Avalon Rare Metals (TSE:AVL) gained 5% on Thursday, adding to a 57% spike in value over the past month, after announcing improvements in the metallurgical process for its Nechalacho project in Canada's Northwest Territories.

Avalon said Thursday it has developed an optimized process to improve heavy rare earth recoveries to over 90% along with improved zirconium, tantalum and niobium recoveries at Nechalacho as it seeks to cut costs at the project.

The potential $1.6 billion project which the Toronto-based explorer has already spent $90 million developing is described as the largest deposit outside China of scarce heavy rare earths used in a variety of high-tech industries

By midday Avalon was trading at $0.82 on the Toronto big board affording the stock a $85 million market value.

Avalon's run-up this week kicked off on Tuesday when Nechalacho received local NWT environmental approval the mine and plant to be built at Thor Lake, some 100 kilometres southeast of Yellowknife.

Avalon hopes to put Nechalacho – which would be Canada's first rare earth mine – into commercial production in 2017 and is working to secure funding and off-take agreements before construction can start.