Avalon Rare Metals Inc., the company developing a rare-earth deposit in Canada’s Northwest Territory, fell after delaying the target date for its first production.
Avalon dropped 23 percent to C$1.67 at the close in Toronto after announcing its first production may be in “late 2016.” Avalon needs more time to complete metallurgical test work, the Toronto-based company said in a statement yesterday after the close of regular trading on North American markets.
“They are delaying their project for the second time because of the metallurgy, so people are starting to think there are real problems there,” said Luisa Moreno, an analyst at Jacob Securities Inc. in Toronto. “Avalon is being punished in a way for being the first. Because they are the advanced one, they are having all the problems.”
Rare earths are 17 chemically similar metallic elements used in batteries, mobile phones and computer hard drives. China produces more than 90 percent of the world’s rare-earth supply.