An anonymous director reports

AVALON ADVANCED MATERIALS INC. COMPLETES COMMON SHARE CONSOLIDATION

Avalon Advanced Materials Inc. has completed, effective July 8, 2026, a consolidation of the common shares in the capital of the company outstanding on the basis of 180 preconsolidation common shares for every one postconsolidation common share. The consolidation was previously approved by the company's shareholders at its special meeting of shareholders held on June 29, 2026, and the 180 to one consolidation ratio approved by the board of directors of the company is within the previously disclosed range of ratios authorized by the shareholders at the meeting. The consolidation is intended to provide the company with a more conventional capital structure and support its continuing evaluation of broader capital market opportunities, including a potential future U.S. exchange listing.

Notice of the consolidation has been provided to the Toronto Stock Exchange. The common shares will continue to be listed on the TSX under the symbol AVL and on the OTCQB Venture Market under the symbol AVLNF except that for approximately 20 trading days after the implementation of the consolidation, the company's symbol on the OTCQB may display as AVLNFD. The common shares are expected to begin trading on a postconsolidation basis on the TSX on or about July 13, 2026. Following the consolidation, the new Cusip number for the common shares is 05337L502, and the new ISIN for the common shares is CA05337L5027.

As a result of the consolidation, the 835,628,796 common shares that were issued and outstanding prior to the consolidation have been reduced to approximately 4,642,382 common shares (disregarding the treatment of any resulting fractional common shares). Each shareholder's percentage ownership in the company and proportional voting power remain unchanged after the consolidation, except for minor changes and adjustments resulting from the treatment of any resulting fractional common shares. The company will not be issuing fractional postconsolidation common shares. Where the consolidation would otherwise result in a shareholder being entitled to a fractional common share, the number of postconsolidation common shares issued to such shareholder will be rounded down to the nearest whole number of common shares, and such shareholder will be entitled to a cash payment in lieu of the fractional interest to which the shareholder would otherwise be entitled equal to such fractional interest (which for greater certainty will be equal to the number of preconsolidation common shares that would otherwise result in the fractional postconsolidation common share) multiplied by the closing price of the common shares, as reported by the TSX, on the last trading day prior to the effective date of the consolidation. The closing price of the common shares on the TSX on July 7, 2026, the last trading day prior to the consolidation, was 4.5 cents.

Shareholders who are entitled to a cash payment of $5 or more will be, after submitting any physical share certificates they hold, a letter of transmittal and any other documentation required by the exchange agent (as defined below) to the exchange agent, automatically mailed a cheque by the exchange agent. Shareholders who are entitled to a cash payment of fewer than $5 may contact the exchange agent at TSX Trust Company, Suite 301, 100 Adelaide St. West, Toronto, Ont., M5H 4H1, telephone number 416-342-1091 or toll-free in North America at 1-866-600-5869 for more information on how to obtain their cash payment.

The company's transfer agent, TSX Trust Company, will act as the exchange agent for the consolidation. In connection with the consolidation, the exchange agent has sent a letter of transmittal to registered shareholders holding their common shares in certificated form to exchange their old share certificates for direct registration statements or share certificates, in accordance with the instructions provided in the letter of transmittal. Registered shareholders will be able to obtain additional copies of the letter of transmittal through the exchange agent. Until surrendered, each certificate representing preconsolidation common shares will represent the number of whole postconsolidation common shares to which the holder is entitled as a result of the consolidation. Shareholders that hold their common shares through physical share certificates will need to submit their share certificates, a letter of transmittal and any other documents required by the exchange agent to the exchange agent prior to the third anniversary of the effective date to receive any cash payment to which they are entitled.

Registered holders holding their common shares by way of a direct registration system advice/statement and non-registered beneficial holders holding their common shares through intermediaries (securities brokers, dealers, banks and financial institutions) will not need to complete a letter of transmittal. Non-registered beneficial holders holding their common shares through an intermediary should note that such intermediaries may have specific procedures for processing the consolidation. Shareholders holding their common shares through such an intermediary and who have any questions in this regard are encouraged to contact their intermediary.

The exercise or conversion price and the number of common shares issuable under any of the company's outstanding convertible securities will be proportionately adjusted to reflect the consolidation in accordance with the respective terms thereof.

About Avalon Advanced Materials Inc.

Avalon is a Canadian critical mineral company focused on advancing lithium and rare earth elements -- two of the fastest-growing segments of the global energy transition. The company is developing strategic assets to participate in high-growth markets and support the buildout of secure North American supply chains. Avalon is advancing the Nechalacho rare earth element and zirconium project in the Northwest Territories, which contains all light and heavy rare earth elements, as well as yttrium, zirconium, tantalum and niobium -- critical minerals used in advanced technologies across the communications, defence, advanced technologies and energy sectors. The company is also focused on vertically integrating the Ontario lithium supply chain through the development of Lake Superior Lithium Inc., Ontario's first mid-stream lithium hydroxide processing facility, located in Thunder Bay. This facility is expected to serve as a cornerstone of North America's integrated battery material supply chain, transforming Northern Ontario lithium into essential inputs for transportation, grid storage and advanced manufacturing.

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