Mr. Zeeshan Syed reports

AVALON SIGNS MOU WITH METSO, A WORLD LEADER IN CRITICAL MINERALS TECHNOLOGY, TO ADVANCE THE DEVELOPMENT OF ONTARIO'S FIRST LITHIUM PROCESSING FACILITY

Consistent with its strategy to become a leading North American vertically integrated lithium producer, Avalon Advanced Materials Inc. has signed a memorandum of understanding to create a strategic partnership with Metso Corp., a global leader in clean, sustainable critical mineral processing technology.

The agreement, signed at Canada House in London, United Kingdom, will immediately see the parties seek to establish terms to develop a lithium hydroxide production facility to process lithium mineral concentrates that are essential for the North American electric vehicle (EV) battery value chain.

Avalon intends to deploy Metso's world-leading technology to construct and operationalize a full-service lithium processing facility at the company's recently acquired Thunder Bay, Ont., industrial site. Upon completion of the project, Avalon will be the first vertically integrated lithium producer in Ontario, while ensuring Canada's EV battery manufacturing base has a stable, proximate and long-term supply of this strategically vital resource.

"Metso's platform and technological solutions perfectly complement Avalon's vision to complete an integrated lithium value chain in Ontario, predicated on innovative process solutions," said Zeeshan Syed, president of Avalon. "We view Metso as an integral part of this rapidly growing sector, and a foundational partner in developing internationally best-in-class processing capabilities that are environmentally sustainable, allowing Avalon to meet the soaring demand for battery-grade lithium."

The non-binding memorandum of understanding stipulates:

• The pursuit of a definitive agreement to establish a lithium hydroxide processing facility in Thunder Bay, Ont.;
• Avalon to license Metso technology and solutions to produce lithium hydroxide cathode materials to serve the EV market;
• Allow Metso to conduct testing and engineering work across Avalon's portfolio of critical-mineral projects, including the company's flagship deposit at Separation Rapids near Kenora, Ont.;
• The parties anticipate reaching a definitive agreement on or before Sept. 1, 2023.

Metso's sustainable next-generation production and processing technologies are being deployed internationally by governments and clean energy producers in order to address and deliver the necessary supply required by the emerging EV battery industry. Avalon's strategic partnership with Metso is a first in Canada, and is a significant step toward helping the company execute on its vertically integrated business strategy -- and in turn, entrench Ontario's position as an advanced manufacturing hub serving not only North America, but the world.

"Metso is looking forward to partnering with Avalon and be part of its long-term vision to be a mid-stream supplier in the lithium hydroxide space. We are aligned with Avalon's vision of the future and proud to play a key role in technology supply and advancement into clean energy solutions," said Mikko Rantaharju, head of hydrometallurgy at Metso. "We are also extremely excited to be partnering with the first Ontario conversion facility with Metso's technology. The innovation advantages of the alkaline process allow for elimination of the use of potentially harmful chemicals such as sulphuric acid and comparatively reduces overall solid waste and emissions, making it environmentally friendlier and over all safer for workers and local surrounding communities."

Canada's critical minerals strategy

This partnership complements Avalon's strategic business objectives, while also providing direct support to the federal government's critical minerals strategy to increase the supply of responsibly sourced critical minerals and develop domestic supply chains for the green and digital economy, as announced by Natural Resources Minister, the Honourable Jonathan Wilkinson, as well as the Honourable Francois-Phillippe Champagne, Minister of Innovation, Science and Industry.

The planned Thunder Bay processing facility and upstream lithium project in the Kenora region will create an estimated 500 jobs. It will also enable broader development of Northwestern Ontario's regional lithium assets by other producers seeking to utilize the proximity of Avalon's processing capacity. The facility will also help foster new economic development opportunities for local and regional first nations communities.

"We're honoured to play a role in securing Canada's clean energy future, and understand the important work that's still required across both the public and private sectors to deliver on the province of Ontario and Ottawa's stated goals," Mr. Syed added.

About Avalon Advanced Materials Inc.

Avalon Advanced Materials is a Canadian mineral development company focused on vertically integrating the Ontario lithium value chain. The company is currently developing its Separation Rapids lithium deposit near Kenora, Ont., while continuing to advance other projects in its portfolio, including its 100-per-cent-owned Lilypad spodumene-cesium-tantalum project located near Fort Hope, Ont.

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