Avalon Advanced Materials Inc. · TSX:AVL
Avalon Advanced Materials — Investor Presentation (February 2020)
42 slides from Avalon Advanced Materials's investor presentation, February 2020
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 February 2020 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 › Focused on Critical Minerals and Cleantech Materials including lithium, rare earths, cesium and tin-indium with near term production potential › Listed: TSX (AVL), OTCQB (AVLNF), Frankfurt (OU5) › Market Cap: CAD$1
Slide 4: Experienced Management Team and Diversified Board of Directors
4 Experienced Management Team and Diversified Board of Directors MANAGEMENT BOARD of DIRECTORS › Jim Andersen, CA, CPA › Donald S. Bubar, P.Geo. CEO V.P. Finance, CFO & Corporate Secretary › Alan Ferry, CFA › Donald S. Bubar, P.Geo. Chair, Governance/Compensation Committee Chair President & CEO › Jo
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: Avalon's Strategy for Growth and Value Creation
6 Avalon’s Strategy for Growth and Value Creation Staged development: Create a platform for growth with a demonstration scale production facility to prove process and introduce products to cleantech customers for approval › Achieve initial production and positive cash flow at a small scale with scal
Slide 7: Critical Minerals for Clean Technology Project Pipeline
7 Critical Minerals for Clean Technology Project Pipeline
Slide 8: Cleantech materials, such as lithium and rare earths, are not basic commodities!
8 Cleantech materials, such as lithium and rare earths, are not basic commodities! › They are highly refined chemical products with demanding specifications designed to meet the needs of end-users › Define the market to be served and design an appropriate mineral recovery and extraction process to d
Slide 9: 15 Year Stock Price / 1 Year Stock Price
9 Since 2010, Avalon has been known primarily as 9.50 Rare Earths equity in the US Rare Earths see price spike and major media publicity 6.00 because of China imposing export quotas 3.00 0.05 15 Year Stock Price 0.17 1 Year Stock Price 0.12 Price jumps in reaction to news on rare earths in context 0
Slide 10: Separation Rapids Lithium
10 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 and ceramics, model updated
Slide 11: First Nations Relationships: Separation Rapids Lithium Project
11 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 during operations and post closure › WIN leadership are supportive of the Proj
Slide 12: Separation Rapids is located close to transportation and power infrastructure
12 Separation Rapids is located close to transportation and power infrastructure
Slide 13: Lithium Minerals at Separation Rapids
Clear Crystalline Petalite above; 13 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 14: Lithium Demand by Application (2017)
14 Lithium Demand by Application (2017): Batteries dominate with demand growing rapidly, but ceramics and glass and ceramics remain major markets that are also growing. Batteries 2% 5% 9% Ceramics & Glass 4% 46% 7% Lubricating Greases Casting Mold Flux Powders 27% Polymer Production Air Treatment Ot
Slide 15: Lithium Minerals: enable innovation in high strength glass products
15 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 › Lithium
Slide 16: 2018 Updated PEA Highlights
16 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 17: Separation Rapids Lithium Deposit Mineral Resources Estimate (May 22, 2018)
17 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 18: Snowbank Petalite Pegmatite Discovery
Snowbank Petalite Pegmatite – 18 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 19: Separation Rapids Next Steps: Moving toward Phase 1 Production Facility
19 Separation Rapids Next Steps: Moving toward Phase 1 Production Facility › 2019 work: Continued process optimization work and permitting to extract up to 5,000 tonne bulk sample for pilot plant processing › 2020: $3-5 million program planned to prepare for construction of mine and process plant in
Slide 20: Will Scarlett Project, Ill: Rare Earths recovery from coal mine wastes
20 Will Scarlett Project, Ill: Rare Earths recovery from coal mine wastes › Avalon now a partner in a project to recover rare earths from coal wastes at a closed mine site in southern Illinois • Offers near term potential to recover rare earths (and other by-products) dissolved in acidic waste water
Slide 21: Will Scarlett Closed Coal Mine Site, Marion, Illinois
21 Will Scarlett Closed Coal Mine Site, Marion, Illinois One of approximately 13,000 small and mid-size abandoned coal mines in the eastern US (BLM)
Slide 22: Rare Earths Markets: What has changed since 2013?
22 Rare Earths Markets: What has changed since 2013? › Escalating demand for neodymium and praseodymium for use in high strength magnets - vital for electric motors in EV’s plus wind power, electronics and defense technology › Rising prices of neodymium and praseodymium › Limited supply sources outs
Slide 23: East Kemptville Tin-Indium
23 East Kemptville Tin-Indium A near term revenue opportunity in 2021-22 › Opportunity to sustainably fully rehabilitate the site through recovery of tin from stockpiles using new ore- sorting technology at a very low CAPEX › Mine produced from 1985-92, when it closed prematurely due to low tin pric
Slide 24: Metals Most Impacted by New Technology: Tin is No. 1!
24 Metals Most Impacted by New Technology: Tin is No. 1! Source: MIT / Rio Tinto , March, 2018
Slide 25: East Kemptville Location and Regional Infrastructure
25 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 26: East Kemptville Site Rehabilitation Concept
Canola grown on paper mill bio-solids on 26 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 27: Two Composite Views of Low Grade Ore Stockpile at East Kemptville
27 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 28: 2018 East Kemptville Small Scale Re-Development Model
28 2018 East Kemptville Small Scale Re-Development Model: No new areas disturbed! › Process low grade ore stockpile and near-surface, higher grade ore in existing pits at rate of 2,400 tpd (2 truckloads/hr) for tin recovery › Crushing-Milling-Gravity Concentration to recover tin (cassiterite) concen
Slide 29: Sensor-based Ore-sorting Technology
29 Sensor-based Ore-sorting Technology Currently being tested by Cronimet to recover tin concentrates 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 reagent
Slide 30: East Kemptville Re-development Concept as currently designed
30 East Kemptville Re-development Concept as currently designed: › Eliminates the historical environmental liability › Efficiently uses process reagents › Minimizes financial assurance costs Above: Current East Kemptville site Below: Artist rendering of site post-closure › Minimizes waste management
Slide 31: East Kemptville Project Next Steps for 2020
31 East Kemptville Project Next Steps for 2020 › Complete ore-sorting testwork by Cronimet • Initial results exceeding expectations on recoveries › Drilling of stockpile to map internal grade distribution › Finalize project financing and off-take agreements • Finalize transition arrangements with su
Slide 32: Cesium: another technology material supply chain now controlled by China
32 Cesium: another technology material supply chain now controlled by China › Tech applications include: Atomic clocks and GPS, Catalyst in plastics, Speciality glasses, Ion- propulsion motors, High density alkaline batteries, Coatings for solar cells, Pharmaceuticals › ~ 75% of cesium production is
Slide 33: Lilypad Property Access Map
ADVANCED MATERIALS INC. (@& AVALON Lilypad Property Access Map xX 47 PO ee N L id « ( egen aN ars || —— First Nation lands + Railway line -- Logging road — Road == Highway / Transit road Neskantaga fy —— Winter road Ere 0 50 100 km Lilypad ——— Pe Sg ak Pickle Lake Fort Hope oa hie a ce a oa oy BR AH
Slide 34: Pollucite Dyke
Pollucite Dyke › 340,000 tonnes @ 2.294% Cs2O and 0.037% Ta2O5 delineated in 2001-2003 drilling programs* › Cesium grades increase with depth, open at 300m below surface › “Western extension” new, undrilled zone of dykes 200m to southwest with two grab samples containing 4.62% and 2.11% Cs2O › Stron
Slide 35: Proposed 2020 Work Program
Proposed 2020 Work Program › Baseline biogeochemical and soil surveys over known pegmatite areas (Pollucite, Rubellite Dykes) › Biogeochemical and soil surveys over covered areas plus lithogeochemical sampling, particularly on the northern part of property, to identify new drill targets › Bulk sampl
Slide 36: Nechalacho Rare Earths Property Regional Infrastructure
36 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 37: Nechalacho 2013 Feasibility Study Basal Zone Development Concept
37 Nechalacho 2013 Feasibility Study Basal Zone Development Concept › Mining underground drift and fill/long- › Planned initial production of 7,000 tpy hole stoping at 2,000 tpd, or 730,000 separated REE oxides plus EZC (with Nb, Ta, HREE) tonnes per year (tpy) › CAPEX: › Flotation process to produc
Slide 38: Measured and Indicated Resources in the Basal Zone at Various NMR Cut-offs (August 2013)
38 Measured and Indicated Resources in the Basal Zone at Various NMR Cut-offs (August 2013) Tonnes % % % HREO/ % % % Basal Zone (millions) TREO HREO TREO ZrO2 Nb₂O₅ Ta₂O₅ US$345 NMR Cut-Off (Reflects entire Basal Zone) Measured 12.56 1.71 0.38 22.50 3.20 0.405 0.0404 Indicated 49.33 1.62 0.35 21.27
Slide 39: Co-ownership agreement with Cheetah Resources
39 Co-ownership agreement with Cheetah Resources › Avalon and Cheetah Resources Pty Ltd. signed a purchase and sale agreement in June 2019 under which Cheetah acquired ownership of the near surface T-Zone and Tardiff Zone resources for C$5 million cash and Avalon retains its 3% NSR type royalty (sub
Slide 40: The Nechalacho Property hosts multiple polymetallic deposits
40 The Nechalacho Property hosts multiple polymetallic deposits For illustrative purposes only. Not to scale.
Slide 41: Environmental and Social Responsibility at Nechalacho, Thor Lake, NWT
41 Environmental and Social Responsibility at Nechalacho, Thor Lake, NWT › Leaders in Indigenous 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 › Nechalacho REE Project Accommodation
Slide 42: 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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