Mr. Scott Monteith reports

AVALON AND SIBELCO ESTABLISH JOINT VENTURE TO DEVELOP FLAGSHIP LITHIUM MINE IN ONTARIO

Following previous announcements made on June 15, 2023, and Nov. 2, 2023, Avalon Advanced Materials Inc. and SCR-Sibelco NV have closed their joint venture transaction. The new joint venture company, Separation Rapids Ltd. ("SRL"), has a mandate to advance mining activities at the flagship Separation Rapids deposit near Kenora, ON, as well as at the Lilypad Project located near Fort Hope, ON.

SRL is jointly owned by Sibelco (60%) and Avalon (40%) and is well positioned with a unique dual-market strategy to supply petalite-lithium to both the global glass & ceramics industry, as well as to the North American EV battery manufacturing market.

Agreement Highlights

SRL, the new joint venture company, will own and work to commercialize the mineral assets at Separation Rapids and Lilypad.

Sibelco has the sole funding responsibility for the first euros34.8 million (approximately C$50 million) of joint venture operations expenditures.

Mineral output of petalite-lithium at Separation Rapids is expected to be sufficient to supply both the global glass & ceramics and North American EV battery markets.

For Avalon, this transaction represents an exciting new path towards generating revenue from long held assets and unlocking real value for shareholders.

"Establishing this exciting new joint venture achieves a significant objective in our evolution as a clean energy company and enables the unique petalite deposit at Separation Rapids to be commercialized at a pace that will help position Canada in important international markets," said Scott Monteith, Avalon CEO. "We are unlocking the potential of Separation Rapids and other projects, and in so doing, taking another key step in establishing the end-to-end lithium supply chain we envision for Ontario."

Separation Rapids

Located 70 kilometers north of Kenora, ON, Separation Rapids is a flagship deposit of petalite-lithium which in addition to its traditional uses in the glass & ceramics markets can, using new innovative technology processes, also economically yield EV battery-grade lithium at scale. On August 10, 2023, Avalon released an updated Mineral Resource Estimate ("MRE") for Separation Rapids, conducted by SLR Consulting (Canada) Ltd., an independent global mining advisory and consulting firm. The MRE revealed a measured and indicated deposit 20% larger than earlier estimates. The MRE, compliant with NI 43-101, showed a measured and indicated resource of 10.08 million tonnes (Mt) of petalite, grading on average 1.35% Li2O. The resource is primarily from an open pit, while a smaller amount is from an underground resource. A new $3.6 million drilling program commenced on September 26, 2023, which will seek to upgrade the amount of inferred ore to indicated, and add more resource to the deposit as well as perform geotechnical drilling within the pit area. The drill program is expected to be completed by February 2024.

Antwerp-based Sibelco is an international leader in the glass & ceramics market, with deep expertise in the mining, processing and recycling ofspecialty industrial minerals.

"Separation Rapids represents a unique opportunity for Sibelco to enhance a core business we know extremely well, while at the same time, provides us with an entry into the promising North American EV battery market," said Ian Sedgman, Sibelco's Chief Strategy and Business Development Officer.

"It is a dual-market strategy we are confident will create long-term value for all stakeholders."

Lilypad Project

Located near Fort Hope, ON the Lilypad Project consists of claims totaling over 3,299 hectares (8,152 acres) of lithium, tantalum and caesium mineralized pegmatites. Lithium pegmatite occurrences have been discovered in the area as spodumene and lepidolite. Encouraging for the future development of the Project is the fact that significant mineral discoveries to the north (Ring of Fire) have prompted the development of road access. This will greatly enhance the economic viability of any mineral deposits in the region, including Lilypad. Economic resources of caesium are very rare and Lilypad represents one of the very few known significant occurrences of this mineral in the world. With declining production from traditional sources, new producers are needed for this scarce advanced material to meet growing demand.

About Avalon Advanced Materials Inc.

Avalon Advanced Materials Inc. is a Canadian mineral development company focused on vertically integrating the Ontario lithium supply chain. The Company, through its new joint venture with SCR Sibelco NV, is currently developing its Separation Rapids lithium deposit and Snowbank project both near Kenora, ON, and its Lilypad lithium-caesium project located near Fort Hope, ON. 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 defense industries among other sectors.

In addition to these upstream activities, Avalon is executing on a key initiative to develop Ontario's first midstream lithium processing facility in Thunder Bay, ON, a vital link bridging the lithium resources of Ontario's northwest with downstream EV battery markets and manufacturing customers in the south. Social responsibility and environmental stewardship are corporate cornerstones. Avalon is listed on the TSX: AVL and OTCQB: AVLNF.

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