Avalon Advanced Materials Inc. · TSX:AVL
Avalon Advanced Materials — Investor Presentation (July 2019)
48 slides from Avalon Advanced Materials's investor presentation, July 2019
Slide 1: Developing the Supply Chain for the Clean Economy in Canada
Developing the Supply Chain for the Clean Economy in Canada Lithium, Tin & Rare Earths July 2019 Don Bubar TSX: AVL President & CEO OTCQB: AVLNF
Slide 2: Safe Harbour Statement
2 Safe Harbour Statement Forward looking information This corporate presentation contains or incorporates by reference “forward looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, which may not b
Slide 3: Who is Avalon Advanced Materials?
3 Who is Avalon Advanced Materials? › Toronto-based, operating in Canada since 1995 › Mineral exploration and development company focused on clean technology metals and minerals • 20 years of experience with specialty minerals › Listed: TSX (AVL), OTCQB (AVLNF), Frankfurt (OU5) • Market Cap: CAD$15m
Slide 4: Avalon's Vision and Mission
4 Avalon’s Vision and Mission Establish a diversified clean technology metals business, built on strong environmental and social performance. Create shareholder value and long term growth through sustainable development of our lithium, tin and REE assets.
Slide 5: Avalon's Sustainable Resource Development Strategy
5 Avalon’s Sustainable Resource Development Strategy › Focus on materials that enable clean technology › Design the operation to minimize environmental impacts and plan for productive use of the land post closure › Minimize GHG emissions and water impacts › Focus on process efficiency, minimizing wa
Slide 6: Technology Metals and Minerals Project Pipeline
6 Technology Metals and Minerals Project Pipeline Rare Earths, Lithium ‘Energy Metals’ vital to electric vehicle technology Lithium Critical ingredient both for energy storage and high strength glass products Cesium A rare element in high demand Tin for space technology and An emerging technology sp
Slide 7: Many non-traditional commodities are now vital to modern electronics and clean technology
7 Many non-traditional commodities are now vital to modern electronics and clean technology
Slide 8: Experienced Management Team and Diversified Board of Directors
8 Experienced Management Team and Diversified Board of Directors MANAGEMENT › Donald S. Bubar, P.Geo. › Melanie Smith, B.Sc., J.D. President & CEO Senior Legal Counsel › Jim Andersen, CA, CPA › Ron Malashewski, P.Eng (AB) V.P. Finance, CFO & Corporate Secretary Community Relations, Kenora › David Ma
Slide 9: History of leadership in health & safety, Indigenous relations and environmental protection
9 History of leadership in health & safety, Indigenous relations and environmental protection Donald Bubar, President & CEO Mark Wiseman, VP Sustainability Dr. Bill Mercer, VP Exploration › Advocate for increased › Biologist with extensive › Chairs the PDAC Health and Safety Indigenous participation
Slide 10: Corporate Knights
10 Corporate Knights › Avalon is among Corporate Knights’ Future 40 Responsible Corporate Leaders in Canada (2018, 2016, 2015) › Corporate Knights: a media and research company focused on clean capitalism drivers for decision makers › Corporate Knights Magazine has track record of providing informed
Slide 11: Sustainably Reporting: A leader in best practices
11 Sustainably Reporting: A leader in best practices › Reduces social licence risk to investors › Aligns Avalon’s operating philosophy with its cleantech customers › Sustainability reporting creates greater transparency and accountability between the company and its stakeholders › By measuring and t
Slide 12: Environmental and Social Responsibility at Nechalacho, Thor Lake, NWT
12 Environmental and Social Responsibility at Nechalacho, Thor Lake, NWT › Leaders in Aboriginal Community Outreach › The name Nechalacho was formally conveyed by the YKDFN in a ceremony held at site in 2009 in respect of the First Nations’ traditional land use › Nechlacho REE Project Accommodation
Slide 13: First Nations Relationships: Separation Rapids Lithium Project
Avalon delivered Keynote 13 at WIN’s 2016 High School graduation in Whitedog First Nations Relationships: Separation Rapids Lithium Project › 2013: Renewed MOU with Wabaseemoong Independent Nations (WIN) first signed in 1999 › Committed to maximizing business & partnership opportunities for WIN duri
Slide 14: Separation Rapids Lithium
14 Separation Rapids Lithium A rare LCT type of pegmatite deposit enriched in the lithium minerals petalite and lepidolite Large, high quality resource amenable to open pit mining, discovered in 1996 › PFS initially completed in 1999 on model to produce petalite for glass-makers › Secure Tenure unde
Slide 15: Separation Rapids is located close to transportation and power infrastructure
15 Separation Rapids is located close to transportation and power infrastructure
Slide 16: Lithium Minerals at Separation Rapids
Clear Crystalline Petalite above; 16 Purple Lepidolite below Lithium Minerals at Separation Rapids › 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 co
Slide 17: Lithium Minerals: enable innovation in high strength glass products
17 Lithium Minerals: enable innovation in high strength glass products › Glass and Ceramics • Lithium creates thermal shock resistance Glass-ceramic stovetops Corningware® Cookware Fireplace Shields • Lithium additions reduce the melting temperature and lower GHG emissions from furnace • Lithi
Slide 18: Separation Rapids 2015-17 Work programs
18 Separation Rapids 2015-17 Work programs: Focused on metallurgical process and product recovery › Pilot plant produced 1 tonne of high purity petalite concentrate • Petalite product quality confirmed for high strength glass › New hydromet process produced high purity (99.9%) lithium hydroxide prod
Slide 19: 2017-18 Work program: Drilling and Metallurgical Process Optimization Work
19 2017-18 Work program: Drilling and Metallurgical Process Optimization Work › Added cleaner stage to petalite flowsheet to produce a high grade (>4.5% Li2O) and very low impurity “Super Petalite” concentrate for glass applications › Produced trial quantities of petalite for glass marketing purpose
Slide 20: 2018 Updated PEA Highlights
20 2018 Updated PEA Highlights › Simplified business model with initial focus on production of lithium mineral concentrates for glass and ceramics › Production of 71,500 tpa petalite, 11,800 tpa lepidolite › Initial CAPEX: C$77.7 million (475,000 tpa mill capacity) › Feldspar circuit added in Year 6
Slide 21: Next Steps: Moving toward Phase 1 Production Facility
21 Next Steps: Moving toward Phase 1 Production Facility › Minimum $3 million program planned to prepare for construction of mine and process plant in 2019-20 to produce lithium mineral concentrates • Bulk sample processing to produce more lithium mineral product samples and finalize process flowshe
Slide 22: Snowbank Petalite Pegmatite Discovery
Snowbank Petalite Pegmatite – 22 August 2018 Snowbank Petalite Pegmatite Discovery › Large exposure of a new petalite pegmatite discovery averaging 6 metres wide and traceable for over 100 metres along strike open on both ends. › Assays of up to 2.51% Li2O over Coarse white crystals of 1.1m in chann
Slide 23: Separation Rapids Lithium Deposit Mineral Resources Estimate (May 22, 2018)
23 Separation Rapids Lithium Deposit Mineral Resources Estimate (May 22, 2018) Petalite Zone PZ (PZ) Lepidolite-Petalite LPZ Zone (LPZ) Mt % Li2 O % Ta2 O5 % CsO % Rb2 O Mt % Li2 O % Ta2 O5 % CsO % Rb2 O Measured 2.425 1.440 0.005 0.010 0.322 0.939 1.410 0.008 0.027 0.473 Indicated 3.992 1.391 0.006
Slide 24: Separation Rapids Lithium Deposit Block Model (May 22, 18)
24 Separation Rapids Lithium Deposit Block Model (May 22, 2018) Looking North & showing four 2018 drill holes LPZ (purple) PZ (yellow) Open to depth
Slide 25: Separation Rapids Lithium will have a very small environmental footprint
25 Separation Rapids Lithium will have a very small environmental footprint › Petalite ore contains no sulfides or toxic metals › Lithium has beneficial pharmaceutical use in human mental health NON-TOXIC • Wabaseemoong First Nation Traditional Knowledge recognized the area as the “Healing Rock” › W
Slide 26: Only 10% of the lithium ore is likely to be waste
26 Only 10% of the lithium ore is likely to be waste 10% of the ore from Separation 99.5% of the ore from a 96% of the ore from a typical Rapids lithium plan will end up as typical gold mine ends up as nickel/copper mine ends up waste. 90% will become product waste as waste (petalite, lithium chemic
Slide 27: Lithium Demand by Application (2017)
27 Lithium Demand by Application (2017): Batteries dominate, but ceramics and glass remain a major market Batteries 2% 5% 9% Ceramics & Glass 4% 46% Lubricating Greases 7% Casting Mold Flux Powders 27% Polymer Production Air Treatment Other (Including pharmaceuticals) Source: USGS March 2018
Slide 28: Lithium Demand forecast to 2025 (k/tonne)
28 Lithium Demand forecast to 2025 (k/tonne) Source: USB Securities 2018 Research Report
Slide 29: New Lithium Production: Expectations are not always met
29 New Lithium Production: Expectations are not always met Source: Canaccord Genuity, April 2018
Slide 30: East Kemptville Tin Recovery and Site Rehabilitation Project
30 East Kemptville Tin Recovery and Site Rehabilitation Project › Opportunity to sustainably fully rehabilitate the site through recovery of tin from stockpiles › Mine produced from 1985-92, when it closed prematurely due to low tin prices › Significant mineral resources left both in the ground and
Slide 31: East Kemptville Location and Regional Infrastructure
31 East Kemptville Location and Regional Infrastructure › On paved highway › Grid power on site › Yarmouth (55 km) & other communities within commuting distance › Ample water › Skilled labour available locally › Strong local community support (TREPA, AFN) Power lines 69kV East Kemptville 138kV locat
Slide 32: East Kemptville Site Rehabilitation Concept
Canola grown on paper mill bio-solids on 32 tailing, Sudbury, Ontario East Kemptville Site Rehabilitation Concept › Remove or isolate historical sources of acid mine drainage “AMD” (Low-grade stockpile, waste piles and stacked tailings) by new processing and recovery of tin concentrates • Eliminate
Slide 33: East Kemptville Site Layout and surface resources
33 East Kemptville Site Layout and surface resources Existing Tailings Dam with spare capacity, 18.8 M tonnes historical tailing North Waste Pile: 1.29M tonnes @ 0.089% tin` Low-grade Stockpile Inferred Resource: 5.87M tonnes @ 0.112% tin* In-ground resources: Main Zone Pit Indicated:18.5Mt @ 0.176%
Slide 34: Two Composite Views of Low Grade Ore Stockpile at East Kemptville
34 Two Composite Views of Low Grade Ore Stockpile at East Kemptville 6 million tonnes of previously mined tin ore now generating AMD Can be re-processed to recover tin and remove need for perpetual water treatment
Slide 35: East Kemptville Tin Project: PEA Small Scale Re-Development Model
35 East Kemptville Tin Project: PEA Small Scale Re-Development Model › Process low grade ore stockpile and near-surface, higher grade ore in existing pits at rate of 2,400 tpd for tin recovery only › Crushing-Milling-Gravity Concentration to recover cassiterite concentrates grading 55% tin using mod
Slide 36: Sensor-based Ore-sorting Technology
36 Sensor-based Ore-sorting Technology Advances in sensor technology now allow for detection of physical properties of minerals, such as specific gravity. Minerals can be concentrated after crushing without using water or chemical reagents.
Slide 37: East Kemptville Re-development Concept as currently designed
37 East Kemptville site ca.1985 East Kemptville Re-development Concept as currently designed: › Eliminates the historical environmental liability › Efficiently uses process reagents › Minimizes financial assurance costs › Minimizes waste management costs › Minimizes GHG production › No new disturban
Slide 38: Metals Most Impacted by New Technology: Tin is No. 1!
38 Metals Most Impacted by New Technology: Tin is No. 1! Source: MIT / Rio Tinto , March, 2018
Slide 39: Nechalacho Rare Earths Property Regional Infrastructure
39 Nechalacho Rare Earths Property Regional Infrastructure Snare ] Hydro Dam Whati Proposed N Behchoko Bluefish ] Hydro Dam National Park Lutsel K’e Yellowknife Great Thor Lake Slave (Nechalacho Mine and Concentrator) Lake Fort Resolution Hay River/ Potential K’atl’odeeche Pine Point Hydro Line ] Ta
Slide 40: Nechalacho Property Background
40 Nechalacho Property Background › First explored in 1970’s and early 80’s mainly for tantalum and niobium › High grade beryllium and rare earth North T deposit discovered and explored 1983-85 › Avalon acquired 100% interest in 2005 with initial focus on REE; Basal Zone discovered › China export qu
Slide 41: What has changed since 2013?
41 What has changed since 2013? › Soaring demand for neodymium and praseodymium for use in high strength magnets - now vital for electric motors used in electric vehicles › Rising prices of neodymium and praseodymium › Presence of high grade, near surface Nd-Pr and Dy resources in Tardiff and T-Zone
Slide 42: Joint Venture with Cheetah Resources
42 Motors in electric vehicles rely on rare earth magnets to reduce motor size and weight and reduce power consumption. Approximately 30% of the magnet is Nd-Pr metal Joint Venture with Cheetah Resources › Avalon and Cheetah Resources Pty Ltd. announced the signing of a binding terms sheet, fully de
Slide 43: The Nechalacho Property hosts multiple polymetallic deposits
43 The Nechalacho Property hosts multiple polymetallic deposits For illustrative purposes only. Not to scale.
Slide 44: Nechalacho: Future Plans
44 Nechalacho: Future Plans › Process testwork on low-cost method for Nd-Pr concentrate recovery by ore sorting technology › Testwork on leaching process for bastnaesite concentrate to recover REE concentrate › Geological compilation and core re-sampling with confirmation drilling on T-Zone REE reso
Slide 45: Benefits of Proposed T-Zone Development Model
45 Benefits of Proposed T-Zone Development Model › Very limited water use (ore-sorting is a dry process) › No significant waste - rejected material will be benign and usable /salable › Progressive remediation of environmental footprint can be incorporated into the overall development model › Provide
Slide 46: What are the Rare Earth Elements?
46 What are the Rare Earth Elements? Light REE: La = Lanthanum Ce = Cerium Pr = Praseodymium Nd = Neodymium Sm = Samarium Heavy REE: Eu = Europium Gd = Gadolinium Tb = Terbium Dy = Dysprosium Ho = Holmium Er = Erbium Tm = Thulium Yb = Ytterbium Lu = Lutetium Y = Yttrium Critical Magnet REE: Neodymiu
Slide 47: Rare earth elements are essential to a cleaner and more sustainable future
Rare earth elements are essential to a cleaner and more sustainable future
Slide 48: Contact us
www.AvalonAdvancedMaterials.com TSX: AVL OTCQB: AVLNF Contact us: 1901-130 Adelaide St. W. Toronto, Ontario, Canada M5H 3P5 +1 (416) 364-4938 ir@AvalonAM.com Thor Lake, NWT
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