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Avalon Announces Closing of $30,030,000 Offering

TORONTO, ONTARIO--(Marketwire - 09/30/10) - NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRE SERVICES.Avalon Rare Metals Inc. (TSX:AVL - News)(Pinksheets:AVARF - News) (the "Company") is pleased to announce that it has closed its previously announced short form prospectus offering pursuant to which the Company has issued 9,240,000 units at a price of Cdn$3.25 per Unit to raise aggregate gross proceeds of Cdn$30,030,000 (the "Offering"). Each unit consists of one common share in the capital of the Company and one-half of one common share purchase warrant. Each whole warrant entitles the holder thereof to acquire one common share at a price of Cdn$3.60 until September 30, 2011. CIBC World Markets Inc. acted as lead underwriter for the Offering along with a syndicate of underwriters including Laurentian Bank Securities Inc., Stonecap Securities Inc. and Canaccord Genuity Corp. (collectively, the "Underwriters"). The Underwriters received a cash commission equal to 6% of the gross proceeds of the Offering, or $1,801,800, and broker warrants entitling the Underwriters to purchase 277,200 units at any time up to and including September 30, 2011, at the same price and on the same terms as the offered units.The net proceeds of the Offering will be used to continue exploration and development of the Company's Thor Lake project in the Northwest Territories and for general corporate purposes.The Company has received the conditional approval of the Toronto Stock Exchange for the listing of the warrants and the additional common shares issued on closing of the Offering, as well as the warrants and common shares issuable upon exercise of the broker warrants and the common shares issuable upon exercise of the warrants, subject to fulfilling all of the listing conditions of the Toronto Stock Exchange. The warrants will trade under the stock symbol "AVL.WT".This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws and may not be offered or sold in the United States or to "U.S. persons", as such term is defined in Regulation S promulgated under the 1933 Act, absent registration or an applicable exemption from the registration requirements of the 1933 Act and applicable state securities laws.About Avalon Rare Metals Inc. (TSX:AVL - News)(Pinksheets:AVARF - News)Avalon Rare Metals Inc. is a mineral exploration and development company focused on rare metals deposits in Canada. Its flagship project, the 100%-owned Nechalacho Deposit, Thor Lake, NWT, is emerging as one of the largest undeveloped rare earth elements resources in the world. Its exceptional enrichment in the more valuable 'heavy' rare earth elements, which are key to enabling advances in green energy technology and other growing high-tech applications, is one of the few potential sources of these critical elements outside of China, currently the source of 95% of world supply. Avalon is well funded, has no debt and its work programs are progressing steadily. Social responsibility and environmental stewardship are corporate cornerstones. Avalon's performance on community engagement in the north earned it the 2010 PDAC Environmental and Social Responsibility Award.Shares Outstanding: 90,631,670. Cash resources: approximately $39 million.To find out more about Avalon Rare Metals Inc., please visit our website at www.avalonraremetals.com. For questions and feedback, please e-mail the Company at ir@avalonraremetals.com or phone Don Bubar, President and CEO at 416-364-4938.This news release contains forward-looking information and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Forward-looking information is based on the opinions and estimates of management at the date the information is given, and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.