Avalon Announces $3.5M Financing from JV Partner and Major Shareholder Sibelco

Core Viewpoint - Avalon Advanced Materials Inc. has secured CAD $3.5 million in convertible debenture financing from its significant shareholder SCR-Sibelco NV to advance its lithium and rare earth projects and for working capital [1][3]. Financing Details - The financing is structured as an amended and restated debenture, replacing an existing CAD $3.0 million convertible secured debenture, resulting in a total principal amount of CAD $6.5 million [2]. - The debenture carries an interest rate of 7.5% per annum, with maturity set for November 18, 2026 [4]. Project Advancements - The funds will be utilized to accelerate technical studies on the Lake Superior Lithium Project and to prepare a new Mineral Resource Estimate at the Separation Rapids joint venture project [3]. - A Preliminary Economic Assessment (PEA) published on September 3, 2024, indicated a positive after-tax net present value (NPV) of CAD $4.1 billion at an 8% discount rate, with a capital expenditure (Capex) of CAD $1.3 billion for the Lake Superior Lithium Project [3]. Joint Venture Implications - If the debenture and accrued interest are converted at maturity, Sibelco's joint venture interest in Separation Rapids Ltd. will increase by 30%, changing the ownership stakes to 90% for Sibelco and 10% for Avalon [5]. - Sibelco retains the right to convert the debenture into common shares of Avalon or the joint venture company prior to maturity under certain conditions [4][5]. Company Overview - Avalon Advanced Materials Inc. focuses on vertically integrating the Ontario lithium supply chain and is developing multiple lithium and rare earth projects, including the Separation Rapids lithium deposit and the Nechalacho project [6]. - The company is also working on establishing Ontario's first midstream lithium hydroxide processing facility to connect northern lithium resources with southern EV battery manufacturing [7].