Overview
Commodities markets are radically transforming as the world embraces electric vehicles (EVs) and other clean energy technologies. The surge in demand for green tech makes critical mineral commodity markets an attractive option for many investors. Moreover, most critical minerals necessary for future technologies have a steadily increasing demand while supply struggles to keep up, evidenced by the tightening lithium supply in China. As a result, some analysts expect battery metals markets to remain elevated for many years to come.
Lithium is the most discussed critical mineral impacting the battery materials market, but it’s not the only element enabling clean technologies. Last year, the International Energy Association (IEA) published a study highlighting other metals need to support the global transition to clean energy, including copper, platinum group metals, zinc and aluminum. Another study by IEA indicates that total mineral demand derived from clean technology related to EVs and battery storage will go from 0.4 million tonnes in 2020 to 21.5 million tonnes in 2040, based on the ‘net-zero by 2050’ scenario. So how will the mining industry satisfy this massive increase in demand?
Avalon (TSX:
AVL, OTCQB:AVLNF) is a Canadian mineral exploration and development company targeting
multiple critical minerals necessary for developing and manufacturing clean technologies. This is highlighted by the Company’s project portfolio, containing assets known for lithium, rare earth elements, cesium, tantalum, rubidium, tin, indium, and other rare elements. The Company has two key projects and three additional projects in its pipeline.
The unique Separation Rapids Lithium Project has the potential to supply two distinct lithium markets: high strength glass-ceramics, and lithium battery materials for energy storage. The project covers 10,910 acres and is 100-percent-owned by Avalon. The Company is currently drilling at depth on the Big Whopper pegmatite to define the ultimate size potential of the main lithium resource on the property, as it remains open to depth. The Company also plans to drill a new lithium pegmatite discovery on the northwest part of the property called Snowbank.
Based mainly on the Big Whopper pegmatite resource, Avalon plans to establish Ontario’s first lithium refinery (for lithium hydroxide production) in Thunder Bay. The refinery strategically aligns with the Ontario Critical Minerals strategy supporting green solutions and local economic opportunities. Once in production, this facility will support the development of other lithium pegmatite resources in northwestern Ontario. Avalon is currently planning to acquire an industrial site on the lakefront in Thunder Bay, Ontario, which will be the future location of the planned lithium refinery.
Avalon commenced the roadwork and site preparation work for the installation and commissioning of its demonstration Dense Media Separation (DMS) plant in 2022. The DMS plant is expected to be operational by July 2023 and will produce petalite concentrate product samples and potential by-products, including rubidium-bearing K-feldspars, which are also used in certain ceramic applications.
The Company also entered into an offtake agreement with a major non-Chinese international glass ceramic manufacturer in 2022, for the purchase of petalite concentrates produced by DMS technology from the Big Whopper pegmatite.
Separation Rapids Lithium Project Highlights:
- Established Infrastructure: The project has road access and is close to clean hydro-power, allowing for lithium production along with several by-products with little waste and no significant environmental impact.
- Significant Exploration Completed: Avalon Advanced Materials acquired the property in 1997 and has expended well over C$15 million on exploration and development work. Historical exploration includes 69 exploration drill holes and additional work focused on tantalum potential. More recently, in 2017 and 2018, Avalon carried out additional drilling to expand the lithium resource and provide better definition of the lithium mineralogical zoning in the total resource, which resulted in an updated PEA being prepared.
- Robust Resource Estimate: As of May 2018, the project contains 8.405 million tonnes of ore in the measured and indicated category with 1.408 percent lithium, 0.007 percent tantalum, 0.015 percent cesium and 0.365 percent rubidium oxide. There are an additional 1.791 million tonnes of ore in the inferred category, bringing the total to over 10 million tonnes. This data is based on 72 drill holes drilled between 1997 and 2017.
Lilypad Cesium-Tantalum Project Highlights:
- Strong cesium lithogeochemical anomalies in surrounding volcanic rock outcrops.
- Assays of rock samples received to date have confirmed significant cesium values in four LCT dykes on the property with three samples assaying greater than 1% Cs2O.
- Two of the highest cesium values reported in this work are from the Western Extension of the Pollucite Dyke, about 180 metres west of the closest historic drill hole indicating potential to at least double its strike length.
- Samples assaying at or greater than 1% Cs2O were also obtained from the Rubellite Dyke, a second pegmatite with high tantalum enrichment located about 500 metres east of the Pollucite Dyke.
- Both the Rubellite and Pollucite Dykes also contain significant tantalum mineralization assaying up to 0.11% Ta2O5 in the Pollucite Dyke and 0.101% Ta2O5in the Rubellite Dyke.
- Two other little-explored pegmatites known as the Baseline and Opie Dykes were also found to contain significant cesium values.
- Some samples are also highly enriched in lithium where it occurs mainly in coarse grained spodumene. One sample from the Spodumene Dyke with coarse spodumene crystals returned 3.34 percent Li2O and the six samples collected averaged 0.7 percent Li2O.
Avalon's 100 percent-owned Lilypad Cesium-Tantalum project covers 3,108 hectares and consists of 14 claims, associated with a field of cesium, tantalum and lithium (LCT) pegmatites. The property is located 150 km northeast of Pickle Lake, Ontario, near the Eabametoong First Nation community of Fort Hope. It is presently only accessible by air or winter road and has seen little recent exploration.
Cesium is a rare element in a growing demand for many new technologies, but with very limited supply following the cessation of mine production from the world's largest historical producer, the Tanco mine, near Bernic Lake, Manitoba. Cesium is a widely used advanced materials with uses in specialty drilling fluids; atomic clocks; electric power devices that convert heat to energy; photoelectric cells for medical devices and videography; and ion engines designed for space crafts on extended missions. Tantalum is very rare, averaging just 2 ppm in the earth's crust. Its ability to store electricity in small capacitors has allowed the miniaturization of aviation electronics, computers, and all handheld electronic devices.
In 2001, Avalon drilled the cesium-rich Pollucite Dyke, and a preliminary historic resource was estimated to contain roughly 340,000 tonnes grading 2.294 percent Cs2O and 0.037 percent Ta2O5 (plus lithium) on nine holes drilled to a maximum vertical depth of 250 metres and along a strike length of just 140 metres, remains open for expansion to depth and along strike.
Management Team
Scott Monteith - Interim CEO and Director
Scott Monteith joined Avalon as the interim CEO in May 2023. He is an entrepreneur and business owner with a successful track record of moving inventions from ideation to commercial success. Monteith is currently the chairman of Monteco Ltd., Cable House Capital Ltd. and Imtex Membranes Corporation. Monteith has extensive experience in the areas of marketing, manufacturing, technology transfer, technology licensing, new product development, patent management, corporate development, international business, M&A, investing, government affairs, board governance and strategic planning. An intuitive individual, he possesses strong communication, team building and management skills. Monteith is the founder of Monteco Ltd. and has served as its president and CEO since 1995. Since its inception, Monteco has launched a successful portfolio of companies that include Biox, Imbrium Systems, Green Turtle, Filamat Composites, Imtex Membranes and Optomem Sensors.
Rickardo Welyhorsky - Vice-President of Operations and Chief Operating Officer
Rickardo Welyhorsky is a registered professional metallurgical engineer with over 29 years of experience spanning all levels of project development and operations in the mining and metals industry. He brings to Avalon a wealth of industry experience within various roles including metallurgical test work, feasibility study work, engineering, construction, commissioning, start-up as well as operations and maintenance. While most of his recent experience has been in the gold sector, his vast experience will mesh well with the development needs to advance the Separation Rapids Lithium Project as well as the proposed lithium refinery. Welyhorsky has a background in chemical engineering technology and environmental management from Cambrian College in Sudbury, Ontario as well as a bachelor's degree in metallurgical engineering from Laurentian University.
R.J. (Jim) Andersen - Vice-President of Finance, Corporate Secretary and CFO
Jim Andersen is a chartered professional accountant with 30 years of experience in the mining industry. He graduated with high distinction from the University of Toronto with a bachelor’s of commerce degree, then started his career with the mining services team at Coopers & Lybrand in Toronto, Ontario. He received his chartered accountant designation in 1993, after having placed 20th in Ontario on the 1992 Uniform Final Exam. Andersen began his own accounting career in 1994 with his father’s accounting firm, Forbes Andersen & Co., and was in charge of Avalon’s audit from 1996 to 2000, prior to joining the company as its CFO in 2001.
Cindy Hu - Controller
Cindy Hu joined Avalon Advanced Materials in 2007, prior to which she was a senior manager with the accounting firm Forbes Andersen & Company. She is a chartered professional accountant with over 20 years of experience in public accounting practice and financial reporting, primarily for junior public companies and private wealth management portfolios. Hu earned her bachelor of commerce degree from Laurentian University in 1996.
Zeeshan Syed - Vice-President, External Affairs
Zeeshan Syed is a graduate of the London School of Economics with a master’s of comparative politics and economics degree. He has over fifteen years of multi-sector executive leadership and brings deep expertise as an international business development expert, climate change negotiator, nonprofit founder, and natural resources regulator. This provides Syed with a unique perspective of an energy system increasingly marked by change and disruption. Prior to joining Avalon Advanced Materials in 2019, Syed was focused on public-private partnerships and management in public service, the nonprofit sector, and politics. He has served in the Office of the Prime Minister, with the Government of Alberta, and with the United Nations Secretariat.
Rickardo Welyhorsky, P. Eng. – Vice-President, Operations
Rickardo Welyhorsky recently joined Avalon as our new VP of Operations and COO. Rickardo has over 29 years of Canadian and International experience in project engineering and operations management, maintenance, construction, commissioning, start-up, detailed design, feasibility study work and metallurgical test work in gold, silver, uranium, nickel, copper and diamonds. He has experience in all levels of Project Development in the Mining and Metals industry. While most of his recent experience is in the gold mining sector, he was very interested in getting involved in the development of an advanced lithium project like Separation Rapids. He has degrees in Chemical Engineering Technology and Environmental Management from Cambrian College in Sudbury, Ontario as well as a Bachelor’s degree in Metallurgical Engineering from Laurentian University which is also located in Sudbury.
Georgi Doundarov - Senior Metallurgical Consultant
Georgi Doundarov has over 30 years of extensive managerial, operations, technical, project, and financial experience in Canada, Europe, and Asia. His experience covers the whole life cycle of a mine from studies, engineering, construction, commissioning and operations to closure. In addition, he has in-depth technical expertise in process engineering, plant design, construction, commissioning and closure, project and operations management, plant evaluation and optimization, NI 43-101 compliant feasibility studies, metallurgical testing. He also has expertise in research and development for base, precious, ferrous, and specialty metals and industrial minerals. qualified person under NI 43-101, professional engineer of Ontario, Certified Project Management Professional (PMP) under the PMI, Certified Cost Professional (CCP) under the AACEI.
Amiel Blajchman - ESG and Sustainability Consultant
Amiel Blajchman is a professional agrologist and a Canadian expert in environmental and social impact assessment and community engagement. He has over 19 years of experience working for private sector clients, Indigenous communities, government agencies, mining companies. Blajchman has experience working with international multilateral banks in managing the environmental, social, and governance (ESG) risks of complex, high-profile projects.
Blajchman refined his expertise during senior roles leading Cedar Water Strategy, his ESG consulting firm. He served as lead sustainability executive with multiple mining companies, managing more than 50 employee departments with annual budgets of greater than US$14 million. Amiel has delivered impact assessment training to industry, community, and government, serving as a senior advisor to federal deputy ministers. He has a strong reputation for success in the industry with a proven track record managing natural resource sector projects. Blajchman has experience working in over nine countries on four continents and is fluent in both French and English. Currently, he is the vice chair of Ve’ahavta: Jewish Humanitarian Response, chair of Ve'ahavta risk management and governance committees, and has served on various other charitable boards. Blajchman has also been involved in developing domestic emission trading regulations and greenhouse gas (GHG) offset systems.
Donald S. Bubar - Director
Don Bubar is a geologist with over 40 years of experience in mineral exploration and development in Canada. Bubar has a B.Sc. degree from McGill University and an M.Sc. from Queen’s University. From 1984 to 1994, he worked for Aur Resources as an exploration manager and later vice-president of exploration. Bubar has been president and CEO of Avalon from 1995 to 2023. He served as a director of the Prospectors and Developers Association of Canada (PDAC) for nine years and chair of its Aboriginal Affairs Committee from its creation in December 2004 until retiring from the PDAC board in March 2013. Throughout his career, he has been an advocate for increased Indigenous participation in the mineral industry, first through the PDAC, and later through the NWT and Nunavut Chamber of Mines. In addition, Bubar serves on the advisory board of the Faculty of Science of McGill University and on the board of directors of PDAC's earth science education program; Mining Matters.
Other Staff and Consultants
- William Mercer, Ph.D., P.Geo, Geologist (former VP, Exploration, now retired)
- Chris Pedersen, P.Geo., Consulting Project Geologist
- Mark Wiseman, BSc (Hon), MBA, (former VP, Sustainability, now retired)
- Mary Leung, Office Manager
Note 1: Michael Anderson has agreed to subscribe for his entitlements under the Offer ($28,000) and in addition to this has entered into a priority sub-underwriting agreement with the Underwriter for $50,000.
Figure 1. Macs Well and Cabbage Well REE targets, Aerial Photo (top), Thorium (Th) radiometric anomalies (middle) and SENTINEL-2 high-resolution, multi-spectral imaging (bottom) of Iron oxides.
Figure 2. Distribution of Th radiometrics anomalies showing possible REE ironstone occurrences.
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