Mr. Scott Monteith reports

AVALON ANNOUNCES A SUBSTANTIVE 20% INCREASE IN DEPOSIT SIZE AT ITS FLAGSHIP SEPARATION RAPIDS JOINT-VENTURE LITHIUM PROJECT

Consistent with its dual-market strategy to supply both the global glass ceramics market and North American EV (electric vehicle) battery manufacturing, Avalon Advanced Materials Inc. has released an updated mineral resource estimate (MRE) for the Avalon-Sibelco joint venture lithium deposit at Separation Rapids. This updated MRE, compliant with National Instrument 43-101, reports 10.08 million tonnes averaging 1.35 per cent of measured and indicated lithium oxide (Li2O), a 20-per-cent increase compared with previous results.

Separation Rapids MRE highlights:

• Open pit with a measured and indicated category of 9.39 million tonnes averaging 1.34 per cent Li2O with the start of an underground resource of 680,000 tonnes averaging 1.43 per cent Li2O;
• 10.08 million tonnes averaging 1.35 per cent Li2O in measured and indicated, a 20-per-cent increase in size as compared with 2018 results;
• 2.81 million tonnes averaging 1.38 per cent Li2O in the inferred category, a 57-per-cent increase in size as compared with 2018 results;
• 136,000 tonnes of Li2O in measured and indicated, a 15-per-cent increase in size as compared with 2018 results;
• 39,000 tonnes Li2O in the inferred category, a 60-per-cent increase in size as compared with 2018 results;
• Exploration potential of an additional three million tonnes to six million tonnes of resource grading between 1.0 per cent and 1.4 per cent Li2O, which could relate to an increase in Li2O by 30,000 tonnes to 80,000 tonnes.

Note: This potential additional quantity and grade are conceptual in nature. There has been insufficient exploration to define this additional mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource. The basis for this exploration potential has been determined using the same methodology as for the MRE.

Located near Kenora, Ont., the Separation Rapids deposit is owned by the recently announced joint venture between Avalon and SCR-Sibelco NV, an Antwerp-based company and leader in the global glass ceramics and materials solutions business, with projects in over 30 countries.

"This updated estimate reveals the quality and quantity of the resource at Separation Rapids and underscores the rationale for the strategic partnership between Avalon and Sibelco. It confirms that the deposit can deliver sufficient volumes of commercial-grade feedstock suitable for both the glass ceramics and lithium battery markets," said Scott Monteith, chief executive officer of Avalon. "This data gives Avalon and Sibelco the confidence to pursue the next phase of development at Separation Rapids, finalizing a definitive feasibility study and moving towards production."

Mineral resource estimate (MRE)

The MRE for the Separation Rapids lithium deposit (see attached table) was conducted by SLR Consulting (Canada) Ltd., an independent global mining advisory and consulting firm, using available drill hole data as of June 16, 2023. The MRE was prepared in accordance with NI 43-101, Standards of Disclosure for Mineral Projects. This updated MRE replaces the company's previous MRE dated May 23, 2018. The updated MRE is based on 98 surface diamond drill holes for a total of 17,444 metres of drilling. This includes 13 new surface diamond drill holes totalling 4,128.3 metres drilled since the 2018 resource estimate.

The new resource estimate will be incorporated into a definitive feasibility study of Separation Rapids, to be completed by early to mid-2024, with the intention of commencing on-site operations in 2026.

The 2023 resource pit shell extends horizontally and vertically for approximately 50 metres to 100 metres farther than the 2018 pit design.

Based on the current analysis, SLR estimates that there exists an additional three million tonnes to six million tonnes of exploration potential at a grade of approximately 1.0 per cent to 1.4 per cent Li2O located below the open-pit and underground resources.

Note: This potential additional quantity and grade are conceptual in nature. There has been insufficient exploration to define this additional mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource. The basis for this exploration potential has been determined using the same methodology as for the MRE.

"SLR's analysis shows a substantive increase of the size of the deposit in overall tonnage and metal quantity. As well, the exploration potential in the range of three million tonnes to six million tonnes will allow Avalon to be laser focused on additional drilling to bring this into at least an indicated category," said Rickardo Welyhorsky, chief operating officer at Avalon. "The high definition of the resource and the exploration potential supports transitioning to a definitive feasibility study while further drilling out and increasing our resource."

Mineral resource estimation methodology

An updated MRE was created by SLR using Seequent's Leapfrog Geo and Edge software. Wire frames were created using logged lithology. Initially the pegmatite outlines were modelled, followed by the creation of subdomains between the petalite and lepidolite-petalite mineralogical types. Internal waste horizons of amphibolite have been modelled where continuity exists. Raw assays were capped and then composited to two-metre lengths, broken at domain boundaries. Li2O (lithium oxide), Cs2O (cesium monoxide), Rb2O (rubidium oxide) and Ta2O5 (tantalum pentoxide) were interpolated using ordinary kriging (OK) into a block model comprising of five-metre-by-three-metre-by-five-metre (x, y, z) blocks, with subblocking down to one metre. Search ellipses were oriented using dynamic anisotropy. Nearest-neighbour (NN) estimates were run for validation purposes. Density was assigned using mean values for each lithological domain.

Blocks were classified following CIM (Canadian Institute of Mining, Metallurgy and Petroleum) (2014) definitions using a combination of drill hole spacing and grade continuity. Drill hole spacings of up to approximately 25 metres for measured, 50 metres for indicated and 100 metres for inferred have been used to support the classification. Mineral resources have been constrained with an optimized pit shell, using a cut-off grade of 0.29 per cent Li2O, for the open-pit material and resource panels, which were generated at a cut-off grade of 0.9 per cent Li2O for the underground material.

Qualified person

The MRE for Separation Rapids was prepared by Dr. Volker Moeller, PhD, PGeo, SLR senior resource geologist, under the supervision of Luke Evans, MSc, PEng, SLR principal resource geologist. Mr. Evans is an independent qualified person as defined by NI 43-101. The qualified person is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant factors that could materially affect the MRE.

About Avalon Advanced Materials Inc.

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

In addition to these upstream activities, Avalon is executing on its key strategic objective of developing Ontario's first mid-stream lithium hydroxide processing facility in Thunder Bay, Ont., a vital link bridging the lithium production in the north with downstream EV battery manufacturing markets in the south. Social responsibility and environmental stewardship are corporate cornerstones. Avalon is listed on the Toronto Stock Exchange.

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