Avalon Advanced Materials Provides Year-to- Date Progress Update on Nechalacho Rare Earths Project Company establishes dedicated rare earth project vehicle, opening Yellowknife office, advancing updates to its 2013 Definitive Feasibility Study (DFS) via a Preliminary Economic
Avalon Advanced Materials Provides Year-to-
Date Progress Update on Nechalacho Rare
Earths Project
Company establishes dedicated rare earth project vehicle,
opening Yellowknife office, advancing updates to its 2013
Definitive Feasibility Study (DFS) via a Preliminary Economic
Assessment (PEA), and strengthening development pathway
for one of North America's most strategically significant rare
earth resources
Toronto, Ontario--(Newsfile Corp. - May 19, 2026) -
Avalon Advanced Materials Inc.
(TSX: AVL)
(OTCQB: AVLNF) ("Avalon" or the "Company") is pleased to provide a year-to-date progress update on
its Nechalacho Rare Earth Elements and Zirconium Project, located in the Northwest Territories, as it
advances efforts to build North America's supply and processing of critical rare earth elements essential
to future technologies and supply chain security.
Avalon has taken a series of important steps in 2026 to re-activate and advance Nechalacho as a
strategic Canadian rare earth project capable of contributing to secure North American and allied supply
chains. These steps include the establishment of a new dedicated rare earth subsidiary designed to
provide a focused platform for advancing Nechalacho, engaging strategic partners, and supporting
potential project-level capital formation, the appointment of experienced northern project leadership,
moving forward with plans to establish a Yellowknife office, and the advancement of a preliminary
economic assessment (PEA) to refresh the project's existing (2013) definitive feasibility study (DFS)-
level technical work.
"Nechalacho is no longer simply a legacy rare earth asset with a historic technical foundation," said
Scott Monteith, President and Chief Executive Officer. "Avalon is now taking concrete steps to reposition
and advance the project as an active development platform with dedicated leadership, northern
presence, updated economics, and a clearer pathway toward strategic partnerships and project-level
capital."
Year-to-Date Progress at Nechalacho
Over the past several months, Avalon has advanced several key initiatives intended to support the next
stage of project development:
Established Magmic Rare Earths, Inc. as the dedicated subsidiary through which Avalon intends to
advance the Nechalacho project. This structure is expected to provide a focused platform for
project-level development, strategic partnerships, government funding, and potential third-party
capital participation.
Appointed Burl Joseph as Project Director to guide technical execution, northern engagement,
development planning, and coordination of the updated engineering and economic work.
Advancing plans to open a Yellowknife office to strengthen Avalon's northern presence, support
Indigenous and regional engagement, improve project coordination, and prepare for future
technical, permitting, and development activities.
Advancing an updated PEA to refresh and update the project's 2013 DFS-level technical work
using current market conditions, cost structures, development assumptions, and processing
alternatives.
Continuing to evaluate rare earth processing pathways, including technologies that may support
improved recovery, enhanced environmental performance, and reduced reliance on processing
capacity currently concentrated outside North America and allied jurisdictions.
"Against the backdrop of a fundamental shift in North American industrial policy, national security
priorities, and critical minerals supply-chain strategy, these actions are intended to move Nechalacho
from a long-recognized strategic asset toward an active development platform," said Lorin Crenshaw,
Chief Financial Officer. "The objective is to create a clearer technical, commercial, and capital formation
pathway for a project that we believe has significant strategic relevance to Canada, the United States,
and allied supply chains."
Nechalacho's Strategic Importance
Nechalacho is one of North America's most advanced rare earth projects and is distinguished by its
concentration of magnet-critical light and heavy rare earth elements, including neodymium,
praseodymium, dysprosium, and terbium. In addition to hosting 15 of the 17 rare earth elements,
Nechalacho contains zirconium-bearing mineralization and other strategically relevant elements,
including gadolinium, samarium, ytterbium, and yttrium, which may support broader industrial and
defense-related applications.
Rare earth elements are essential inputs for permanent magnets used in electric motors, defense
systems, aerospace platforms, robotics, wind turbines, precision-guided systems, and advanced
electronics. Heavy rare earth elements such as dysprosium and terbium are particularly important in
high-performance magnets that must operate under elevated temperature and demanding performance
conditions.
Global rare earth mining, separation, refining, and magnet production remain highly concentrated in
China. This concentration creates a structural vulnerability for North American and allied supply chains,
particularly for heavy rare earths and other magnet-critical materials. Avalon believes that advancing
Canadian rare earth resources such as Nechalacho represents a practical step toward diversifying
supply and supporting greater supply-chain resilience.
Updating the Development Plan
Avalon's current technical work is focused on updating the project's prior DFS-level foundation to reflect
current development realities. The updated PEA is intended to assess contemporary capital and
operating cost assumptions, market conditions, project sequencing, mining approaches, processing
options, and potential development scenarios.
The update is not being driven by a change in the underlying strategic importance of the deposit. Rather,
Avalon believes that the broader market, policy, and supply-chain environment for rare earths has
changed materially since the prior feasibility work was completed. Critical minerals are now viewed not
only as industrial inputs but also as strategic assets tied to national security, economic resilience,
electrification, advanced manufacturing, and allied defense preparedness.
The PEA is expected to be completed in fall 2026.
Mining Approach and Coordinated Development Potential
Avalon's current development concept contemplates underground access to the Basal Zone below 150
metres, targeting the deeper rare earth-bearing portion of the deposit while limiting surface disturbance
and preserving flexibility in relation to near-surface activity.
Based on Avalon's current understanding, underground development may be planned in a manner that is
operationally distinct from potential near-surface activity by other parties, subject to appropriate
engineering, permitting, safety, water management, and cooperation arrangements.
Coordinated open-pit and underground mining arrangements are not unprecedented in the mining
industry, but they require disciplined technical planning and formal operating protocols. Key
considerations include geotechnical engineering, crown-pillar design, boundary management, blast
coordination, subsidence monitoring, water management, ventilation planning, surface access, and
shared infrastructure.
Avalon believes these matters are technically manageable through rigorous mine planning, independent
engineering review, and a comprehensive cooperation framework. Such an approach could allow
multiple zones of the broader resource area to be developed and monetized in a coordinated manner
while maintaining appropriate safety, environmental, operational, and regulatory controls.
Processing Pathway and North American Supply-Chain Relevance
Avalon is also evaluating processing alternatives that could support the conversion of Nechalacho
mineralization into saleable rare earth products. While the project benefits from a substantial technical
foundation, Avalon believes that processing remains the key gap to be solved across the North
American rare earth supply chain.
The Company is assessing rare earth processing technologies and flowsheet alternatives that may
reduce reliance on conventional processing routes that are intensive in acid and solvent use, improve
recovery potential, and support the development of domestic and allied processing capacity. These
efforts are expected to form part of the updated PEA and subsequent technical work.
Avalon believes this processing work is essential to positioning Nechalacho as more than a mineral
resource. By advancing potential pathways from resource development through rare earth product
generation, the Company aims to support a more secure and integrated North American supply chain for
magnet-critical materials.
Positioning Nechalacho for the Next Stage
Avalon's year-to-date actions are intended to reposition Nechalacho for a more active and strategically
relevant stage of development. The Company believes the combination of a dedicated rare earth project
platform, expanded northern presence, experienced project leadership, updated technical work, and
growing supply-chain urgency provides a strong foundation for engagement with government agencies,
Indigenous and regional stakeholders, strategic partners, downstream customers, and potential capital
providers.
Government participation, strategic partnerships, downstream customer engagement, and project-level
capital are expected to be important elements of the broader development pathway. Avalon believes
Nechalacho has the potential to contribute meaningfully to North American and allied efforts to secure
rare earth feedstock and processing optionality for magnet-critical materials.
The establishment of Magmic Rare Earths, Inc. is intended to provide a focused structure for advancing
Nechalacho, supporting project-level partnerships, and creating a clearer pathway for strategic and
capital participation.
"Nechalacho has the scale, technical foundation, and strategic mineral profile to contribute to a more
secure and resilient North American rare earth supply chain," said Mr. Monteith. "Avalon's work in 2026
is about turning strategic relevance into a practical development pathway - one supported by technical
discipline, local engagement, potential partners, and a clear capital formation strategy."
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 yttrium, 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.
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