Avalon Advanced Materials announced on November 18 that it has successfully acquired CAD $3.5 million ($2.50 million) in convertible debenture financing from its significant shareholder, SCR-Sibelco NV.

This new investment strengthens Avalon's position to advance exploration and development activities at its key assets. It will use the funds to develop its Lake Superior Lithium Project in Thunder Bay, Ontario and Nechalacho Rare Earths and Zirconium Project in the Northwest Territories. The proceeds will also support general corporate operations.

This loan, due on November 18, 2026, carries a 7.5% annual interest rate. If Avalon cannot repay the loan, Sibelco can choose to either convert it into Avalon's common shares or into shares of their joint venture, Separation Rapids Ltd. The latter option would significantly increase Sibelco's ownership in the joint venture, reducing Avalon's stake. To secure the loan, Avalon has pledged its shares in the joint venture as collateral.

Sibelco's additional funding increases their total debenture commitment to Avalon to CAD $6.5 million ($4.64 million). This demonstrates their continued confidence in Avalon's strategy to become a key player in the critical minerals space.

Scott Monteith, CEO and Director of Avalon, commented on the significance of the financing, particularly for the Lake Superior Lithium Project. "We are preparing our new Mineral Resource Estimate at the Separation Rapids JV project, and this new funding will enable us to accelerate the technical studies on our Lake Superior Lithium Project."

Avalon has already secured positive results from a Preliminary Economic Assessment (PEA) on the project, demonstrating its potential for significant economic benefit.

Potential increase in Sibelco's ownership of SRL

If the entire debenture is converted into SRL shares, Sibelco's ownership stake in the joint venture would increase to 90%, with Avalon retaining a 10% interest.

Commitment to Ontario's lithium supply chain

Avalon is actively pursuing both provincial and federal funding to support the development of their Lake Superior Lithium Project. This project aligns with their strategic goal of vertically integrating the Ontario lithium supply chain.

About Avalon Advanced Materials Inc.

Avalon is a Canadian company focused on developing a complete lithium supply chain in Ontario. They are currently advancing several lithium projects and a rare earths project in the Northwest Territories. In addition, they are working to establish Ontario's first lithium hydroxide processing facility.

About SCR-Sibelco NV

Sibelco is a global leader in material solutions, specializing in high-purity industrial minerals. They are a key partner for Avalon in the development of the Separation Rapids lithium project.