An anonymous director reports

AVALON COMPLETES $0.75 MILLION PREFERRED SHARE FINANCING AND $140,000 FIRST TRANCHE OF PRIVATE PLACEMENT

Avalon Advanced Materials Inc. has completed a non-brokered private placement financing consisting of 150 Series C1 preferred shares on a private-placement basis at a price of $5,000 per preferred share for gross proceeds of $750,000 with an entity managed by the Lind Partners, a New York-based asset management firm.

The preferred shares do not carry a dividend, and have a redemption value per share that starts at $5,000 and increases by $250 per share each quarter over the next 24 months, to a cap of $6,750 per share. After the four-month hold period (defined below), the preferred shares can be converted by Lind into common shares of the company at a price per common share equal to 85 per cent of the five-day volume-weighted average price of the common shares on the Toronto Stock Exchange immediately prior to the date that notice of conversion is given.

In conjunction with the closing, Lind will receive a commitment fee of $37,500 and 3.75 million common share purchase warrants. Each warrant entitles the holder to purchase one common share of the company at a price of 12.5 cents per common share until 60 months after today.

Pursuant to Canadian securities laws, the securities issuable under this private placement will be subject to a hold period, which expires four months and one day after closing. After the hold period, Lind has the basic right to convert 10 preferred shares into common shares of the company on a monthly basis, subject to certain conversion limits set out in the agreement; however, Lind is permitted to convert up to 30 preferred shares on a monthly basis in the event such amount does not exceed 20 per cent of the company's 20-day traded volume of common shares on the TSX immediately prior to the date of delivery of a conversion notice.

Lind will also be entitled to accelerate its conversion right to the full amount of the redemption value applicable at such time or demand repayment of the applicable redemption value per share in cash, upon the occurrence of certain events as set out in the agreement. The company has the right to redeem the preferred shares at any time after the hold period at a small premium to the redemption value. The company has floor price protection, such that if any conversion results in an effective conversion price of less than 10 cents per common share, then the company has the right to deny the conversion and instead redeem the preferred shares that were subject to that conversion for the redemption amount in cash plus a 5-per-cent premium.

At any time while any preferred shares are outstanding, Lind has the option of subscribing for up to an additional 50 Series C2 preferred shares at a price of $5,000 per share, and under the same terms and conditions as the initial financing, subject to certain triggering events and subject to the prior approval of the Toronto Stock Exchange.

The company has received conditional approval of the TSX in connection with the completion of the Series C1 preferred share private placement.

Private placement

In addition to the above transaction, the company has also completed the first tranche of a non-brokered private placement consisting of 1.4 million units at a price of 10 cents per unit for gross proceeds of $140,000.

Each unit comprise one common share and one common share purchase warrant. Each warrant entitles the holder to acquire one common share at a price of 12 cents for a period of 24 months from today, or, if at any time following today, the closing price of the common shares on the TSX is 16 cents or higher for a period of 20 consecutive trading days, the company may, by notice to the holder (supplemented by a news release of general dissemination), reduce the expiry date of the warrants to not less than 30 days from the date of such notice.

The proceeds from both financings will be used for continuing market development work, metallurgical studies and preliminary engineering work on the Separation Rapids lithium project, and for general working capital purposes.

About Avalon Advanced Materials Inc.

Avalon Advanced Materials is a Canadian mineral development company specializing in niche market metals and minerals with growing demand in new technology. The company has three advanced-stage projects, all 100 per cent owned, providing investors with exposure to lithium, tin and indium, as well as rare earth elements, tantalum, niobium and zirconium. Avalon is currently focusing on its Separation Rapids lithium project, Kenora, Ont., and its East Kemptville tin-indium project, Yarmouth, N.S.