Avalon Advanced Materials Inc. (TSX: AVL | OTCQB: AVLNF) has announced the signing of a binding term sheet to create a new joint venture with Sibelco, a global leader in materials solutions.
The company’s mission is to vertically integrate lithium processing in Ontario, positioning the province as an integral part of the North American supply chain for EV batteries.
Scott Monteith, CEO of Avalon said, “This strategic partnership represents a significant step forward in scaling our business towards full vertical integration of our lithium production.”
“Sibelco’s investment is a major vote of confidence in our vision, resources, and capabilities by a respected and established international operator and now partner.”
Avalon has issued to Sibelco, on a non-brokered private placement basis, 109,692,764 common shares of Avalon for aggregate proceeds of C$10M, and a secured convertible debenture in the principal amount of C$3M.
The C$63M transaction results in Sibelco owning approximately 19.9% of the issued and outstanding common shares and provides Avalon with a first tranche of funding to advance the company’s lithium production and processing goals across its suite of lithium mineral assets, led by Separation Rapids in northwestern Ontario.
The proceeds from the private placement will be used by Avalon to fund the acquisition of industrial land for a mid-stream lithium-hydroxide processing facility in Thunder Bay, Ontario, for working capital, and general corporate purposes.
Avalon and Sibelco will work together to enter into this long-form joint venture agreement as soon as possible with a view to execution on or before 31 August 2023.
Hilmar Rode, CEO of Sibelco said, “Our partnership with Avalon will focus both on the clean energy growth agenda and the technical glass and ceramics markets in which Sibelco has deep and time-tested expertise”.
“This dual-market strategy combined with a cash-generative business plan will lay the foundation for accelerated growth, and ultimately the venture’s sustained success going forward.” Rode said.
To find out more, please visit www.avalonadvancedmaterials.com.
