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A Strong Lithium Play with a Clearly Canadian Focus

Dave Jackson Dave Jackson, Stockhouse
3 Comments| December 7, 2021

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Environmental sustainability while maintaining profitability and shareholder value are the hallmarks of any modern, forward-thinking company. This is especially the case in the critical minerals space. And exploring and developing strategic lithium reserves outside of the Lithium Triangle in South America is now directly on the radar for several companies, not the least of which is Avalon Advanced Materials Inc. (AVL) (TSX.AVL, OTC: AVLNF, Forum) – a Canadian mineral development company focused on metals and minerals for use in clean energy and new technology.

Avalon’s extensive experience with critical minerals and commitment to sustainability puts the company in a unique position to utilize its resources and expertise in extraction techniques to establish new critical minerals supply chains in North America. Currently, the company has three projects in advanced stages of development providing investors with exposure to lithium, cesium, tantalum, indium, tin, zirconium, and the rare earth elements. But it is lithium and a very intriguing project in Northwestern Ontario that is Avalon’s top priority right now.

With mining-friendly Ontario now committed to establishing increased electric vehicle (EV) and battery manufacturing capacity in the province, there is now an opportunity for metals & mining investors to take advantage of the mineral resource wealth in northern Ontario to build out the entire supply chain. Ontario has abundant resources of all the minerals needed for lithium battery materials, including lithium, cobalt, graphite, nickel, and manganese. Many of these critical mineral resources can be developed with minimal adverse environmental impacts and a low carbon footprint. Today, there are over 100 known lithium pegmatite occurrences in northern Ontario alone.

Avalon is now very well-positioned to become a major new supplier of domestic, sustainably-produced critical minerals – and primarily lithium – starting with its Separation Rapids Lithium Project.

“The White Gold for Green Batteries”

Beyond EV battery applications, the high-purity mineral form, called petalite, is a rare lithium aluminium silicate mineral found at Separation Rapids that is still the preferred form of lithium for many glass-ceramic applications and continues to be in high demand. According to the company, the key is being able to provide potential customers that have expressed interest with trial quantities of the product that meets their required specifications. Avalon is presently working on this and plans to process a large bulk sample for this purpose in 2022.

The company says Separation Rapids can also be developed with the flexibility to produce several lithium products which can simultaneously and sustainably serve both the battery and glass-ceramic markets. Avalon's unique business model involves the sales of petalite concentrates for glass-ceramic markets while preparing to serve the battery market, after a processing facility can be established to produce a refined lithium battery material, such as lithium hydroxide.

Avalon is now planning to establish a lithium battery materials refinery in Thunder Bay, Ontario that would not only allow Avalon to begin serving the rapidly growing lithium battery market but would be designed to accept other lithium minerals concentrates from the many potential new supply sources in Northern Ontario. Avalon plans to establish this operation as a separate business with investing partners interested in securing a supply of the product and has had many expressions of interest from international end-users looking for a new reliable long term supply source.

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In the News

On November 30th, 2021, Avalon released its tenth annual comprehensive sustainability report, along with its 2021 annual filings including the audited financial statements.

Avalon President and CEO, Don Bubar commented on the significance of this report to both shareholders and potential Investors:

"Avalon is very much on the forefront of sustainable best practices in mineral development, with a strong track record and a forward-thinking management team that makes sustainability a priority. The concept of extracting value from historic mine wastes while fully remediating the long-term environmental liability, that we have been advocating for many years, is now recognized as an opportunity to establish the circular economy in the mining industry. Avalon's East Kemptville Tin-Indium Project is well-positioned to provide a first precedent for this model in Canada."

Another of Avalon’s projects is the 100%-owned Lilypad Cesium-Tantalum-Lithium project near Fort Hope Ontario, located in the traditional territory of the Eabametoong First Nation. The property had been inactive for nearly 20 years but was re-activated in 2020 in response to the need to establish new cesium supply chains, due to news of a global shortage of supply of cesium. The property was originally explored for tantalum, but Avalon’s work program in 2001-2002 ended up discovering more cesium than tantalum, and a significant preliminary cesium resource was delineated in one of the many cesium-tantalum-lithium mineralized pegmatites on the property.

In September 2021, the Company reported cesium assay results from grab samples at its Lilypad project. Assays of rock samples received to date have confirmed significant cesium values in four Lithium-Cesium-Tantalum dykes on the property with three samples assaying greater than 1% Cs2O.

CEO Don Bubar had this to say about the project:

“The Lilypad Cesium Project is proving to be a globally unique example of a large field of cesium-enriched LCT pegmatite dykes with significant resource potential. With cesium continuing to be in very short supply, the Company is now well positioned to help Ontario become the new global leader in cesium production including innovation of new downstream applications.”

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From the CEO

In conversation with Stockhouse Editorial, Avalon’s President and CEO, Donald S. Bubar, M.Sc., P. Geo, explained his company’s one-of-a-kind approach to exploration and development of minerals for clean technology and what investors can expect from the company moving forward.

SH: To start off with, can you update our investor audience and your Avalon Advanced Materials shareholders on any new company developments?

DB: We've been basically a leading player in this whole space of non-traditional commodities, now commonly referred to as critical minerals, for a long, long time and have a diversified asset base that gives us exposure to not just lithium, but rare earths, zirconium, tantalum, cesium, indium, gallium; a whole basket of them! We never anticipated that they'd all be in high demand at the same time, but that is in the category of nice problems to have. It's certainly keeping us busy, trying to prioritize what we want to do next, but obviously the lithium project is taking priority with all of the new interest here in Ontario in getting new battery materials supply chains established here. Now, if you follow the news, you know, the Ford government is talking about how they want to support getting the whole electric vehicle manufacturing sector established Ontario, along with the battery manufacturing and good on them.

SH: There are a lot of companies entering the ‘clean metals’ space…specifically lithium. What differentiates Avalon Advanced Materials from the competition and makes your vision and high growth business model unique?

Click to enlargeDB: Our vision continues to be, to establish a central facility in Thunder Bay to take advantage of it being centrally located with good transportation infrastructure. We would develop as a separate business that could not only process concentrates that we produce but serve as a refinery to process concentrates from other aspiring producers in Ontario. There's no shortage of other lithium resources in Northern Ontario, but in every case, you got to have somebody that'll buy the mineral concentrate to turn it into the derivative products that are needed in the marketplace. So I see that as the way to go here and once we get it started, it will be a growth business. No doubt about it!

SH: In terms of the Separation Rapids project in Thunder Bay, a lot of our retail investor default to the High Andes in South America and the salars in the Lithium Triangle there. What is it about this project in Thunder Bay that should raise eyebrows?

DB: Well there's lots of lithium resources in in Northern Ontario and obviously they're geologically different than the brines and salars (in the High Andes), but they're all self-contained with much higher concentrations of lithium. And, in many cases, can be recovered very efficiently at a relatively low cost. And that's one of the things we've been working on is how to extract and concentrate the minerals using new processing technologies that keep your costs down and minimize the use of water and chemical reagents.

SH: In terms of the mining operations for lithium in Northwestern Ontario, what's the methodology of mining and extracting, is it surface-grade or is it a deeper dig?

DB: Well, there are many of these resources that are well exposed right at surface, but variable in terms of mineralogy, size, and width. But if there's a facility in the region that can buy the concentrates to turn them into the battery materials, then you don't have to necessarily develop it at a very large scale. You can develop it as a small quarry operation too, and then use something like sensor-based ore sorting, dry processing to concentrate the lithium minerals. And in many cases, most of the other minerals in the resource are also potentially usable in other applications.

SH: The company recently received initial assay results from grab samples collected at your early-stage Lilypad Cesium-Tantalum-Lithium Project 350 kilometres north of Thunder Bay. Can you walk us through some of the numbers?

DB: The assay results provided further encouragement that there are many more cesium-tantalum enriched pegmatites to be fully delineated on the property. We were also encouraged to learn that the cesium-rich Pollucite Dyke extends much further west than originally understood meaning it is likely much larger than the resource defined by our drilling 20 years ago. Next steps are to do more drilling.

SH: Can you discuss the long-term strategy for the company moving into 2022 and beyond?

DB: Avalon’s strategy for our lithium project is to get production started next year at a small scale by producing petalite concentrates for the many glass-ceramic manufacturers that have expressed interest, while working towards getting the battery materials refinery up and running then scale up production of petalite concentrates to begin supplying the refinery. We are also working to get our East Kemptville Tin-Indium Project re-activated with a model to recover tin and other critical minerals (including lithium) from the wastes, while remediating the long-term environmental liability.

SH: And finally, Don, I have to mention your stock has had a bit of a roller coaster ride over the past 12 months. What can you tell our investor audience regarding the current valuation of your stock and why you think it’s a good buy right now?

DB: Yes, it is undervalued at the moment especially compared to the valuations of many of our peers with a lithium focus. I think this is partly because many investors still know Avalon primarily as a leader in rare earths with our advanced Nechalacho Project and are unaware of our advanced lithium project probably because the word lithium is not in our name!

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FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.

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