Avalon Advanced Materials Inc.

AVL:TSX    AVLNF:OTCQB  

Targeting 2 Separate Billion Dollar Markets With The Biggest Lithium Petalite Resource Not Under Chinese Control

• Battery Manufacturers Market
• Glass Ceramics Market

2 Deals Already in Place:

Deal 1.

• Entered Off-take Agreement for Petalite Concentrates from Major International Glass-Ceramics Manufacturer
  • Multiple year contract with a major non-Chinese international glass ceramic manufacturer
  • a global shortage of petalite supply exists after China took control of sources in Zimbabwe

Deal 2.

• LG Energy Solution to supply LGES with a battery-grade lithium hydroxide starting in 2025
  • LGES is a leading global manufacturer of lithium-ion batteries for electric vehicles and energy storage systems
  • signed during the visit of South Korea's President, Yoon Suk Yeol to Canada

How Is Avalon Accomplishing This?

By Establishing Ontario's First Regional Lithium Battery Materials Refinery In Thunder Bay

 

• Creates a regional Lithium Battery Materials supply chain
• Designed to accept lithium minerals concentrates
• Supported via Ontario's first-ever Critical Minerals Strategy to develop home-grown supply chains
• Signed Binding Letter of Intent with Billion Dollar ESSAR Group to become Strategic Partner & Co-Developer To Establish Supply Chain
  • Potential to be Operational by 2025

The Source:

100% Owned Separation Rapids Lithium Project & The Initial Feedstock for Refinery

• The World's Largest, Undeveloped Known Resource of The Rare Lithium Petalite
• Critical for High Strength Glass Ceramic Products
• Petalite is an important ore of Lithium
• Winter 2023 Diamond Drill Program has potentially expanded Lithium Resource
  • 13 Holes & 4179M
  • Final Hole Verticall 570M & Intersected Visuak Petatlite to 565M
• This increases the potential depth of the deposit by 80% from the previously tested 315 metres deepest intercept. The other twelve holes intersected mineralization to the east, west and at depth from the existing resource

Demand:

• Occurs from Clean Energy, Aerospace, Energy Efficiency, Modern Electronics, Medical Applications & Ceramics

Present indications on demand for lithium battery materials produced in Ontario are supporting an initial production capacity for the refinery of 20,000 tonnes per annum of lithium hydroxide and/or lithium carbonate

• Demand for lithium hydroxide and lithium carbonate continues to grow in North America as new electric vehicle and battery manufacturing capacity is established both in the United States and in Canada

Next Steps In Developin Refinery:

1. Finalizing initial commercial terms
2. Completion of final feasibility studies for both the refinery operations and lithium mineral concentrate production at the Separation Rapids site
3. Finalizing the exact location for the refinery in Thunder Bay
4. Proceeding with initial site preparation work both at both sites

ESSAR Partnership:

• On April 4 Avalon announced it had signed a binding LOI
• India based Essar Group to collaborate on establishing the lithium batterymaterials supply chain in northwestern Ontario
• Essar will become a co-owner of Avalon Lithium Inc, a new AVL subsidiary established as the business entity that will own the lithium refinery

Essar will provide funding to support the next steps including final feasibility studies and site preparation work at both Separation Rapids and the industrial site for the refinery in Thunder Bay once it is secured

Avalon now has considerable off-take interest in the lithium hydroxide product from emerging battery manufacturers both in Ontario, the U.S. and in Europe, who may also be willing investing partners in the refinery

• There is also local Indigenous business interest in investing in the refinery and potential for government funding support as part of the new national critical minerals strategy

Avalon Projects:

Diverse Minerals Portfolio with 5 Critical Minerals Projects

• 3 are in Advanced Stage of Development
• Exposure to Lithium, Rare Earths, Tin and Indium
• Exposure to Critical Minerals Cesium and Tantalum
• Clean Technology Business Opportunities
  • Recover Critical Minerals Via Innovative Extraction Technology

1. Separation Rapids Lithium
2. Tin: East Kemptville Project. Tin in Very Short Supply & trading at Record Prices Above $43,000/TWorking Toward Restarting Production
3. Lily Pad Cesium, Tantalum & Lithium
4. Nechalacho: Rare Earth Elements & Zirconium

Separation Rapids Lithium Project:

 

Separation Rapids Next Steps: Moving Toward Phase 1 Production Facility

2020-21 work: Continued process optimization work and secured permit to recover 5,000 tonne bulk sample which was collected in March, 2021

• Determined that Thunder Bay is ideally situated to locate battery materials refinery

2022: $10-15 million program planned to begin small scale DMS processing of bulk sample to produce petalite product samples for glass-ceramicsSecure off-take agreements and arrange project financing to expand production

• Complete Feasibility Study-level cost estimates, project engineering and pilot plant work to optimize lithium battery materials process flowsheet & costs for T-Bay refinery
• Complete environmental assessments and project permitting
  Continue exploration to define additional petalite resources on NW part of property

2022-4: Begin small scale commercial operations with sales of petalite and
mineral by-products while new battery materials refinery is constructed

2025: Begin battery materials production

Avalon’s Separation Rapids Lithium Project has the potential to produce high purity lithium compounds for two distinct markets: an industrial mineral product for glass-ceramics and lithium chemicals for energy storage.

The Separation Rapids deposit is one of the largest “complex-type” lithium-cesium-tantalum pegmatite deposits in the world, unusual in its enrichment in the rare, high purity lithium mineral petalite. Petalite is the preferred lithium mineral feedstock for certain specialty glass-ceramic products for technical reasons, notably its consistently low impurity levels.

Petalite also offers potential to produce a high purity lithium chemical product at a relatively low-cost to serve the needs of lithium ion re-chargeable battery manufacturers. Growing demand for rechargeable batteries in electric vehicles and home energy storage is expected to result in continued rapid growth in global consumption of lithium. Many industry analysts are predicting that the demand for lithium will double over the next 5-10 years, creating a supply deficit, as existing producers struggle to meet the new demand.

In August 2018, Avalon completed an updated Preliminary Economic Assessment, reflecting a simplified business model that focuses on initial production of lithium mineral concentrates, with potential for future expansion into production of the battery materials lithium carbonate and lithium hydroxide. 

In November 2020, Avalon entered into a Letter of Intent with Rock Tech Lithium Inc. to collaborate on the development of a lithium battery materials process facility in Thunder Bay, Ontario. This facility would be designed to accept lithium mineral concentrates from Avalon's Separation Rapids Lithium Project and Rock Tech's Georgia Lake Lithium Project, as well as potentially other emerging, new lithium mining operations in northern Ontario, to produce lithium sulphate, a precursor chemical for lithium-ion batteries.

Petalite is not the only lithium mineral of interest at the Separation Rapids project. Petalite production will be supplemented with the production of a second lithium mineral concentrate: lepidolite. It will provide an additional lithium mineral concentrate for treatment at Avalon’s planned lithium refinery in Thunder Bay.

Highly fractionated pegmatites, like the Separation Rapids deposit, contain many minerals of economic importance. The deposit has the potential for recovery of by-products including high purity silica, feldspar, rubidium, cesium and tantalum.

 

Lithium Minerals at Separation

Rapids: A rare type of LCT pegmatite

There are two main lithium ore minerals in the Separation

Rapids LCT pegmatite: petalite & lepidolite

Petalite is the predominant lithium mineral, with lepidolite occurring in distinct subzones comprising 20% of the resource

Petalite (Li Al Si4O10) contains 4.5% Li2O with no impurities

Lepidolite (K(Li,Al,Rb)2(Al,Si)4O10(F,OH)2 is a lithium mica containing other elements including cesium

They can each be concentrated to make saleable products:

• Petalite can be used both as an industrial mineral for high strength glass and as a high purity feed to make battery grade lithium hydroxide or carbonate
• Lepidolite concentrates are being used increasingly for production of battery grade lithium carbonate

Tantalum minerals are also recoverable along with Rubidium-rich K-feldspars as an industrial mineral by-product

 

Lilypad LCT Pegmatite Property

Avalon’s 100% owned Lilypad Project hosts a significant resource of the rare cesium mineral pollucite along with tantalum and lithium and recently re-activated the Project in June, 2021

The Importance of Cesium?

• Mainly used to create a low viscosity fluid for drilling deep
  oil wells called cesium formate
• Cesium is in growing on demand due to its potential in many high-tech applications
  • Atomic clocks & GPS, Specialty glasses, Ion-propulsion motors, High-density alkaline batteries
• Production from traditional sources is in decline and there is a
  global supply shortage at present
• Cesium products now selling for up to $US 5,000/kg

An initial reconnaissance mapping and sampling program carried out by Avalon in 1999 confirmed the presence of economically-significant cesium-lithium-tantalum mineralization at several locations on the property.

Rare metal pegmatites on the Lilypad property occur over a minimum area of 10 km2. Diamond drilling conducted by Avalon in 2001-2003 focused mainly on the tantalum potential.

All of the known pegmatites tested by drilling exhibit good continuity to depth, high degrees of fractionation and are enriched in cesium, lithium and tantalum, as well as rubidium. Cesium occurs in the mineral pollucite and lithium occurs primarily in both spodumene and lepidolite in the dykes explored to date.

Drill intercepts from a 2000-2001 drill campaign with cesium and lithium values are listed in the tables below. Cesium values in the Pollucite Dyke range up to 6.2% Cs2O over 1.70m and is so named because the cesium ore mineral pollucite is one of the dominant mineral phases in this dyke. 

A preliminary resource was estimated in 2001 to contain roughly 340,000 tonnes grading 2.294% Cs2O and 0.037% Ta2O5* based on 9 holes drilled to a maximum vertical depth of 250 metres. The resource is open to depth and along strike for expansion. Other similar pollucite-bearing LCT pegmatite dykes on the property remain untested.

Nine drill holes encountered lithium above the 0.6% cutoff for the intercept, with some holes with multiple intercepts. For example, drill hole LRD01-22 had three separate intercepts including 1.0% Li2O over 3m, 1.0% Li2O over 18.45m and 1.07% Li2O over 3.7m - all of which were accompanied by cesium values at greater than 1% Cs2O.

Project Timelines and Future Plans

Encouraging for the future development of the Lilypad Cesium-Tantalum property is the fact that significant mineral discoveries to the north (Ring of Fire) have prompted developing road access into the area. This would greatly enhance the economic viability of any mineral deposits present in the region, including the cesium-lithium-tantalum deposits in the Lilypad area.

Economic resources of the cesium ore mineral pollucite are very rare and Lilypad represents one of the very few known significant occurrences of this  mineral in the world. With declining production from traditional sources, new producers are needed for this scarce advanced material to meet growing demand. As a result, Avalon re-activated the project with an exploration program focused on cesium in October 2020. 

2021 plans include process testwork on the 250kg bulk sample collected in October 2020, sampling of historic drill core at old campsite for QA/QC and grade confirmation and block modelling of the resource delineated in the 2001 drilling program on the Pollucite Dyke in preparation of an updated NI 43-101 resource estimate.

The Lilypad property is located in the traditional territory of the Eabametoong First Nation. The company has initiated consultation with the community at this early stage of exploration, in anticipation of making economic discoveries of cesium mineralization. Avalon is committed to negotiating mutually beneficial partnership agreements with its First Nation neighbours.

Lilypad Project fact sheet

Cesium is a widely used advanced material with uses in specialty drilling fluids; atomic clocks; electric power devices that convert heat to energy; photoelectric cells for medical devices and videography; and in ion engines designed for space crafts on extended missions. Cesium is also used to make special optical glass, as a catalyst promoter, in vacuum tubes and in radiation monitoring equipment.

Cesium’s importance in the atomic clock should not be overlooked – its qualities allow cell phones, GPS and the internet to align with extremely accurate timing. A cesium atom is so constant in the speed it vibrates that a cesium-based clock takes millions of years to lose just one second. This extremely-accurate time allows satellites to determine where someone is based on GPS data.

More than two-thirds of the world's reserves of cesium are found in Canada, with reserves also found in Zimbabwe, China, Namibia and, recently, Australia. However, most commercial production is as a by-product of lithium and/or tantalum projects. 

Tantalum has the best known ability of all metals to store electricity. It is very rare, averaging just 2 ppm in the earth’s crust. The majority of tantalum produced is used in the manufacture of electronic capacitors, which are fundamental to all electronic products. Tantalum’s ability to store electricity in small capacitors has allowed the miniaturization of aviation electronics, miniaturization of computers to desktop and laptops, and the miniaturization of all hand held electronic devices such as cell phones and radios. Furthermore, tantalum’s inertness or immunity to attack by chemicals and its non-allergenic character lend to its use in surgical appliances and prosthetic implants.

Current tantalum producers are found in Rwanda, the DRC, Nigeria, Australia, China and Ethiopia. Tantalum is often found as the mineral tantalite along with the tin mineral cassiterite - both as heavy minerals that accumulate in secondary (placer) deposits. Such sources in Central Africa often see production by guerrilla groups through child labour, leading to its designation as a conflict mineral.

Lithium is well known for its growing use in battery technology, as well as high strength glass and ceramics. Avalon’s advanced Separation Rapids Lithium Project is also a potential producer of lithium minerals.

East Kemptville Tin: A Closed Minesite With Value in the Wastes

 

• Avalon’s model is to sustainably rehabilitate the site by processing low-grade stockpiles using ore- sorting technology, then re-processing the tailings.

In production from 1985-92 by Rio Algom then operated as a closed mine site since 1992 with water treatment to manage acid mine drainage

• During the early years of operation, tin recoveries were less than 50% and other base metals ore minerals (copper-zinc) were not recovered.
• Host rocks also contain significant Lithium as well as Indium, with potential for Gallium & Germanium
• The stacked tailings along with the stockpiles which total 25 million tonnes that have very high contents of unrecovered metals that can now be recovered using new process technologies

 

Location, Ownership and Access

The 100% owned East Kemptville Tin-Indium Project is located approximately 45 km northeast of Yarmouth, Nova Scotia in the vicinity of the former East Kemptville Tin Mine.

The property consists of four contiguous exploration licenses and a Special License covering an aggregate of over 10,000 ac (4,000 ha) and 880 ac (356 ha) respectively and is easily accessible by a secondary highway. The Special License requires Avalon to secure permission from current landowners to access the closed East Kemptville mine site.

Project Timeline

In May 2014, Avalon entered into an agreement with the surface rights holder to secure access to lands held under the Special Licence for a limited drilling program, to confirm historic estimates of tin-copper-zinc resources remaining in the ground after production ceased at the East Kemptville mine in 1992, and bring them into compliance with NI 43-101 for reporting purposes.

A second drilling program conducted in 2015 had the objective of upgrading inferred mineral resources in the Main and Baby Zones into the Indicated and Measured categories, as well as testing other known tin occurrences in the area. 22 drill holes totalling 4,514 metres were completed during the 2015 drilling program on the Main, Baby and Duck Pond Zones. Results were in line with expectations and confirmed continuity of the mineralized zone to depth. Highlights include intersections of 0.46% tin (Sn), 25.2 ppm indium (In) and 0.63% zinc (Zn) over 82.3 metres (EKAV-15-10), 0.23% Sn, 15.6 ppm In and 0.33% Zn over 36.25 metres (EKAV-15-09) and 0.25% Sn, 29.4 ppm In and 0.64% Zn over 18.67 metres (EKAV-15-11).

 

Re-development Model

In July 2018, Avalon finalized its Preliminary Economic Assessment (PEA) on the East Kemptville Project. The re-development model, as presently conceived, is an environmental remediation project that will be financed through the sale of tin concentrates recovered in large part from previously-mined mineralized material on the site. The PEA was prepared by independent consultants Micon International Limited, Toronto, Canada, with the finalized mine plan based on the updated mineral resource estimate disclosed in the new release dated June 28, 2018. The PEA is preliminary in nature, includes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized.  

The redevelopment model primarily involves processing the 5.87 million tonne stockpile of previously-mined oxidized low-grade mineralization, supplemented by selective mining of near-surface fresh higher-grade tin mineralization in the Main and Baby Zone deposits. The freshly mined tin mineralization will serve an important purpose in the site rehabilitation concept by allowing for the generation of clean tailings free of sulphide minerals. These clean tailings will be used to create a cover for the existing dry-stacked tailings, which will fully remediate the long term environmental liability associated with the tailings and facilitate its ultimate conversion into other long term beneficial uses, such as a solar power generation or agriculture. Avalon’s small-scale, re-development model utilizes existing infrastructure and previously-mined material, making the project a low energy, low green-house gas producer.

The development model utilized for the PEA contemplates a production schedule of approximately 1,300 tonnes per annum of a 55% tin concentrate for 19 years, with tin concentrates being sold and shipped for treatment in international markets. The PEA concludes that the small-scale re-development model for tin concentrate production at East Kemptville is economically viable at current tin prices in the range of US$20,000 to US$22,000/tonne. Assuming an average go-forward tin price of US$21,038/tonne, and an exchange rate of CAD 1.30/USD, the project has an indicated pre-tax IRR of 15.0% and an NPV of C$17.9 million at an 8% discount rate. The initial capital cost is estimated at C$31.5 million. Average annual revenues from sales are calculated as C$17.75 million vs. annual production costs of C$11.6 million.

East Kemptville Tin Production and Site Remediation Project Preliminary Economic Assessment (NI 43-101) (Effective July 24, 2018)

Nechalacho Rare Earth Elements: Feasibility Study

 

Indigenous Agreements

In 2012, Avalon signed its first Accommodation Agreement with the Deninu K’ue First Nation. A similar Participation Agreement was signed with the Northwest Territory Métis Nation in February 2014. The Agreements include measures to mitigate environmental and cultural impacts that may result from the Project’s development. Implementation committees meet during periods of project activity to review Agreement commitments, work on joint-projects and share updates about their respective organizations.

Negotiations continue intermittently on various forms of partnership agreements with other Indigenous governments including the Lutsel K’e Dene First Nation, North Slave Métis Alliance, Yellowknives Dene First Nation, Tlicho Government and K’atl’odeeche First Nation. These negotiations have been conducted in a spirit of mutual respect and collaboration.

Property Timeline

2005-07: Avalon acquired the property and completed an initial compilation on the North-T deposit, which included recognition of a small, high grade, neodymium resource in the F-Subzone, averaging 6.5% Total Rare Earth Oxides including 1.5% Nd2O3.

2011: MVEIRB started the Environmental Assessment process; Avalon submitted a Developers Assessment Report (otherwise known as an Environmental Impact Statement), on May 20, 2011

June 2012: Signing of Accommodation Agreement with the Deninu K’ue First Nation

2008-13: Discovery and definition of the Basal Zone heavy REE resource led to preparation of a positive Feasibility Study contemplating large scale production of a mixed rare earth precipitate and enriched zirconium concentrate, containing by-products tantalum and niobium

November 2013: Approval of Environmental Assessment by the Federal Government

February 2014: Signing of Participation Agreement with the Northwest Territory Métis Nation

March 2014: Strategic partnership / refining agreement with Solvay for refining of rare earths (mutually terminated in February 2016)

• April 2014: Receipt of Land Use Permit for pre-construction work
• May 2014: Receipt of Water Use License for pre-construction work

[Project put on hold following dramatic decline in REE prices]

2018: Due to rising prices for Nd-Pr, Avalon completing a field program to begin assessing the near term, small scale development potential of the T-Zone and Tardiff Zones as a source of Nd-Pr rich bastnaesite concentrates. Sampling was also done in the T-Zone to begin assessing its lithium potential due to widespread occurrence of the lithium mica polylithionite.

2018/2019: Following the receipt of the new Exploration Type B Land Use Permit in June 2018, Avalon also received approval for the extension of its existing Land Use Permit and Water License for the first year of site preparation and preliminary low impact construction activities in 2019.

2019: Avalon and Cheetah Resources Pty Ltd. signed an agreement under which Cheetah acquired ownership of the T-Zone and Tardiff Zone resources for C$5 million, with Avalon continuing to assist Cheetah with its work programs. Avalon retains ownership of the mineral resources below a depth of 150 metres above sea level (including the Basal Zone deposit that was the focus of Avalon's positive 2013 Feasibility Study) and will continue to have access to the property for exploration, development and mining purposes.

2013 Feasibility Study Highlights

On April 17, 2013, Avalon announced the completion of a positive Feasibility Study on the Basal Zone of its Nechalacho property. The Feasibility Study was prepared by SNC-Lavalin Inc. and was the first feasibility-level study to be completed on a major heavy rare earth project outside of China. The results confirmed that the Basal Zone on the Nechalacho property is technically feasible and economically robust as a producer of the heavy rare earth elements.

• The discounted cash flow analysis yielded a 22.5% internal rate of return (“IRR”) on a pre-tax basis and a 19.6% IRR on an after-tax basis, assuming 100% equity financing. The project’s net present value at a 10% discount rate was calculated at $1.351 billion pre-tax and $900 million after-tax.
•  Total project construction capital costs were estimated at $1.575 billion, which included a 13% contingency and $122 million in sustaining capital.
• Operating costs were estimated at $264.5 million per year, while revenues were estimated at $645.8 million per year using price assumptions developed in 2011-12. With these assumptions, revenues of $456.5 million from separated rare earth oxides (“REOs”) and $189.3 million from the sale of an enriched zirconium concentrate were calculated.
• Sales of the five critical REOs (neodymium, europium, terbium, dysprosium and yttrium) accounted for over 82% of the separated REO revenues, while lanthanum and cerium sales represented less than 4.5% of total revenues.
• Total Measured and Indicated Mineral Resources would be sufficient to support continued mining operations at Nechalacho for many decades beyond the assumed 20 year mine life, assuming Mineral Resources can be continuously converted to Mineral Reserves during operations.

Visit Avalon’s website for more information at: https://www.avalonadvancedmaterials.com/

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Avalon Expands Resource Potential at Separation Rapids Lithium Project, Kenora ON

posted on May 04, 2023

Avalon Advanced Materials Inc. announces that the preliminary results from the winter 2023 diamond drilling program has potentially expanded the lithium resource at the Company's Separation Rapids Lithium Project. Thirteen holes totalling 4179 metres were drilled on the central main mass depth extensions of the resource. Of note, the final hole totalled 570 metres vertically through the deposit and confirmed visual petalite mineralization to a depth of 565 metres. This increases the potential depth of the deposit by 80% from the previously tested 315 metres deepest intercept. The other twelve holes intersected mineralization to the east, west and at depth from the existing resource and justify completion of an updated resource estimate for the Separation Rapids lithium deposit. Assays from four of the holes are pending.

Drilling Program Details

The winter 2022/23 diamond drilling program included twelve drill holes on the existing resource and one vertical drill hole on the main centre of the deposit designed to examine the potential depth extent of the petalite mineralization. Twelve holes were designed to undercut historic maximum-known mineralized drill intercepts on the widest part of the Separation Rapids as step outs to expand the existing resource. The main deposit consists of a large, zoned vertical pegmatite dyke averaging 50-70m in thickness that has been structurally flattened, that includes both petalite and lepidolite accompanied by many narrower mineralized dykes of similar but variable lithium mineralogy. The dominant lithium mineral is petalite. The dykes tend to be lepidolite-rich on both the east and west extensions. Lepidolite is a lithium mica typically containing 7-8% Li2O content while petalite typically contains 4-4.5% Li2O, but with no impurities.

The twelve holes were drilled over a total strike length of about 300 metres. Six holes (SR-22-81 to SR-23-86, assays for SR-23-85 pending) were designed to intersect the main part of the zone below existing drilling and were successful in extending the mineralization to depth (Table 2). Four holes (SR-23-87 to SR-23-90) were on the eastern extension of the deposit, which hosts both the lithium-bearing mica, lepidolite, as well as petalite; three of these were successful in extending the eastern mineralization (SR-23-90 assays pending). Finally, two holes (SR-23-91 to SR-23-92) were drilled on the western edge of the deposit. With SR-23-92 intersecting lithium mineralization, the deposit was extended to the west (SR-23-91 assays pending).

In summary, drilling tested the deposit to depth, over a 300 metre strike length in the main part of the deposit ("The Big Whopper") with mineralization exceeding the 0.5% Li2O cutoff grade encountered in all but one of the holes. Notable mineralized intervals (all widths estimated true width unless otherwise stated) include 1.67% Li2O over 19.6 metres (SR-22-81), 1.20% Li2O over 27.5 metres (SR-23-83) and 1.8% Li2O over 9.63 metres contained within 0.96% Li2O over 45 metres (SR-23-86). For the eastern extension of the deposit, SR-23-89 intersected 1.61% Li2O over 5.74 metres and for the western extension SR-23-92 intersected intervals of 0.89% Li2O over 12.4 metres and 1.49% Li2O over 4.5 metres. These grades are typical of the Big Whopper resource as it also includes Rb-K feldspars which are a significant potential by-product along with tantalum and cesium.

Drill hole SR-23-93 was set up near the geographic centre of the deposit and drilled vertically to 570 metres. As mentioned above, the objective was to explore geologically the depth extent of the Big Whopper pegmatite assuming it continues with a vertical dip. The deepest intercept prior to this drill program was about 315 metres from surface. The vertical drill hole intersected pegmatite to a depth of 565 metres with continuous visible petalite mineralization similar to previous assayed core intervals along its entire length. The drill hole exited pegmatite entering amphibolite host rock at 565 metres but it is not known whether this was due to the hole exiting the main body due to dip, or entering a narrow zone of amphibolite which is commonly observed within the deposit. However, the drill hole has increased the vertical depth of known petalite mineralization by 80%. Conclusions as to the grade of lithium is contingent on the pending assay results. Please note that this intercept does not represent a true width.

All drill hole data will be brought into Avalon's database and resource block model in order to develop an independent updated resource estimate for the deposit.