TORONTO, ONTARIO, May 12, 2010 (Marketwire) --

TORONTO, ONTARIO -- (Marketwire) -- 05/12/10 -- Avalon Rare Metals Inc. (TSX: AVL)(OTCQX: AVARF) ("Avalon" or the "Company") is pleased to provide an update on the winter drill program on its Nechalacho rare earth elements ("REE") deposit in the Northwest Territories of Canada. The winter drill program concluded on April 20, 2010 with 11,398 metres completed in 43 holes and assay results have now been received from 22 of these holes. These results are highlighted by the discovery of a new high grade sub-zone at shallow depths in the Upper Zone, east of North Tardiff Lake and further heavy rare earth ("HREE") rich intersections in the Basal Zone near Long Lake.

HIGHLIGHTS



--  Three drill holes have intersected exceptional TREO(1) grades in the

newly discovered "North Tardiff" sub-zone starting at bedrock surface

with individual 2 metre samples running up to 19.84% TREO with 5.3%

neodymium oxide within an 11 meter intercept averaging 10.78% TREO

(7% HREO/TREO).



--  Drill hole L10-220, a 65 degree angle hole located near Long Lake,

averaged 1.77% TREO (13% HREO/TREO) over 142 metres including a Basal

Zone intercept of 23.7 metres averaging 1.90% TREO with 26% HREO/TREO.



--  Due to the recent identification of additional indicated resources

adjacent to previously announced indicated resources in the Basal Zone,

the prefeasibility study is undergoing modifications to its mine plan.

Avalon anticipates that these modifications, coupled with pending

results from ongoing hydrometallurgical process development work needed

to finalize the plant design, will result in a short delay in the

completion of the prefeasibility study until mid to late June 2010.



--  In April, the Company formally initiated the permitting process by

filing a detailed Project Description Report with the Mackenzie Valley

Land and Water Board ("MVWLB") in support of its application for Type A

Land Use and Water licences.

(1) Total Rare Earth Oxides (TREO) refers to the elements lanthanum to lutetium, plus yttrium, expressed as oxides. See Avalon's website for conversion factors from elements to oxides. Heavy Rare Earth Oxides (HREO) refers to the elements europium to lutetium, plus yttrium, expressed as oxides as a percentage of the TREO. Light rare earths (LREO) refers to the elements lanthanum to samarium, expressed as oxides. HREO/TREO refers to the proportion of heavy rare earth oxides as a percentage of the total rare earth oxide content of the rock.

2010 WINTER DRILL PROGRAM

Drilling commenced with one drill rig (Rig #1) as of January 17, 2010 and on February 21, 2010, a second drill (Rig #2) was added. By April 20, Rig #1 had completed 33 drill holes for a total of 7,970.3 metres and Rig #2 had completed 10 drill holes for a total of 3,472.9 metres, giving overall totals of 43 drill holes and 11,398.2 metres. All core was of large size HQ diameter to provide additional material for future metallurgical testwork.

Rig #1 carried out "in-fill" definition drilling to convert more of the Inferred Resources in the Basal Zone to the Indicated level of confidence, focusing on areas that are only accessible under frozen conditions. This included the west end of Long Lake, where broad intervals of HREE rich mineralization were encountered earlier in the winter program (see news release of March 3, 2010) and east of North Tardiff Lake where promising mineralization was encountered in 2009 (see Table 1 below for drill hole locations).

All the definition drill holes were designed to reduce the spacing between drill hole intercepts in the Basal Zone to an average of 50 metres, the minimum requirement to classify the resources as Indicated. Assay results from 22 holes, all drilled in the North Tardiff Lake area, are reported in this release, with all but one hole (L10-225), intersecting significant REE mineralization in the Basal Zone (see Table 2 below).

Assays from all the holes drilled on the west of Long Lake remain outstanding but are expected within the next four weeks. An updated drill plan, including all drill holes completed to date, has been posted on Avalon's Thor Lake project website at: http://www.avalonraremetals.com/projects/thor_lake/thor_lake_intro/.

Rig #2, which has greater depth capacity, initially tested for the extension of the Basal Zone immediately south of Long Lake, and then conducted condemnation drilling on proposed tailings sites.

The project was inspected by Indian and Northern Affairs Canada Land Use in April with no issues noted. The inspection report is posted on Avalon's website on the CSR/Sustainability page under Thor Lake Project Land Use Inspection Reports at http://www.avalonraremetals.com/sustainability/.

SIGNIFICANT ASSAY RESULTS

In addition to the expected significant intercepts Basal Zone, many of the holes drilled in the North Tardiff Lake area intersected interesting TREO values in the Upper Zone in association with zones of semi-massive bastnaesite mineralization. In particular, a high grade near surface zone was defined by a number of drill holes over an area of about 150 meters by 150 metres, to the east of North Tardiff Lake (see drill plan on website).

Some of the highest TREO assays encountered to date at the Nechalacho deposit drilling were received for drill hole L10-212 where a near surface zone averaged 10.78% TREO with 7% HREO (0.72% HREO absolute) over 11 metres contained with an interval of 4.98% TREO over 39.5 metres starting from bedrock surface. Within this intercept an individual 1.6 metre sample returned 19.84% TREO, with 54 kilograms per tonne (kgs/t) Nd2O3, 59 kgs/t La2O3, 59 kgs/t Ce2O3 and 2.2 kgs/t Dy2O3. This zone was also intersected in drill hole L10-211 with 3.19% TREO over 35.8 metres including 12 metres of 4.43% TREO and drill hole L10-213 with 2.3% TREO over 48.45 metres.

Note that these are angle holes and the intervals reported are drilled widths, and not necessarily true widths. Drill holes L10-211 and L10-212 were fanned out from site of L07-55, a vertical hole which contained 4.64% over 31.8 metres, and L10-213 was a 50 metre stepout to the east of L07-55. Further drilling is required this new high grade discovery in the North Tardiff Lake area. Commented VP, Exploration, Bill Mercer, "as a near-surface satellite deposit to the main Basal Zone resource, it is potentially very significant to the mine development plan as it offers the possibility of a low cost source of high grade mill feed to supplement the primary feed from the mining of the Basal Zone deposit."

Significant Basal Zone intercepts range between 1.81% TREO with 31% HREO over 5.3 metres in hole L10-215 to 2.14% TREO and 20% HREO over 90.2 metres in hole L10-224. Examples of individual elemental values include for the above mentioned interval in drill hole L10-224, the average values are 3.9 kgs/t Nd2O3, 0.09 kg/t Eu2O3, 0.10 kg/t Tb2O3 and 0.53 kg/t Dy2O3, along with 4kgs/t Nb2O5 and 30.7 kgs/t ZrO2 all over 90.2 metres.

Drill hole L10-212 intersected an interval of 2.8% TREO and 30% HREO over 8 metres within a 20 metre interval of 1.81% TREO and 25% HREO, The 8 metre interval included 7.5 kgs/t Nb2O5, 0.7 kgs/t Ta2O5 and 51.5 kgs/t ZrO2, as well as 4.6 kgs/t Nd2O3, 0.1 kgs/t Eu2O3, 0.19 kgs/t Tb2O3 and 1 kgs/t Dy2O3.

Several holes produced essentially continuous mineralized intercepts through the Upper and Basal zones. For example, drill hole L10-220, a 65 degree angle hole, intersected a continuous zone of mineralization over 142 meters averaging 1.78% TREO with 13% HREO starting 25 metres below the collar. The 75 degree angle hole from the same setup, L10-219, intersected 1.39% TREO with 14% HREO over 128.6 metres.

Drill holes L10-221 and L10-227 were drilled with Rig #2 on the south side of Long Lake to test for the potential continuation of the Nechalacho deposit to the south and also to test for zones of structural weakness for geotechnical purposes related to mine planning. Long Lake had previously been thought to be a major fault structure that may have displaced the mineralized zone and created a zone of fracturing that could increase mine development costs. No fault structure was intersected in these holes. More importantly, the Basal Zone was intersected south of Long Lake in hole L10-221 at the predicted depth, and although only weakly mineralized in this hole, it proved that the deposit remains open for expansion to the south.