Avalon Advanced Materials Inc T.AVL

$63M funding for Avalon...

[GUNSS]

Today's news is bigger than it seems at first blush. This virtually eliminates any funding concerns for quite some time. The funding partner is no Rio Tinto, but is a real company with 2 billion euros in sales in 2022 (up 20% from 2021). Net cash (total cash minus total debt) was about C$60M. EBITDA was up 25% year over year. 

This is an important deal for the funding party Sibelco who's a leading materials company in Europe. Unlike many Li juniors who would have loved to sign a deal like this with Avalon, Sibelco should have little trouble funding the approx. C$50M cap-ex requirements to earnna 60% interest in Avalon's Li portfolio.

Importantly, the C$10M equity raise with Sibelco has no attached warrants. I estimate a full warrrant on this raise would have been worth C$0.05/warrant. So, Avalon avoided C$5.5M in funding costs [109M warrants not issued x C$0.05/warrant].

All of this extra cash liquidity, incl. a C$3M convertible loan, the C$10M eq. raise & C$50M in work committments mean that Avalon should be free-carried for probably two years. Also, I just noticed that the convertible bond is not convertible until the maturity date, so with any luck it is just a straight bond for C$3M with a low 7.1% coupon. That's cheap funding for a small cap! 

This transaction signals that the land purhcase in Thunder Bay must be imminent. That will de-risk this story even further. WIth all of this liquidity and possibly more liquidity if they monetize other non-lithium assets, Avalon can acquire, JV or farm into additional Li properties across Canada. 

I like what I see. Trading volume today will be 15x the daily avg on stockwatch. Over 7M shares, some new shareholders with a cost basis above 12c. And, new mgmt. team members. I wonder if insiders are buying after today's news, if they're allowed to?

[Nick1969]

THIS is only the beginning . Expect major , quick  and profitable developments in the months /years ahead. This is what we have been waiting for..

[GoldenIdle]

I still own Avl , I thought about selling last few months ... but long and Strong Avalon!!

[Nick1969]

Stick around..The best is yet to come and we won't have to wait too long..