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Avalon Advanced Materials Inc.

Company Data | Introduction | Projects in Hand | Management
News Update
| Chinese

Address :  Suite 1901 – 130 Adelaide Street West
Toronto, Ontario
Canada M5H 3P5
Tel No.: (416) 364-4938
Fax No.: (416) 364-5162
Web Site: www.AvalonAdvancedMaterials.com
E-mail: ir@AvalonAM.com
Contact Person: Ron Malashewski
Position: Investor Relations Manager


Company Data

Traded Market: TSX / OTCQX
Traded Symbol: AVL / AVLNF
Outstanding Shares: approx. 179 million
Public Float: approx. 70%
52 Week High: $ 0.33
52 Week Low: $ 0.10
Present Price: Click Here


Introduction

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Avalon Advanced Materials Inc. (formerly Avalon Rare Metals) is a Canadian mineral development company with a primary focus on specialty metals and minerals, notably lithium, tin, indium, rare earths elements and zirconium. Avalon is headquartered in Toronto, Canada and is in the process of developing three of its six Canadian mineral resource properties.

The principles of sustainability are core values of the Company which it demonstrates by producing an annual sustainability report. Avalon is a leader among junior miners in adopting best practices to reduce its environmental footprint, engage with local communities and protect the health and safety of its people.


Projects in Hand

Avalon's mineral property assets are all 100% owned and located in Canada.

(1) Separation Rapids Lithium Project, Ontario

At Separation Rapids, located near Kenora, Ontario, Avalon is developing a large lithium deposit enriched in the rare lithium mineral petalite. Petalite is used in the glass industry to make thermal shock resistant glass-ceramics. Approximately 1 tonne of high purity petalite concentrate was produced from a bulk sample processed in 2015, which has received initial approval from prospective customers in the glass industry. Initial leach tests on this concentrate have also successfully demonstrated the potential to recover high purity lithium compounds for rechargeable battery applications.

Further test work on the petalite concentrate to define processing costs and generate product for battery customer evaluation and approval is in progress, leading to a Preliminary Economic Assessment (PEA) in summer, 2016. Following the completion of the PEA, Avalon intends to proceed into a full feasibility study and environmental assessment work with a target date for completion in second quarter 2017.

(2) East Kemptville Tin-Indium Project, Nova Scotia

At East Kemptville, located in Yarmouth County, Nova Scotia, Avalon is evaluating the potential for redeveloping a past producing tin mining operation as a new producer of tin, copper, zinc and indium. A new NI 43-101 compliant estimate of the historical resource was completed in 2014.

Subsequently, Avalon carried out a $1.3 million work program in H2 2015, involving a diamond drilling program to better define the known tin resource and provide fresh samples of the ore for metallurgical process testwork. An optimized gravity recovery flowsheet has been developed to produce a tin mineral concentrate for sale to processors. In addition, the Company is completing preliminary environmental studies to prepare for a comprehensive environmental assessment in 2016. A PEA will be published in 2016, followed by a full feasibility study to evaluate the potential to resume small-scale tin production in the near term from a large stockpile of previously mined ore.

(3) Nechalacho Rare Earth Elements Project, Northwest Territories

The Nechalacho Rare Earth Elements Project, located at Thor Lake, Northwest Territories, was evaluated primarily for its potential to produce significant quantities of heavy rare earth elements. Avalon has invested over $100 million to date in taking the project through completion of a comprehensive feasibility study released in April 2013. This study yielded a pre-tax Internal Rate of Return (IRR) of 22.5% and NPV at a 10% discount rate of $1.351 billion, based on a $1.575 billion capital cost estimate.

The large Basal Zone of the Nechalacho deposit contains Measured and Indicated Resources of 61.90 million tonnes grading 1.64% TREO (total rare earth oxides) and 21.53% HREO/TREO (heavy rare earth oxides as a percentage of TREO) at the new Base Case US$345 Net Metal Return (“NMR”) cut-off value. The deposit also contains potentially significant quantities of zirconium, tantalum, niobium and gallium. A high grade beryllium deposit also occurs on the property along with some occurrences of lithium.

The Environmental Assessment was approved by the Federal Government in

November 2013. Avalon is currently monitoring the rare earths market and new research into rare earth extraction techniques that can reduce both operating costs and capital costs. Renewed work on the project is contingent upon recovery in demand and pricing for rare earths and lower capital costs or market opportunities for some other rare metals present in the resource.

Investment Highlights

  • Avalon holds a diverse rare metals and minerals property portfolio, offering investors exposure to lithium, tin, indium, tantalum, zirconium, rubidium, cesium, gallium, germanium and the rare earth elements (“REE”).
  • The Separation Rapids deposit hosts the world's largest undeveloped known resource of the rare lithium mineral petalite. Petalite is valued for its exceptional purity and is used as an industrial mineral in certain glass-ceramic applications. Avalon is also investigating the possibility of producing high purity lithium compounds for the rapidly expanding market in lithium ion batteries.
  • Avalon is actively working toward re-starting production of tin at its East Kemptville Project in Nova Scotia, where a significant tin-indium (+copper-zinc-silver) resource remains undeveloped. Growing demand for tin in the electronics sector has created an opportunity to re-develop the site as a new North American producer of conflict-free tin.
  • The Nechalacho Project, with a completed feasibility study and an approved Environmental Assessment in place, is uniquely positioned to bring a new supply of the more scarce heavy rare earths to the market.

Advanced Materials

  • Lithium: Global demand for lithium has grown over 80% in the last five-year period ending in 2014, with the lithium consumption for battery applications growing by 166% during the same period. With over one third of the lithium demand coming from batteries, the market is estimated to grow at more than 7.4% CAGR until 2025, with total demand at least doubling during that period.
  • Tin: Due to lead toxicity concerns, tin is now used to make lead-free solders, found on all electronic circuit boards. This application now accounts for over 50% of global tin demand.
  • Rare Earth Elements (REE): Demand for select REE notably neodymium and dysprosium is growing rapidly because of their application in high strength permanent magnets (now vital in automotive technology), wind turbines and many other consumer electronic products.

Sustainability Reporting

In December 2015, Avalon released its fourth Sustainability Report which includes a self-assessment of sustainability performance in accordance to the Global Reporting Initiative G4 core level and the Mining Association of Canada's Towards Sustainable Mining standards. The report can be downloaded from Avalon's website.


Management

Experienced Management Team

Donald S. Bubar, M.Sc., P.Geo., President and CEO

Mr. Bubar has over 35 years experience in mineral exploration in Canada. He was Vice-President Exploration of Aur Resources Inc. Since 1995, Mr. Bubar has been President and CEO of Avalon Advanced Materials Inc. (formerly Avalon Rare Metals Inc.)

R.J. (Jim) Andersen, CPA, CA, CPA (Illinois), CGMA, Vice President, Finance, Corporate Secretary and CFO

Mr. Andersen has over 20 years of experience in the mining industry. Mr. Andersen is currently a trustee of The George R. Gardiner Museum of Ceramic Art.

David (Dave) Marsh, FAusIMM (CP), Senior Vice President, Metallurgy and Technology Development

Mr. Marsh brings over 30 years of experience in the metallurgical and mineral processing industries. He has worked throughout Africa for over 25 years, as well as in Australia and Canada.

William Mercer, Ph.D, P.Geo, Vice President, Exploration

Dr. Mercer has been VP Exploration with Avalon since 2007. He spent 32 years with the Noranda/Falconbridge group, ultimately serving as Director of Geology and Geochemistry.

Pierre Neatby, BA Econ (Hons), Vice President, Sales and Marketing

Mr. Neatby spent 19 years with the Noranda/Falconbridge group in various sales and marketing roles, including Managing Director of Noranda's London, UK based sales company.

Mark Wiseman, BSc (Hon), MBA, Vice President, Sustainability

Mr. Wiseman is a biologist with over 30 years of health, safety, environment and social responsibility (HSEC) experience. Mr. Wiseman was Director of Health, Safety and Environment for Xstrata Nickel's Koniambo Project.

Gerald (Gerry) Leipert, B.Sc., P.Eng., Director of Project Development

Mr. Leipert has 40 years of experience in the engineering, procurement and construction of projects in the energy and mining sectors, both in Canada and internationally.

Cindy Hu, CPA, CA, CPA (Illinois), Controller

Ms. Hu was a senior manager with the accounting firm Andersen & Company Professional Corporation. She has 11 years experience in public accounting practice and financial reporting.

Melanie Smith, LL.B., Senior Legal Counsel

Ms. Smith worked as in house counsel for Hope Bay Mining Ltd. (Newmont) and Diavik Diamond Mines Inc. (Rio Tinto). She has considerable project development and operational experience in Canada's North.

Board of Directors

Brian D. MacEachen, CA, Chairman and Audit Committee Chair

Donald S. Bubar, M.Sc., P.Geo., President and CEO

Alan Ferry, CFA

Kenneth Thomas, Ph.D, P.Eng.

Jane Pagel, M.Sc.

Patricia Mohr, BA (Hons), MA (Econ), Director

Please refer to Avalon's website www.AvalonAdvancedMaterials.com for complete biographies.


News Update

On April 25, 2017, Avalon Advanced Materials Inc. announced that the company will be pursuing a staged development approach for the Separation Rapids lithium project involving initial construction of a demonstration-scale process plant in the Kenora area. This approach will satisfy the need to produce large volume trial samples of the company's various lithium products for its customers.

The company's preliminary economic assessment (PEA), disclosed in the news release dated Sept. 27, 2016, outlined a scenario for economic production of a high-purity lithium hydroxide product from its concentrate of the lithium mineral petalite using an innovative new hydrometallurgical technique

In addition, under the non-binding letter of intent entered into with Lepidico Ltd., disclosed in the company's news release dated Feb. 6, 2017, the company has a potential buyer for a lepidolite mineral concentrate which will also be produced from the company's demonstration plant.

Recent work by Avalon has determined that a phase 1 demonstration plant designed to process 11 tonnes of ore per hour (90,000 tonnes per annum) could satisfy the initial requirements of Lepidico and potential glass customers, as well as provide sufficient feed for the lithium hydroxide hydrometallurgical process circuit in the same facility.

The company now plans to proceed with an update of its 2016 PEA technical report to reflect the potential for petalite and lepidolite lithium concentrate production in addition to value-added lithium battery materials, using the staged development approach.

Avalon's president, Don Bubar, added, "Getting a lithium battery materials demonstration plant up and running in the Kenora area will establish Northwestern Ontario as a new regional centre for the production of the critical materials needed for Canada's growing cleantech supply chains."

On April 7, 2017, Avalon Advanced Materials Inc. announced that it has appointed Patricia Mohr to the Company's board of directors.

On April 5, 2017, Avalon Advanced Materials Inc. announced that it has commenced a 10-hole, 2,000-metre diamond drilling program on its 100-per-cent-owned Separation Rapids lithium project in Ontario. The program is expected to be completed over the next six weeks to eight weeks.

On March 10, 2017, Avalon Advanced Materials Inc. announced that it has closed its previously announced $2.5-million preferred share financing. The financing involved the issuance of 500 Series A1 preferred shares on a private placement basis at a price of $5,000 per share for gross proceeds of $2.5-million.

On February 23, 2017, Avalon Advanced Materials Inc. announced the results of its 2017 annual and special meeting of shareholders held in Toronto, Ont., on Feb. 22, 2017.

At the meeting, all five director nominees listed in the Company's information circular dated Jan. 10, 2017, were elected as directors of the Company:

Donald Bubar
Brian MacEachen
Alan Ferry
Jane Pagel
Kenneth G. Thomas

Former director Peter McCarter has retired from business and, accordingly, chose not to stand for re-election.

On February 6, 2017, Avalon Advanced Materials Inc. announced that Avalon and Lepidico Ltd. have entered into a non-binding letter of intent under which it is contemplated that Avalon would sell a minimum of 15,000 tonnes per annum of lepidolite concentrate produced from its planned demonstration-scale pilot plant to Lepidico for processing at Lepidico's planned phase 1 commercial lithium carbonate production facility.

On December 23, 2016, Avalon Advanced Materials Inc. announced that it has completed a non-brokered private placement consisting of 2.5 million flow-through shares at a price of 15 cents per share for gross proceeds of $375,000.

On November 30, 2016, Avalon Advanced Materials Inc. announced that it has released its fifth comprehensive sustainability report entitled Minerals for Transitioning Economies, along with its 2016 annual filings. The 2016 sustainability report is available from the Company's website.

On November 22, 2016, Avalon Advanced Materials Inc. received the Best Use of Renewables for Mine Exploration award.

On November 7, 2016, Avalon Advanced Materials Inc. announced that it has completed a non-brokered private placement consisting of 4,545,454 flow-through shares at a price of 22 cents per share for gross proceeds of $1-million.

On October 25, 2016, Avalon Advanced Materials Inc., as a result of a review by staff of the Ontario Securities Commission, clarified the disclosure in its Sept. 27, 2016, news release related to its 100-per-cent-owned Separation Rapids lithium project in Kenora, Onario. The Company neglected to inform readers that the comprehensive technical report would be filed on SEDAR within 45 days of the date of the news release, prior to Nov. 11, 2016.

On September 27, 2016, Avalon Advanced Materials Inc. announced results of a positive preliminary economic assessment for its 100-per-cent-owned Separation Rapids lithium project in Kenora, Ont. The PEA was prepared under the oversight of Micon International Ltd.

Highlights:

  • An average mining rate (open pit) of 950,000 tonnes per year would yield an average annual production of 14,600 tonnes of lithium hydroxide for 10 years and 100,000 tonnes per year of feldspar mineral concentrate for 20 years, as it would continue to be recovered from previously processed material for an additional 10 years after the initial 10-year mine life.
  • The discounted cash flow (DCF) analysis yields a 19-per-cent internal rate of return on a pretax basis and a 16-per-cent IRR on an after-tax basis, assuming 100-per-cent equity financing. The project's net present value at an 8-per-cent discount rate is $343-million pretax and $228-million after tax.
  • Total project construction capital costs are estimated at $514-million, which is inclusive of $86-million in contingencies and $7-million in sustaining capital.
  • The average lithium hydroxide price assumption used for this PEA was $11,000 (U.S.)/tonne and the Canadian-dollar/U.S.-dollar exchange rate assumption was $1 (U.S.) equals $1.30.
  • Measured and indicated mineral resources, as currently delineated, total eight million tonnes averaging 1.29 per cent lithium oxide and 38 per cent feldspar. Inferred mineral resources contribute an additional 1.63 million tonnes at 1.42 per cent lithium oxide to a maximum vertical depth of 260 metres. The deposit is open to depth and along strike.

September 20, 2016 Avalon Advanced Materials Inc. Chinese Language Materials

On August 29, 2016, further to Avalon Advanced Materials Inc.'s news release dated July 25, 2016, the preliminary economic assessment on the Separation Rapids lithium project is now targeted for completion by mid-September, 2016.

On July 25, 2016, Avalon Advanced Materials Inc. provided a progress report on the Separation Rapids lithium project 2016 work program. The preliminary economic assessment (PEA) is expected to be completed before the end of August, 2016. Expenditures on Separation Rapids for the nine-month period ended May 31, 2016, totalled $1.4-million out of a budget of $2-million to Aug. 31, 2016.

On July 7, 2016, Avalon Advanced Materials Inc. reported on its recent participation in the 29th Electric Vehicle Symposium and Exhibition (EVS29) held in Montreal, June 19 to 22, 2016: the largest electric vehicle (EV) conference in the world.

On May 25, 2016, Avalon Advanced Materials Inc. announced that Avalon continues to advance metallurgical work at its Separation Rapids Lithium Project located in Ontario.

The Company has initiated its lithium hydrometallurgical process development work at the facilities of Thibault and Associates Inc., Fredericton, N.B., utilizing the bulk concentrate sample produced in the winter. The work is scheduled for completion in late June, following which the preliminary economic assessment will be finalized.


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