Avalon Enters into Preferred Share Financing Agreement for Gross Proceeds of $1.5 million and Completes $362,000 Flow-Through Private Placement
Avalon Enters into Preferred Share Financing Agreement
for Gross Proceeds of $1.5 million and Completes
$362,000 Flow-Through Private Placement
Toronto, Ontario--(Newsfile Corp. - December 22, 2017) -
Avalon Advanced Materials Inc.
(
TSX
: AVL) (
OTCQX
: AVLNF)
("Avalon" or the "Company") is pleased to announce that it has entered into a preferred share purchase agreement (the
"Agreement") with an entity managed by The Lind Partners, a New York based asset management firm ("Lind"). The financing
will involve the issuance of 300 Series B1 Preferred Shares (the "Preferred Shares") on a private placement basis at a price of
$5,000 per Preferred Share for gross proceeds of $1,500,000. The proceeds will be used for ongoing market development
work, metallurgical studies and preliminary engineering work on the Separation Rapids Lithium Project and for general working
capital purposes. The transaction is expected to close the week of January 1, 2018.
The Preferred Shares do not carry a dividend and have a redemption value per share that starts at $5,000 and increases by
$250 per share each quarter over the next 24 months, to a cap of $6,750 per share. After the four month Hold Period (defined
below), the Preferred Shares can be converted by Lind into common shares of the Company at a price per common share equal
to 85% of the five-day volume weighted average price of the common shares on the Toronto Stock Exchange (the "TSX")
immediately prior to the date that notice of conversion is given.
In conjunction with the closing, Lind will receive a commitment fee of $75,000 and 6,250,000 common share purchase warrants.
Each warrant entitles the holder to purchase one common share of the Company at a price of $0.15 per common share until 60
months after closing.
Pursuant to Canadian securities laws, the securities issuable under this private placement will be subject to a hold period (the
"Hold Period"), which expires four months and one day after closing. After the Hold Period, Lind has the basic right to convert 15
Preferred Shares into common shares of the Company on a monthly basis, subject to certain conversion limits set out in the
Agreement, however Lind is permitted to convert up to 60 Preferred Shares on a monthly basis in the event such amount does
not exceed 20% of the Company's 20-day traded volume of common shares on the TSX immediately prior to the date of delivery
of a conversion notice.
Lind will also be entitled to accelerate its conversion right to the full amount of the redemption value applicable at such time, or
demand repayment of the applicable redemption value per share in cash, upon the occurrence of certain events as set out in the
Agreement. The Company has the right to redeem the Preferred Shares at any time after the Hold Period at a small premium to
the redemption value. The Company has floor price protection such that if any conversion results in an effective conversion price
of less than $0.10 per common share, then the Company has the right to deny the conversion and instead redeem the Preferred
Shares that were subject to that conversion for the redemption amount in cash plus a 5% premium.
At any time while any Preferred Shares are outstanding, Lind has the option of subscribing for up to an additional 50 Series B2
Preferred Shares at a price of $5,000 per share and under the same terms and conditions as the initial financing, subject to
certain triggering events and subject to the prior approval of the TSX.
The Company has received conditional approval of the TSX in connection with the completion of the Series B1 Preferred Share
private placement.
Phillip Valliere, Managing Director at Lind said, "Lind is pleased to make this follow-on investment in Avalon, increasing our total
investment to $4,000,000. We remain confident that management will successfully advance the Separation Rapids Lithium
Project and we are happy to provide our continued support to the Company."
Don Bubar, Avalon's President and CEO commented, "Lind continue to be solid supporters of the Company's development
plans for both the Separation Rapids Lithium and East Kemptville Tin Projects. This preferred share financing model achieves a
balance that mitigates some of the risk of excessive dilution to our shareholders while providing Lind with some downside
protection."
Flow-Through Private Placement
In addition to the above transaction, the Company has also completed a non-brokered private placement consisting of
2,500,000 flow-through shares at a price of $0.145 per share for gross proceeds of $362,500.
In conjunction with this private placement, Avalon paid finder's fees of $19,140 and issued 132,000 non-transferrable finder's
warrants, with each finder's warrant being exercisable to acquire one common share of the Company at a price of $0.15 for a
period of 24 months from today. Pursuant to Canadian securities laws, the securities issuable under this private placement are
subject to a hold period which expires four months and one day from the date of issuance. The proceeds from this offering will be
used primarily to continue to advance the Company's Separation Rapids Lithium Project.
This news release is not an offer of securities for sale in the United States. The securities have not been and will not be
registered under the US Securities Act of 1933, as amended (the "US Securities Act"), and may not be offered or sold in the
United States or to US persons (as defined in Regulation S under the US Securities Act) absent registration or an applicable
exemption from registration. All currency reported in this release is in Canadian dollars.
About The Lind Partners
The Lind Partners is a New York-based institutional fund management firm focused on small-and mid-cap companies publicly
traded in Canada, Australia and the UK across mining, oil & gas, biotech and technology. Lind employs a multi-strategy
investment approach: direct investments of new capital; participation in syndicated equity placements; IPO/pre-IPO investments;
and selective open market trades. Since 2009, the Lind team has completed over 75 direct investments totaling over $600
million in value.
About Avalon Advanced Materials Inc.
Avalon Advanced Materials Inc. is a Canadian mineral development company specializing in niche market metals and minerals
with growing demand in new technology. The Company has three advanced stage projects, all 100%-owned, providing investors
with exposure to lithium, tin and indium, as well as rare earth elements, tantalum, niobium, and zirconium. Avalon is currently
focusing on its Separation Rapids Lithium Project, Kenora, ON and its East Kemptville Tin-Indium Project, Yarmouth, NS. Social
responsibility and environmental stewardship are corporate cornerstones.
For questions and feedback, please e-mail the Company at
, or phone Don Bubar, President & CEO at 416-
364-4938.
This news release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation
Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements include, but are not limited
to, statements related to the anticipated closing of the financing and how the Company plans to use the net proceeds from the
financings. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as
"potential", "scheduled", "anticipates", "continues", "expects" or "does not expect", "is expected", "scheduled", "targeted",
"planned", or "believes", or variations of such words and phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will be" or "will not be" taken, reached or result, "will occur" or "be achieved". Forward-looking
statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of Avalon to be materially different from those expressed or implied by such forward-
looking statements. Forward-looking statements are based on assumptions management believes to be reasonable at the
time such statements are made. Although Avalon has attempted to identify important factors that could cause actual results
to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be
as anticipated, estimated or intended. Factors that may cause actual results to differ materially from expected results
described in forward-looking statements include, but are not limited to market conditions, and the possibility of cost overruns
or unanticipated costs and expenses as well as those risk factors set out in the Company's current Annual Information Form,
Management's Discussion and Analysis and other disclosure documents available under the Company's profile at
www.SEDAR.com
. There can be no assurance that such statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such statements. Such forward-looking statements have been
provided for the purpose of assisting investors in understanding the Company's plans and objectives and may not be
appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking statements. Avalon
does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable
securities laws.