Lithium Investing

Don Bubar Talks Lithium in Ontario

Don Bubar of Avalon Advanced Materials has been in the lithium business for over 20 years. In this interview, he speaks about the lithium market and about what to expect from Avalon’s Separation Rapids project in Ontario.

The excitement continues for lithium, and the space appears to be drawing more and more investor interest. However, there’s more to the lithium space than Tesla Motors (NASDAQ:TSLA) and Nevada.
To delve into the state of the market a bit more, the Investing News Network got in touch with Don Bubar, president and CEO of Avalon Advanced Materials (TSX:AVL). A veteran of the mining industry with over 20 years at the helm of Avalon—much of that with the company focused on lithium—Bubar certainly had some insights to share.
In the interview below, he speaks about demand for ever higher purities for lithium products, about Avalon’s history with lithium and about what investors can expect from Avalon and Separation Rapids for the remainder of the year. Watch the interview to hear what he had to say:

Interview Transcript
INN: So, a number of analysts we’ve spoken to see lithium prices rising on the back of increasing battery demand. What are your thoughts on where the lithium price is headed this year?
DB: I don’t think there’s any doubt that there’s going to continue to be upward pressure on lithium prices as the demand exceeds the supply. And as consumers around the world start to look for new supply sources after their existing contracts run out, I think they’re going to be faced with re-negotiating contracts at higher prices.
INN: Conversely, Chris Berry has said that for lithium juniors entering the space, cost production is more important than rising prices in order to compete with existing players. Do you agree and why or why not?
DB: Cost of production is a factor, no question about it but I think one has to remember that we’re not talking about an exchange traded commodity here. We’re talking about a specially engineered chemical product that has to be designed for the customers’ specifications. So, meeting product specifications in terms of product quality is actually an even more important criterion for a new producer to meet in order to get into the market place. Plus, they need to be able to make that product at a competitive cost.
INN: Can you talk a bit more about those product specifications?
DB: Yes, what we’re seeing now in the market place is demand for ever higher purities of the input critical materials that go into the cathode and anode chemistries of the lithium ion battery. That’s one of the ways they’re achieving ever better performance out of these batteries. So the demand trend seems to be towards three-nines and perhaps even four-nines purities on these things going forward.

INN: Okay. And of course, Avalon has a number of different properties but you recently shifted focus—maybe not so recently—to your lithium property. A lot of other juniors are jumping into the lithium space as well. What sets Avalon and Separation Rapids apart from the rest?
DB: Well, we’re a veteran of the lithium game. We’ve been in the lithium business for most of the 20 years that I’ve been running this company, so we shifted our focus back to lithium after a brief period of being focused on rare earth elements.
We had a resource that was pretty unique that we drilled off in the 1990s as a potential source of an industrial mineral, lithium mineral for the glass ceramics industry—which it still could serve. That’s a pretty strong market for lithium as well.
But we spent the last few years just waiting for the right kind of market demand to come along, to justify renewed investment in the project. And obviously, that’s happened in the last two years with the surge in demand for lithium and lithium ion batteries creating the opportunity for us to reactivate the project. So, now we’re looking at being able to serve this new market for lithium for batteries, as well as potentially serving the market for lithium minerals and glass ceramics.
INN: How is your PEA progressing at Separation Rapids?
DB: It’s coming along. Because most of the original work was oriented towards producing an industrial mineral for glass ceramics, we had to kind of step back and do all the work required to demonstrate how we could extract a derivative lithium compound from the ore mineral there, the lithium mineral petalite, to serve that market.
So, we’ve been doing that work over the last six months, and we’re now doing the last stage of laboratory work to demonstrate a process that will allow us to make lithium hydroxide, to the specifications the battery makers need. And then we’ll figure out what the costs are going to be associated with that so we can use that to complete our preliminary assessment. So, right now that work looks like it’ll be done around the end of June, which means we can get a PEA out this summer.
INN: Great, and what other catalysts can investors look forward to from Avalon over the next six months?
DB: Well, we think we should go back and do a little bit more drilling on this resource too. All the drilling we did to define the resource we know right now was done in the 1990’s. And we never found an end to it at that point in time. We had a resource that was big enough to serve the market that we saw in the 1990’s.
But with the market growing, it would serve our interests to see what the resource potential is. So we’re planning a drill program that will generate some news flow over the latter part of the year to test the depth potential of the resource and see what the depth potential really is there at Separation Rapids.
INN: Thank you so much for joining me, Don.
DB: My pleasure.

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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Avalon Advanced Materials is a client of the Investing News Network. This article is not paid for content

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