Summer drilling program produces best results to date from Lake Zone REE deposit, Thor Lake, NWT.

December 22, 2008

No. 08-15

Avalon Ventures Ltd. TSX: AVL (the “Company”) is pleased to announce assay results from the final 31 holes drilled in July, August and September, 2008 on the Lake Zone Rare Earth Element (“REE”) deposit on its 100% owned Thor Lake Rare Metals project located near Yellowknife, NWT. These holes were designed to define the southern, eastern and western margins of the deposit, and follow-up on the very encouraging results obtained from the two most southerly holes drilled last winter (L08-97, 98) in an effort to define the richest part of the deposit for development planning purposes. While limits to the economic grade REE mineralization were defined on the eastern margins of the deposit, the southern and western extensions remain wide open. The recent drilling in these parts of the Lake Zone has produced some of the best results to date, in terms of both grade and thickness of the REE mineralization, and will be further explored this winter.

In particular, drill hole L08-118, near the southeastern margin of the deposit, returned the highest combination of width and grade encountered to date with the virtually the entire hole intersecting potentially economic grade mineralization averaging 1.6% TREO over 185.4m with 12% of the TREO consisting of the more valuable HREO. TREO is defined as the sum of all 14 REE plus yttrium, expressed in oxide form and HREO is defined as the heavy rare earth elements from europium to lutetium plus yttrium as oxides. The high grade Basal Zone in this same hole produced some exceptional grades of 3.71% TREO with 36% HREO over 8.0 metres or 2.71% TREO with 34% HREO over 17.4 metres. Widths reported are believed to approximate true thickness.

Other highlights include two holes, L08-117 and L08-129, drilled 90 and 150 metres respectively south of previously-announced hole L08-98. Hole L08-117 intersected another very broad interval of Basal Zone mineralization averaging 1.9% TREO with 23% HREO over 45.10m including 16m averaging 2.66% TREO with 22% HREO. Hole L08-129 intersected a 22m interval in the Basal Zone averaging 2.25% TREO with 30% HREO. This attractive part of the Basal Zone remains open to the south for potential expansion. This potential is supported by historical airborne magnetic data which indicates a magnetic anomaly similar to that associated with the known Lake Zone deposit extending over a broad untested area for about 1 km to the south.

A complete compilation of significant assay results and hole locational data is provided in Tables 1 and 2 below. An updated drill hole location plan, preliminary block model and illustrative cross section can be found in the Corporate Presentation at www.avalonventures.com. The cumulative drilling on the Lake Zone since August, 2007 totals 16,640 metres in 85 drill holes.

As previously reported, the higher grade sub-zone, called the Basal Zone, forms a gently dipping tabular sheet situated near the base of the mineralized envelope. The Basal Zone is notable for its relatively high proportion of the more valuable heavy rare earth elements Europium through Lutetium (“HREE”). For example the above-mentioned 8m interval in L08-118 contained 8m of 5800ppm (5.8 kg/tonne) neodymium oxide, 1728ppm (1.7kg/tonne) dysprosium oxide and 283 (0.28kg/tonne) terbium oxide (Table 3). The Lake Zone mineralization also contains high levels of other rare metals notably tantalum, niobium, zirconium, and gallium, which may prove to be valuable by-products of REE production. Assay highlights for these elements from the recent drill holes are summarized in Table 4 below.

Average REE oxide prices over the past 3 years (FOB China basis) are US$20.50/kg for neodymium oxide, US$88.55/kg for dysprosium oxide and US$573/kg for terbium oxide. Prices for some of the rare earths have softened recently in response to reduced demand associated with the global economic slowdown, but none have seen the precipitous price drops experienced by many of the base and precious metals. In fact, one light REE (Lanthanum) has actually increased in price over the past 10 months from US$5.65 to US$8.00/kg today, peaking at US$9.60/kg in June, 2008.

Lake Zone REE Resource Estimate

The interim REE resource estimate for the Lake Zone, which was to be based on all the drilling results received by July 31, 2008, and that the Company had anticipated disclosing earlier this fall, unfortunately could not be completed on schedule. This was due to slow assay turnaround, capacity issues with our technical consultants, and some initial technical challenges in modeling the Basal Zone resource as a distinct sub-zone of the deposit. Consequently, the plan to release an interim resource estimate has now been abandoned. With all the results from the summer drilling program now being available, work will continue toward preparing a comprehensive resource estimate incorporating all of the available data, as well as results from some of the historic holes, where quarter core could be re-assayed. This work is targeted for completion by mid-January, 2009.

A $1.5 million winter drilling program, financed with the proceeds of the recently completed flow-through private placement, is scheduled to commence in February, 2009. The main objectives of this program will be further exploration of the southern extensions of the deposit for additional high-grade mineralization and in-fill drilling to better define the deposit and increase the confidence level on the known resource in support of the prefeasibility study to be completed in 2009. The drill contract is currently being tendered and given the dramatic slowdown in activity in the industry, management is optimistic that a reduction in the average all-in drilling costs and faster assay turnaround will be achieved in 2009.

Metallurgical Process Development Work

Metallurgical testwork to determine optimal recovery methods for the REE and other rare metals is continuing at SGS Minerals, Lakefield, metallurgical facility (“SGS”) under the supervision of Mr. John Goode, P.Eng. REE mineral concentrates produced in preliminary flotation tests are now being utilized in bench scale hydrometallurgical testwork, targeted for completion in early, 2009. This data will assist in the determination of potential operating costs for a process plant which will, in turn, be applied in the resource estimate to identify appropriate cut-off grades.

Quality Control

A rigorous QA/QC program was implemented for all of the program samples to ensure high quality data. Analytical standards were prepared from crushed rejects of historical Lake Zone drill core samples, and then analyzed at five separate laboratories to determine an average value. These standards were then routinely inserted into the sample batches to monitor analytical data. All drill core was split on site, sampled in 2m intervals and shipped to Acme Laboratories facility in Yellowknife for sample preparation. Acme then shipped pulverized splits from all the samples to its laboratory in Vancouver, BC. Duplicates and other check samples are being analyzed at ALS Chemex Laboratories, Vancouver, BC.

All samples are being analyzed at both laboratories by lithium metaborate/tetraborate fusion and dilute nitric acid digestion, followed by whole rock and 45 element multielement ICP analysis. Details of the factors used to calculate rare earth oxides are posted on the Company website along with complete analytical data. Drilling operations were performed by Peak Drilling Ltd. of Courtenay B.C. under the supervision of J.C. Pedersen, P.Geo., Senior Geologist. The Company’s Vice-President, Exploration, Dr. William Mercer, Ph.D., P.Geo. provided overall direction on the project.

About Avalon Ventures Ltd.

Avalon Ventures Ltd. is a Canadian junior mineral exploration and development company, with a primary focus on rare metals and minerals with high technology applications related to electronics, energy efficiency and a cleaner environment. Avalon currently holds a portfolio of five such projects, including three that are at, or close to, the feasibility stage. Shares Outstanding: 67,649,748. Cash resources: approximately $10.0 million.

To find out more about Avalon Ventures Ltd., please visit our website at www.avalonventures.com. This news release is available on the Company’s official on-line investor relations site for investor commentary, feedback and questions. Investors are invited to visit the “Avalon Ventures” IR Hub at http://www.agoracom.com/ir/avalon. In addition, investors are invited to e-mail their questions and correspondence to AVL@agoracom.com or phone Don Bubar, P.Geo. President, at 416-364-4938. Mr. Bubar and Dr. Mercer are the Qualified Persons responsible for the technical content of this news release.

This news release contains forward-looking information. This forward-looking information includes, or may be based upon, estimates, forecasts, and statements as to management’s expectations with respect to, among other things, the size and quality of the Company’s mineral resources, progress in development of mineral properties, demand and market outlook for metals and future metal prices. 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. These factors include the inherent risks involved in the exploration and development of mineral properties, uncertainties with respect to the receipt or timing of required permits and regulatory approvals, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future and other factors. 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.

Table 1: Drill Hole Locations

Table 2: REE assay results summary for drill holes L08-110 to 136

Table 3: Individual REO values for selected high grade sub-intervals: Neodymium (Nd), Europium (Eu), Terbium (Tb), Dysprosium (Dy), and Yttrium (Y) as oxides

Table 4: Individual rare element values for selected high grade sub-intervals: Niobium (Nb), Tantalum (Ta), Gallium (Ga), and Zirconium (Zr) as oxides in ppm.