Mr. Scott Monteith reports

AVALON REAFFIRMS COMMITMENT TO RESPONSIBLE CRITICAL MINERALS DEVELOPMENT WITH 12TH ANNUAL SUSTAINABILITY REPORT

Consistent with its long-established commitment to the sustainable development of Canadian critical minerals, Avalon Advanced Materials Inc. has published its 2023 sustainability report, which can be accessed on the company's website.

The 2023 report represents the 12th consecutive report Avalon has produced detailing its environmental impacts, health and safety reporting, and economic developments as they relate to Avalon's sustainability performance.

"It has been a year of transformative change for Avalon, led by a new senior management team and reinvigorated board aligned around the creation of a vertically integrated Ontario lithium value chain," said Scott Monteith, Avalon's chief executive officer. "What has not changed is Avalon's unwavering commitment to the highest standards of environmental stewardship, which can be seen in the many developments undertaken in the past 12 months. We are not talking, we are doing."

Two thousand twenty-three sustainability highlights:

• May -- appointment as CEO of Mr. Monteith, a veteran green-tech senior executive and entrepreneur.
• July -- strategic partnership with Metso Corp. of Finland, a global leader in sustainable processing technology solutions, to construct a best-in-class lithium hydroxide platform.
• October -- expansion of Metso partnership to create innovation and research laboratory, and to co-operate on the recycling of used batteries and battery chemicals.
• November -- new joint venture agreement finalized with SCR-Sibelco NV to form the Separation Rapids Ltd. subsidiary and import world-class mining processes to Avalon's flagship lithium deposit near Kenora, Ont.

In addition to detailing company developments, the 2023 sustainability report has transitioned to the new international financial reporting standards (IFRS) sustainability disclosure standards, a global framework which unifies and complements existing requirements to increase efficiency and comparability, and improve the overall quality of reporting. The company sees this as the new gold standard.

The report outlines the industry-based standards for metals and mining by the International Sustainability Standards Board (ISSB) of the IFRS foundation, and includes all relevant metrics and analysis applicable to Avalon's projects in 2023.

Under the company's revamped leadership, Avalon continues to embrace the principles of sustainability as core to its business practices and reaffirms its strong commitment toward implementing corporate social responsibility (CSR) best practices.

Indigenous partners

Avalon is committed to working closely with its indigenous partners to create lasting economic and social benefits in the communities in which the company operates. The Avalon management team recently completed the San'Yas Anti-Racism Indigenous Cultural Safety Training Program (Ontario) and received certification. Further, Avalon has developed and published its first land acknowledgement that reads as follows:

• "Avalon Advanced Materials Inc. acknowledges that our work takes place within the ancestral and traditional territories of first nations and Metis people. We respect indigenous rights and are committed to deepening our existing relationships while forging new lasting ties which will ensure that we, and future generations, benefit from the positive social and economic opportunities related to our operations."

Avalon's leadership, in applying the principles of sustainability in all of the company's work, is also benefiting the mineral exploration industry generally. Avalon is supporting the PDAC (Prospectors & Developers Association of Canada), the Ontario Mining Association and the Mining Association of Canada in their efforts to educate regulators and policymakers regarding the need to update regulations in order to encourage more and sustainable development of critical minerals resources in Canada that are vital for establishing the clean energy economy in North America, and to ensure access to land for exploration purposes.

Strategic update

On Dec. 7, 2023, Avalon announced a non-brokered private placement of up to a maximum of 93 million units of the company at a price of 10 cents per unit for aggregate gross proceeds of $9.3-million. Closing of the offering will occur in one or multiple tranches, with the first tranche of the offering now expected to close on or about Jan. 31, 2024.

The net proceeds of the offering are expected be used to finance: (i) site preparation and the preparation of a feasibility study for the corporation's Thunder Bay lithium hydroxide processing facility; (ii) the preparation of an updated feasibility study for the Nechalacho rare earths and zirconium project; (iii) repayment of the convertible debenture, including accrued interest thereon, to SCR Sibelco NV; and (iv) for working capital and general corporate purposes.

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 SCR Sibelco NV, is currently developing its Separation Rapids lithium deposit near Kenora, Ont., while also continuing to advance the Snowbank lithium project nearby and its Lilypad lithium-cesium project located near Fort Hope, Ont. Avalon is also working to develop its Nechalacho rare earth and zirconium project located in the Northwest Territories. The 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 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 (electric vehicle) battery manufacturing customers and markets in the south.

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