Avalon Announces 1,259,000 Share Purchase Warrants Exercised and Comments on the Recent Increase in Share Price and

TORONTO, ONTARIO, May 27 (MARKET WIRE) --
Avalon Rare Metals Inc. (TSX: AVL) ("Avalon" or the "Company") announces
that further to its news release of May 1, 2009, a total of 1,259,000
share purchase warrants were exercised at the amended price of $0.70
prior to their expiry on May 22, 2009, yielding gross proceeds of
$881,790, while 2,546,000 warrants expired unexercised. The proceeds will
be used to fund additional exploration work on Avalon's Lake Zone Rare
Earth Elements deposit, Thor Lake, NWT and for working capital.

Many shareholders have been inquiring as to reasons for the recent sharp
increase in trading volumes and market price of the Company's shares
since the opening of trading on Monday, May 25. Since there have been no
new developments or undisclosed material changes in the Company's
business, management believes that this unexpected increase in trading
volumes is related to the recent publication of some independent
commentary on the rare earths business.

About Avalon Rare Metals Inc.

Avalon Rare Metals Inc. (TSX: AVL) is a mineral exploration and
development company focused on rare metals deposits in Canada. Its
flagship project, the 100%-owned Lake Zone 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. The Company is well funded, has no
debt and its work programs are unaffected by market volatility. Social
responsibility and environmental stewardship are corporate cornerstones.

Shares Outstanding: 69,436,948 (including shares issued on exercise of
the aforementioned warrants). Cash resources: approximately $7.8 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 office@avalonraremetals.com.

For general discussion and commentary on the rare metals, please visit
www.raremetalblog.com.

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.

Contacts:
Avalon Rare Metals Inc.
Don Bubar, P.Geo.
President
416-364-4938
office@avalonraremetals.com
www.avalonraremetals.com

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