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Avalon Advanced Materials Inc. (TSX: AVL, OTCQB: AVLNF): Developing Separation Rapids Lithium Project, Re-Activating Cesium-Tantalum-Lithium Project and Recovering Critical Minerals from Historic Mine Wastes; Don Bubar, President and CEO Interviewed

on 5/12/2021
Avalon Advanced Materials Inc. (TSX: AVL, OTCQB: AVLNF) is a Canadian mineral development company, specializing in sustainably produced materials for clean technology. Avalon is currently focusing on developing its Separation Rapids Lithium Project, near Kenora, Ontario, while looking at several new project opportunities, including re-activating its 100%-owned Lilypad Cesium-Tantalum-Lithium Project, in northwestern Ontario. We learned from Don Bubar, who is President and CEO of Avalon Advanced Materials that the Company is committed to producing critical minerals, for clean technologies, in sustainable ways, including from historic mine wastes. Plans for 2021 include more metallurgical testwork, on its Separation Rapids lithium bulk sample, to finalize process flowsheets and produce samples of the product for interested customers, as well as re-activating our Lilypad Project, with a focus on its cesium potential.

Avalon Advanced Materials Inc.

Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, talking with Don Bubar, who is President and CEO of Avalon Advanced Materials, Inc. Don, could you talk about your participation in the Wall Street Green Summit panel on sustainable mining and about Avalon Advanced Materials and the situation with critical minerals? Also discuss the role Avalon is playing in this arena.

Don Bubar: Sustainable mining is a general theme and encompasses a number of aspects of what we're doing. Number one we are trying to produce these critical minerals for clean technologies, in sustainable ways that are very ESG friendly (ESGI, in Canada now to include Indigenous). It requires more innovation, in terms of extraction processes, and more R&D on how we can better use some of these more obscure elements, in the periodic table, in beneficial ways, in clean technology. That helps create the demand to justify creating a supply, to serve the needs in clean technology.

It just makes sense to produce them in sustainable ways. We have the opportunity now to look at historic mine wastes as opportunities to recover some of these non-traditional commodities, that were often present in mineral deposits, mined in the past for one traditional commodity, but weren't recognized as having any value and just went into the waste. One example we have been looking at for 15 years is the old East Kemptville tin mine, in southwestern Nova Scotia, which closed prematurely in 1992 after a drop in the price of tin. Such tin resources also contain other critical minerals, including indium, gallium, germanium and even lithium, where there are opportunities to recover these elements from the wastes, using new more efficient recovery processes, remediate the long-term liabilities while you do it, and contribute to the circular economy. The mining industry hasn't been thought of as being able to participate in the circular economy, but this is certainly one way that it can.

Dr. Allen Alper: That sounds like an excellent approach for the environment and for mining, making available critical elements. Don, could you also give our readers/investors an overview of Avalon Advanced Materials and touch on some of the critical minerals you are exploring for and developing?

Don Bubar:Avalon is a Canadian mineral development Company, based in Toronto, with most of our assets in Canada and northern Ontario, where we have been in business for 26 years. We first started looking at these non-traditional commodities, like lithium, cesium, and tantalum 25 years ago. Maybe it was a bit early then, but it looks like our time has come. We're generally recognized as one of the leaders here now, in trying to initiate these critical minerals supply chains. We learned along the way that a lot of the challenges, are just timing in terms of being ready to serve new demand in the market often created by new applications for critical minerals in clean technology. You need to be positioned, with a resource that you can get started quickly, in order to be able to meet that new demand.

We learned that the hard way, over the years and now realize that a good strategy would be to have a diversified asset base that would give us exposure to a broad range of these critical minerals, so that we could react more quickly to a sudden surge in demand for one of these minerals, often triggered by new technology. That is the approach we are taking and why we've re-branded the Company as Avalon Advanced Materials to reflect our diversified approach and focus on new technology. But I guess we really couldn't anticipate that they'd all be in demand at the same time. That's the circumstance we are in right now, kind of a nice problem to have. We have potential to bring along new supplies of all the ones we've been working on in the past, including rare earth elements.

Dr. Allen Alper: That sounds excellent. I know you have an advanced lithium project, as well as rare earths. You also have rare earths, cesium and tantalum opportunities. I wonder if you could update our readers/investors about those projects.

Don Bubar: On our Nechalacho rare earths project, in the Northwest Territories, we brought in an Australian company as kind of a partner and sold them a satellite deposit there, so they could get started as a small operation, to initiate creation of a rare earth supply chain in Canada, at a relatively modest scale, using a new more efficient extraction technology, called sensor-based ore-sorting. They have that underway now. They just had a site visit recently, for mainstream media and received quite a bit of good publicity that it's being developed in sustainable ways and can help start this new supply chain here in Canada. That was our vision for it; start at a small scale to create an initial supply and then expand production over time as demand grows. We've hung on to the original Basal Zone resource there, with that vision in mind. Once they get production started, we can eventually come in behind them and collaborate on a scaled-up operation.

Our Separation Rapids lithium project now is creating a near-term development opportunity for us, for sure. Our project is a fairly unique one, in terms of the mineralogy on how lithium occurs there. It's mainly in a relatively rare, high-purity lithium mineral, called petalite, that has traditional markets in specialty glass products, as well as new potential for making lithium battery materials.

We have opportunities to serve the glass-ceramics market, which is also growing as companies continue to innovate new forms of high-strength glass products. Lithium is typically one of the critical ingredients in these products and the mineral petalite is an ideal way to introduce lithium into the batch formulation. That opportunity is coming along nicely. We've recently taken a large bulk sample, so we can have more material to work with on confirming our process flow sheets, firm up what exactly the operation will look like and then start to market the product so we can attract the capital and get it going.

There is also growing interest in establishing lithium battery material supply chains here in North America and there's an obvious opportunity for us to participate in helping get it established. We're looking at a model, involving collaborating with other lithium explorers, on establishing a lithium battery materials refinery, in a central location in northwestern Ontario. The City of Thunder Bay on Lake Superior, with excellent transportation infrastructure, could serve as a central hub for processing concentrates, not only from our operation, but from other aspiring lithium minerals producers, in northern Ontario. There are lots of potential resources that could be developed, over the long term, to create additional supply for a refinery located there.

Part of our thinking is to create new economic development opportunities, in northern Ontario, for Indigenous communities, to help in creating these supply chains and participate more in the new clean economy.

Dr. Allen Alper: Excellent. What are your key plans for that project in 2021?

Don Bubar: Doing more process test work, with all these materials, is all about creating an efficient extraction process and then an efficient process for making the derivative products that will meet the needs of your customers. We need to do a little bit more work on that, that's why we extracted this bulk sample so we can do that, both for the battery materials and for the markets in glass ceramics.

Dr. Allen Alper: Sounds excellent. Could you tell us about some of your other projects, Cesium and Tantalum projects?

Don Bubar: Our cesium tantalum project, called Lilypad, is in northwestern Ontario as well, but in a little bit more remote location near the Ring-of-Fire. That's another one we've had for a long time that was originally explored for tantalum 20 years ago. There was a surge in demand for tantalum at that time and we had interest from a manufacturer in supporting development there. Unfortunately, that surge in demand faded before we got to the finish line. But the work we did there was successful in defining resources of interest, and we ended up finding a lot more cesium than we did tantalum. We've been waiting for a market opportunity to justify re-activating the project to develop the cesium component of the resources there. That time has arrived because there's now a global shortage of cesium as the one main supplier, a mine in Manitoba called Tanco, has basically run out of resources now. We have one of the few opportunities globally to create a significant new cesium supply. We're going to re-activate the project this year, get on the ground and hopefully be able to prove up a resource that we can get started fairly quickly.

Dr. Allen Alper: That sounds excellent. Could you tell our readers/investors the uses for cesium?

Don Bubar: Cesium has a lot of potential applications in the new technology. One of the most interesting applications is for atomic clocks that are needed in space technology that can keep time to a very highly accurate level, required for our space technology. While you don't need a lot of cesium, it's absolutely critical for that technology. Cesium is an element that is unique in the periodic table, as the most electro-positive element, which means any compounds that it forms are extremely stable. There are plenty of examples of how it's being used in such compounds. One product that has been produced at Tanco is cesium formate, a stable high-density fluid, with the same viscosity and clarity as water, but two and a half times as dense. It was used as a specialty drilling fluid in deep oil well drilling that could be recycled because it's so stable. Cesium has lots of other potential applications in electronics technology, renewable energy, glass, and many other things once a new supply is created.

Dr. Allen Alper: That sounds very good, Don. Could you tell our readers/investors about your background and your Team?

Don Bubar: I'm a geologist and I've been in the mineral exploration industry in Canada for over 40 years now. I started Avalon 26 years ago and have had a vision for getting these lithium-tantalum-cesium supply chains started for 25 years now. I've put together a team, with the skill sets needed to take advantage of this new opportunity, to produce these critical minerals, in sustainable ways, using new technology.

Dr. Allen Alper: Excellent. Could you tell our readers/investors about your share and capital structure?

Don Bubar: Right now, because we've been around for 26 years, relying on the equity markets to raise capital, we have about 350 million shares outstanding right now.

Dr. Allen Alper: And your current market cap?

Don Bubar: It’s around $70 million CAD.

Dr. Allen Alper: Could you tell our readers/investors a little bit about key shareholders or distribution?

Don Bubar: It's very widely held, we've been around for a long time. We don't have a lot of institutional shareholders, right now, because for a few years our market cap dropped right down to a very low level and we were basically a penny stock that didn't meet their investment criteria. But we still have over 20,000 individual retail shareholders all over the world. Many in the United States that invested during the original rare earths bubble 10 years ago, who have recognized that we were doing something pretty creative in this space and our time would come and have patiently been holding on to their positions, waiting for that day to arrive and it looks like it has.

Dr. Allen Alper: Well, that sounds excellent, could you tell our readers/investors the primary reasons they should consider investing in Avalon Advanced Materials?

Don Bubar: Exposure to a lot of these non-traditional commodities, like lithium and rare earths, as we've already talked about, and cesium and tantalum as well. But we also have potential for revenue in the near term, from our lithium project. We've also been looking at a couple of closed mine sites as opportunities. We have one in northern Ontario we're looking at, a closed phosphate mine, where the tailings and waste rocks still have quite a bit of phosphate in them that can be recovered easily, for growing applications in fertilizers. We're interested, because the phosphate minerals also contain very significant levels of rare earth elements and scandium that we believe we can economically extract and create a phosphate byproduct that can also be used in other fertilizer applications. We have opportunities for revenue from phosphate sales in the relatively near term. I would like to see Avalon looked at, as a growth company, in this whole new world of critical minerals and clean technology.

Dr. Allen Alper: That sounds excellent, Don. Thanks for joining us. We’ll publish your press releases as they come out so our readers/investors can follow your progress.

Don Bubar
President and CEO

1901-130 Adelaide St. W.
Toronto, Ontario, Canada
M5H 3P5
+1 (416) 364-4938

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