Report. The updated estimate is highlighted by an increase in Measured Mineral Resources in the Basal Zone to 10.88 million tonnes grading 1.67% TREO(1), 0.38% HREO and 22.91% HREO/TREO(2) at the revised base case cut-off of US$320 NMR(3) per tonne, compared to C$260 NMR per tonne used in the previous resource estimate. The revised base case cut-off reflects anticipated higher overall operating costs based on preliminary estimates of including separation and refining costs in the development model to be incorporated in the FS. The increase in measured resources ensures that a high proportion of the resources applicable to the mineral reserves to be used in the FS mine plan will be at the highest level of confidence. The breakdown of the resource estimate grades for the individual rare earth element oxides is provided in Table 3.