Interview with Donald Bubar, P.Geo. and CEO, Avalon Advanced Materials Inc. (TSX: AVL, OTCQB: AVLNF): Uniquely Positioned for Supplying Lithium Battery Materials and the rare lithium mineral, Petalite, for high-strength Glass-Ceramic Manufacturers
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 10/15/2022
We spoke with Donald Bubar, who is a Professional Geologist and CEO of Avalon Advanced Materials Inc. (TSX: AVL, OTCQB: AVLNF), a Canadian mineral development company, specializing in sustainably produced materials, for clean technology. The Company now has four advanced stage projects, providing investors with exposure to; lithium, tin and indium, as well as rare earth elements; tantalum, cesium and zirconium. Avalon is currently focusing on developing its Separation Rapids Lithium Project near Kenora, Ontario, while continuing to advance other projects, including its 100%-owned Lilypad Cesium-Tantalum-Lithium Project located near Fort Hope, Ontario. The Company has just announced that they entered into an off-take agreement, for petalite concentrates, from a major, non-Chinese, international glass-ceramics manufacturer. There is now considerable interest from other major glass ceramic manufacturers, in Europe and Asia, as there is presently a global shortage of petalite supply, after China took control of the traditional petalite supply sources in Zimbabwe.
Avalon Advanced Materials Inc. (TSX: AVL, OTCQB: AVLNF)
Dr. Allen Alper:
This is Dr. Allen Alper, Editor-in-Chief of Metals News talking with Don Bubar, President and CEO of Avalon Advanced Materials, Inc. Don, this has been a fantastic week for you. A lot of your hard work is paying off and you have had an opportunity to announce it yesterday and today. Why don’t you update our readers/investors on what's going on with Avalon Advanced Materials?
Don Bubar:
Well, we are focused on advancing our Separation Rapid Lithium Project to production. Now we are in a good position to create a lithium hydroxide supply for lithium battery materials markets and a supply of the rare lithium mineral petalite, for the many glass-ceramic manufacturers, around the world, that are looking for a new supply. With the MOU we've recently signed with LG Energy Solution, we're now in a good position to move forward on the refinery plan, to produce lithium hydroxide going forward.
Dr. Allen Alper:
That's fantastic! That is a growing market, and it's great that you are in this position. I know you've worked hard, over the years, to get there. Why don't you tell our readers/investors, a little bit more about the project and what your goals and plans are?
Don Bubar:
Well, basically, it's been all about defining what the product is going to be and then scaling the operation appropriately. We've had some vision for awhile that we could get started by producing the concentrates for the glass ceramic manufacturers. Now we're in a pretty good position to be able to get that started in a year or so at a modest scale because they always want to have a trial quantity of the product before they'll give you a firm commitment on their future needs. Then while we're doing that, hopefully we'll be able to get ourselves finalized on the process flow sheet and the feasibility study for the lithium battery materials refinery and get going on initiating construction next year so we can start producing lithium hydroxide in late 2025.
Dr. Allen Alper:
Well, that sounds excellent. From my understanding of your news release today, you have an offtake agreement with a large international glass manufacturer for your petalite.
Don Bubar:
Yeah. We now have one offtake agreement, with a firm commitment on it, and then lots of other expressions of interest. As I mentioned in the news release, there's now a global shortage of petalite to serve that sector and we have one of the very few significant resources of petalite anywhere in the world that China doesn't control.
Dr. Allen Alper:
That's fantastic. Could you tell us about what your plans are for the remainder of 2022 going into 2023?
Don Bubar:
Well, the next big step for us is to close the deal we've been working on, to acquire an industrial site in Thunder Bay that would be the location for a lithium battery materials refinery. We're close to getting that done now. Once we have that site, I think that will even provide more incentive for potential investing partners to work with us on getting it going. We do have lots of other interest now, including from Essar, the Indian company that we signed the Letter of Intent with back in April.
Dr. Allen Alper:
That's very good. Could you just say a little bit about the importance of lithium and something about supply and demand of lithium, going forward, for use in electric vehicles?
Don Bubar:
Well, lithium continues to be the critical material needed in all energy storage technologies. With the rapid transition to clean energy alternatives, the demand continues to grow rapidly. Creating the supply now, is the key next step. But as has often been pointed out, to get the supply of the battery material product, lithium hydroxide or carbonate, the key step is creating the midstream processing capacity that can take the lithium mineral concentrates and produce the battery material product; either lithium hydroxide or carbonate.
That's also the most expensive part of that whole production process. That's why we need to get good interest from the downstream to support access to the capital to be able to go ahead with establishing the process facility. Now that we have that interest from LG Energy Solution, I'm sure we'll have plenty of other support to get it going, so we can hopefully, be the first producer of lithium hydroxide here in Ontario, to begin to serve the emerging market here, of which LG is one of the players, with a plan to build a battery manufacturing facility, in southern Ontario near Windsor.
Dr. Allen Alper:
Well, that's excellent! Could you tell our readers about some of your other critical mineral projects?
Don Bubar:
We're still optimistic that we'll be able to finally get access to our East Kemptville Project in Nova Scotia to reactivate it. That's a good example of a closed mine site, where there's lots of value in the waste there. Lots of tin and a whole bunch of other elements, including lithium, which can now be recovered from the waste, while we remediate the long-term environmental liability.
There's growing interest in tin now too because it's now a technology metal that's needed in more and more new technologies, so demand is growing. The East Kemptville deposit, called a tin greisen, was the only ever primary producer of tin in North American history because these deposits are uncommon here. Getting it re-activated, to start to create that new tin supply, may enable more companies to start looking at the downstream value-added products from the tin, which makes a lot of sense to take advantage of, as we are now working with lithium in Ontario.
Dr. Allen Alper:
Excellent. Could you tell us about some of the other projects you have and rare earths.
Don Bubar:
Well, our rare earths project has been moving forward, with our Australian partner, Vital Metals, now getting the supply chain started, by producing the light rare earth mineral Bastnaesite from the near-surface resources there. It helped inspire the Saskatchewan Research Council to do more work on creating the capacity there, in Saskatchewan, for doing the rare earths separation. In addition to that, they are going to be able to produce the magnet metals (neodymium, praseodymium) that are needed to make high strength permanent magnets, for electric motors, etc.
So, it looks like we're on our way to getting that whole supply chain finally established, here in Canada. Ultimately, we hope that we can come along behind our Australian partner, to develop the Basal Zone resource that we originally defined there, over 10 years ago, and start producing some of those rare earths, which include a lot of the heavy rare earths, as well as zirconium, sometime in the not-too-distant future.
Dr. Allen Alper:
That would be excellent. There's a growing need for rare earths and it would be nice to have a strong western source in Canada for them.
Don Bubar:
Yeah, we have the resources. But as I was saying before, like lithium, the key next step is the processing capacity to process the concentrates to recover the element of interest. That's always been the hard part of rare earths, because you always have a whole bunch of them that occur together and are not that easy to separate.
Dr. Allen Alper:
That's great. Could you tell us a little bit about what's happening with your cesium deposit and project?
Don Bubar:
Well, that's our project, called Lilypad. It is in a remote location, north of Thunder Bay, with now current road access. But it looks like the province now is going to support funding for creating the transportation infrastructure and a road to the Ring of Fire. Lilypad is located not too far from the Ring of Fire, so we should be able to take advantage of that to get better access to the property and continue to define the cesium rich resources there.
We know there's a very significant cesium resource there already, with lots of potential for more. So hopefully we'll be able to get that going fairly soon too, because cesium is in very short supply, and we could start by producing trial quantities of the cesium mineral concentrates and then fly them out to Thunder Bay for further processing at our new lithium refinery there once we get it up and running.
Dr. Allen Alper:
Could you tell our readers/investors a little bit about what cesium is used for and how critical it is?
Don Bubar:
Well, because it's the most electro positive element, on the periodic table, any compound that it forms is very stable. That gives it lots of potential applications, in high strength glass, ceramic products and then a lot of aerospace technologies and many more things.
Dr. Allen Alper:
Sounds like you'll have some fantastic projects on deposits that you're working with. And it looks like now you're going to, or you have formed strategic alliances, with several companies that will help push those products forward. So, after a lot of hard work, it's coming to fruition.
Don Bubar:
Yeah. As I often say, it only took 25 years, but our time has finally come.
Dr. Allen Alper:
Well, that's great. It’s good that you have the patience, courage and the fortitude to keep working, keep exploring and moving those projects along and making the business contacts that you have been. Don, could you tell our readers/investors a little bit about yourself, your Team, and your Board?
Don Bubar:
Well, we're going to have to continue to expand our Team, going forward, to be able to move all these projects forward. We do have quite a bit of interest now, since everybody's getting more interested in participating in this new world of critical minerals, especially lithium. We don’t expect to have any difficulty attracting more people, to get involved, going forward.
Dr. Allen Alper:
It's great to have such a strategic and important project, in a great location. Could you tell our readers and investors a little bit more about your background? I'm sure my readers know, but we constantly get new readers/investors.
Don Bubar:
I'm a geologist that has been working in the industry, here in Canada, as an exploration geologist, for 47 years.
Dr. Allen Alper:
That's great. I know you have a great background and you've discovered great projects. Don, could you tell us a little bit about your share and capital structure?
Don Bubar:
Well, I got this Company reactivated, when it was a dormant shell, after I took control of it back in 1995. We've been relying on the equity markets to raise capital, ever since, so we now have a lot of shares outstanding, now just over 400 million. But it’s very widely held, it's not just in a few hands. We have well over 20,000 shareholders all over the world. Many of them have been shareholders for a long time too, going back to rare earth days, when we were the leader of trying to get a rare earths supply chain started here in North America. A lot of those shareholders, from then, have patiently waited for us to create some value through our other assets. That time has finally come, with our lithium assets.
Dr. Allen Alper:
It sounds like a lot of your hard work is beginning to pay off, so that’s excellent.
Don Bubar:
Finally. Yep. I saw the future, a long time ago, before anyone else did.
Dr. Allen Alper:
Well, you did! You had the foresight to understand what was happening, in rare earths, what was happening, with lithium deposits and your other strategic minerals, so you really had foresight. It took a little while for the market to kind of catch up to you and what you were doing. But you were a leader in this whole area. Don, could you tell our readers/investors, what are the primary reasons they should consider investing in your Company?
Don Bubar:
Well, we are a very advanced lithium equity and not really well appreciated for how far advanced we are, in terms of our market valuation right now. I think we represent a good investment opportunity for people looking for lithium equities that are not way overvalued, compared to how advanced they are right now. I think that's one of the main attractions, in looking at our Company, right now, as an investment opportunity. I think once we get more and more news flow, on advancing our project, the valuation should continue to increase.
Dr. Allen Alper:
Well, your Company is in a great position to supply the market. The market is growing and there's really a short supply of lithium, in electric vehicles. So, I think the timing now is great for your Company.
Don Bubar:
And a very big shortage of the lithium mineral, petalite, for glass ceramic manufacturers.
Dr. Allen Alper:
And you have a great deposit in a great location.
Don Bubar:
Yeah. So, I'm excited to be able to serve both markets going forward.
Dr. Allen Alper:
That's an excellent position to be in. Don, is there anything else you'd like to add?
Don Bubar:
I think that covers most of the recent news.
Dr. Allen Alper:
Excellent! We’ll publish your press releases as they come out, so our readers/investors can follow your progress.
https://www.avalonadvancedmaterials.com/
1901-130 Adelaide St. W.
Toronto, Ontario, Canada
M5H 3P5
+1 (416) 364-4938
ir@AvalonAM.com
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