Rain City Resources Seeks Alternative Relationship with Avonlea

Executive Summary

• Rain City Resources elected not to make the second US$1.2 million payment under its Option Agreement with Avonlea Environmental Technologies, resulting in termination of that agreement.
• The Company is actively negotiating a licensing arrangement for Avonlea’s ACCELi cavitation technology to accelerate commercialisation efforts, particularly in South America.
• Management views the shift from an option purchase to a licensing model as a positive strategic step and will provide further details when available.

Key Details

• Option Agreement Termination: Rain chose not to remit the scheduled US$1.2 million second payment under the Option Agreement dated June 12 2024 (as amended), thereby terminating the agreement with Avonlea Environmental Technologies Corp.
• Licensing Negotiations: Rain is in “active discussions” with Avonlea to secure a licensing arrangement that would grant Rain access to ACCELi cavitation technology, aiming to fast‑track commercial opportunities for both parties.
• Strategic Rationale: Management believes the licensing route will enable quicker market entry in South America and allow Avonlea to focus on scaling its pilot plant in Pennsylvania.
• Financial Impact: No immediate cash outflow from the US$1.2 million payment; potential future licensing fees or royalty structures not disclosed.
• Future Disclosure: Rain indicated that additional announcements regarding the licensing arrangement will be made “in due course.”

Notable Quotes

“The termination of the Option Agreement was taken following discussions with our financial advisors and Avonlea. By seeking a licensing arrangement with Avonlea, Rain will seek to fast‑track opportunities in South America leaving Avonlea to build on the success of the pilot plant in Pennsylvania. We see this as a positive step forward for the Company.” – Benjamin Hill, CEO, Rain City Resources

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