Avalon Advanced Materials Invited to Submit Full Project Proposal Under Natural Resources Canada's Critical Minerals Research, Development and Demonstration and Global Partnerships Initiative Program
Avalon Advanced Materials Invited to Submit
Full Project Proposal Under Natural Resources
Canada's Critical Minerals Research,
Development and Demonstration and Global
Partnerships Initiative Program
Toronto, Ontario--(Newsfile Corp. - August 27, 2026) -
Avalon Advanced Materials Inc.
(TSX:
AVL) (OTCQB: AVLNF) ("Avalon" or the "Company") has been selected to advance to the next round of
project proposals under Natural Resources Canada's Critical Minerals Research, Development and
Demonstration and Global Partnerships Initiative program.
Natural Resources Canada ("NRCan") invited Avalon Advanced Materials Inc. ("Avalon" or the
"Company") on June 30, 2026 to submit a Full Project Proposal to the Critical Minerals Research,
Development and Demonstration and Global Partnerships Initiative ("CMRDD-GPI") program. The
invitation followed Avalon's March 2026 Expression of Interest.
Avalon has now submitted its Full Project Proposal and is seeking approximately C$20 million of NRCan
funding to advance the 100%-owned Basal Zone at the Nechalacho Rare Earth Elements Project toward
a construction-ready engineering basis and demonstrate a Canadian processing pathway for producing
separated rare earth oxides. The invitation to submit a Full Project Proposal follows Avalon's March
2026 Expression of Interest and is not a funding decision or a commitment of funding by NRCan.
The proposed program would support three principal workstreams: feasibility-level engineering,
including development of an AACE Class 3 capital cost estimate by Wood Canada Limited; validation
and optimization of Engina Corporation's Hybrid Supercritical Refining ("HSR") process using existing
Nechalacho concentrate; and the design, construction and operation of a modular demonstration plant to
be tested at a Canadian rare earth processing facility and subsequently relocated to Nechalacho for an
on-site demonstration.
"This proposal is focused on advancing Nechalacho toward a financeable development plan," said Scott
Monteith, President and Chief Executive Officer of Avalon. "By integrating feasibility engineering with
process validation and demonstration, we believe the program can accelerate project de-risking and
establish a stronger foundation for commercial development."
Avalon is pursuing a diversified capital strategy as Nechalacho advances, including government
programs, non-dilutive funding, strategic partnerships, potential offtake support and project-level
financing opportunities.
"Securing non-dilutive and strategic capital is an important part of our approach to advancing
Nechalacho," said Lorin Crenshaw, Chief Financial Officer of Avalon. "Our objective is to match the
appropriate source of capital to each stage of development and use government and strategic funding
wherever possible to accelerate project de-risking and use shareholder capital efficiently."
The CMRDD-GPI programs are designed to advance Canada's critical minerals strategy by supporting
pre-commercial research, development, and demonstration activities that strengthen critical mineral
value chains and accelerate the commercialization of innovative mining and processing technologies.
The programs support projects that validate the feasibility and viability of critical mineral technologies
and processes, with the GPI additionally supporting projects undertaken with trusted international
partners to strengthen secure, resilient and sustainable critical mineral supply chains.
Avalon's Nechalacho project directly aligns with these objectives by advancing an innovative rare earth
processing technology from pilot-scale validation toward commercial readiness. The proposed program
would focus on process optimization, engineering and demonstration using existing Nechalacho
concentrate, supporting the development of a domestic pathway for producing separated rare earth
oxides, including magnet-critical neodymium-praseodymium ("NdPr"), dysprosium and terbium. The
project would contribute to Canada's ability to establish a secure, sustainable and diversified North
American supply chain for critical rare earth materials.
Advancing Nechalacho Toward Commercial-Scale Processing
The proposed HSR process combines caustic pretreatment with supercritical CO2 extraction and has
the potential to simplify conventional rare earth processing, reduce water and reagent intensity and
improve recovery.
Avalon is seeking funding to advance the Nechalacho project's rare earth processing technology toward
commercial readiness, generating engineering, operating and product-quality data needed to support
subsequent commercial development and project-financing activities through engineering, process
validation and demonstration.
The program will include detailed engineering and an AACE Class 3 capital cost estimate by Wood
Canada Limited; testwork with Engina Corporation to optimize the Hybrid Supercritical Refining process
using existing Nechalacho concentrate; and the design, construction and operation of a modular,
containerized demonstration plant capable of processing approximately one tonne of concentrate per
day. The demonstration will validate the process at both a Canadian processing facility and the
Nechalacho site, using existing material and requiring no new mining, drilling or sampling, positioning
the technology for commercial-scale development.
Advancing Canada's Path to Rare Earth Oxide Production
Canada does not currently produce separated rare earth oxides. Nechalacho contains one of the highest
combined magnet rare earth grades among advanced North American rare earth projects, including
neodymium and praseodymium, as well as dysprosium and terbium. When global rare earth prices
declined significantly in 2013, the economic case for the project was no longer viable, despite no
fundamental change to the underlying resource. The key challenge is processing, and the proposed
program is designed to address this critical gap.
Nechalacho contains both light and heavy rare earth elements, including the magnet-critical elements
neodymium, praseodymium, dysprosium and terbium, as well as tantalum, niobium and zirconium. These
materials are used in permanent magnets, electric vehicles, renewable energy, advanced manufacturing
and defence applications.
Target products include NdPr oxide for the permanent magnets used in electric vehicle traction motors
and direct-drive wind generators, dysprosium and terbium oxides for magnet thermal stability, as well as
samarium, yttrium and a zircon co-product. These magnet materials support both commercial and
strategic applications, including electric vehicles, renewable energy, defence systems, sensors,
uncrewed systems and specialized manufacturing capabilities identified in Canada's Defence Industrial
Strategy released in February 2026.
About Avalon Advanced Materials Inc.
Avalon Advanced Materials Inc. is a Canadian critical minerals company focused on advancing lithium
and rare earth elements-two of the fastest-growing segments of the global energy transition. The
Company is developing strategic assets to participate in high-growth markets and support the build-out
of secure North American supply chains. Avalon is advancing the Nechalacho Rare Earth Elements and
Zirconium Project in the Northwest Territories, which contains all light and heavy rare earth elements, as
well as zirconium, tantalum, and niobium-critical minerals used in advanced technologies across the
communications, defense, advanced technologies, and energy sectors. The Company is also focused
on vertically integrating the Ontario lithium supply chain through the development of Lake Superior
Lithium Inc., Ontario's first midstream lithium hydroxide processing facility, located in Thunder Bay. This
facility is expected to serve as a cornerstone of North America's integrated battery materials supply
chain, transforming northern Ontario lithium into essential inputs for transportation, grid storage, and
advanced manufacturing.
For further information regarding Avalon Advanced Materials Inc., please visit
www.avalonadvancedmaterials.com
, or call 416-364-4938.
Cautionary Statement Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable Canadian
securities legislation. Generally, forward-looking information can be identified by the use of forward-
looking terminology such as "add" or "additional", "advancing", "anticipates" or "does not anticipate",
"appears", "believes", "can be", "conceptual", "confidence", "continue", "convert" or "conversion",
"deliver", "demonstrating", "estimates", "encouraging", "expand" or "expanding" or "expansion",
"expect" or "expectations", "forecasts", "forward", "goal", "improves", "increase", "intends",
"justification", "plans", "potential" or "potentially", "promise", "prospective", "prioritize", "reflects",
"robust", "scheduled", "suggesting", "support", "top-tier", "updating", "upside", "will be" or "will
consider", "work towards", or variations of such words and phrases or state that certain actions, events
or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved".
Forward-looking information is subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance or achievements of the Company to
be materially different from those expressed or implied by such forward-looking information, including
those risk factors discussed or referred to in the annual information form of the Company dated
November 26, 2025 (the "AIF") under the heading "Description of the Business - Risk Factors".
Forward-looking information is based on the reasonable assumptions, estimates, analysis and
opinions of management made in light of its experience and perception of trends, current conditions
and expected developments, as well as other factors that management believes to be relevant and
reasonable in the circumstances at the date that such statements are made, but which may prove to
be incorrect. Although the Company believes that the assumptions and expectations reflected in such
forward-looking information are reasonable, undue reliance should not be placed on forward-looking
information because the Company can give no assurance that such expectations will prove to be
correct. Although the Company has attempted to identify important factors that could cause actual
results to differ materially from those contained in forward-looking information, there may be other
factors that cause results not to be as anticipated, estimated or intended. There can be no assurance
that such information will prove to be accurate, as actual results and future events could differ
materially from those anticipated in such information. Accordingly, readers should not place undue
reliance on forward-looking information. The Company does not undertake to update any forward-
looking information, except in accordance with applicable securities laws.
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