Mr. Zeeshan Syed reports

AVALON EXPANDS PARTNERSHIP AGREEMENT WITH METSO OF FINLAND FOR ITS LITHIUM PROCESSING FACILITY AND NEW TECHNOLOGY & INNOVATION CENTRE IN ONTARIO

Consistent with its strategic objective to build Ontario's first vertically integrated lithium supply chain serving the North American EV (electric vehicle) battery market, Avalon Advanced Materials Inc. has entered into an expanded partnership agreement with Metso Corp. to advance the construction of a full-service lithium processing facility in Thunder Bay, Ont. The parties have also agreed to co-develop a technology and innovation centre to be located on site in Thunder Bay, accelerating an industrial park concept that will co-locate key supply chain partners.

Partnership highlights:

• Metso to provide testing and engineering equipment procurement and related services to develop and commercialize Avalon's Thunder Bay lithium processing facility.
• Create a testing laboratory for research and development on lithium and clean technology solutions.
• Avalon and Metso to co-operate on the recycling of used batteries and the refining of battery chemicals for recycle use.

The expanded partnership agreement follows a memorandum of understanding from July, 2023, that enabled Metso and Avalon to develop an innovative, sustainable methodology to produce commercial lithium hydroxide from petalite mineral feeds.

"Avalon is proud to import world-leading innovation and processing technology solutions to help ensure that Canada leads the net-zero economy of the future. This agreement is the next step in leveraging Metso's market-leading expertise and technology to build a processing facility that will serve as a regional destination, not just for Avalon's joint venture lithium deposit, but for other lithium projects across Northwestern Ontario -- thus unlocking the province's lithium resources for use in the expanding EV battery manufacturing base in Southern Ontario," said Zeeshan Syed, president of Avalon.

"The expanded scope of our partnership will create supply chain efficiencies and increase the value of previous investment commitments in the province of Ontario," Mr. Syed added.

Mikko Rantaharju, vice-president, hydrometallurgy, at Metso noted: "Metso is proud to partner with Avalon on their bold vision for Thunder Bay, and help co-create novel processing, training, recycling and research capacity. Metso has successfully worked with Avalon in this remarkable project to develop a sustainable process to produce battery-grade lithium using our proprietary alkaline pressure leach process. This agreement marks yet another key milestone between the parties as we advance forward to build a wide scope of economic benefits for the future."

Innovative, sustainable processing

Through the R&D (research and development) efforts undertaken by Avalon and Metso, the proprietary lithium hydroxide process represents a far more sustainable conversion method compared with conventional acid roasting. The process operates in an alkaline state and utilizes pressure leaching, which is unique for lithium conversion, eliminating the use of sulphuric acid, and with no production of sodium sulphate as a byproduct. Instead, a substance called analcime -- an inert solid aluminum silicate -- is produced, as well as calcium carbonate. Importantly, both substances have commercial uses in industrial building applications and other industries. The method also reduces overall air emissions compared with conventional lithium processing.

In addition, this process is expected to be a safer for operating personnel, the environment and the community in general compared with the traditional acid roasting method, which is used in jurisdictions with less stringent commitments to environmental safety and stewardship compared with North America.

The planned Thunder Bay processing facility and Avalon's upstream joint venture lithium project, located near Kenora, Ont., are expected to create an estimated 500 full-time 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 is also expected to help foster new economic development opportunities for local and regional indigenous communities.

The company anticipates the Thunder Bay facility to commence commercial activity in 2028.

Technology and innovation centre (TIC)

Avalon and Metso are also planning to co-develop, along with regional educational institutions such as Lakehead University and Confederation College, a technology and innovation centre on site to conduct research and development in the areas of critical minerals and clean technologies, which will contribute to Canada's transition to a net-zero economy.

The TIC intends to house the following:

• A bench-scale testing lab for research and development on lithium and clean technology;
• An assaying lab for research analysis and daily assaying of production and performance;
• A full demonstration plant for piloting, testing and verification of various lithium pegmatite minerals;
• A training facility to support the full-scale commercial process, furthering the Sustainable Jobs Act announced in June of this year to create the net-zero work force of the future.

Metso has further agreed to provide instructional training for testing, investigation, design and engineering to maximize the recycling of waste product, as well as determine new uses in other industrial applications. Over all, this initiative will support Avalon's commitment to minimizing environmental impacts and accelerate Canada's environmental leadership on the world stage.

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 NV, is currently developing its Separation Rapids lithium deposit near Kenora, Ont., while also continuing to advance the Lilypad and Snowbank lithium projects located near Fort Hope, Ont. Avalon is also working to develop its Nechalacho rare earths and zirconium project located in the Northwest Territories. This deposit contains critical minerals for use in advanced technologies in the communications and defence industries among other sectors.

In addition to these upstream activities, Avalon is also executing on a key initiative to develop Ontario's first mid-stream lithium hydroxide processing facility in Thunder Bay, Ont., a vital link bridging the lithium resources of the north with downstream EV battery manufacturing customers and markets in the south. Social responsibility and environmental stewardship are corporate cornerstones.

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