Avalon and Engina Successfully Recovered 15 Rare Earth Elements with Breakthrough Processing Technology for Nechalacho Project, NWT Canada

On November 24, 2025, Avalon announced the successful completion of a joint assessment with Engina Corporation for its Nechalacho Rare Earth Element (REE) project in the NWT. The assessment confirmed that Engina's proprietary Hybrid Supercritical Refining (HSR) process achieved rare earth recoveries exceeding 90% in preliminary, bench-scale testing on Nechalacho concentrate. The company states this breakthrough technology shows potential for significant reductions in chemical consumption, lower energy intensity, and the elimination of sulphuric acid operations, which would reduce the environmental impact compared to conventional methods. The CEO, Scott Monteith, noted that approximately $100 million has been spent on the project and believes it is the most advanced REE project that could be in production "shortly."

This news is materially positive, but the CEO's optimism must be tempered with caution. The primary obstacle for Western rare earth projects is not the resource in the ground, but the economic and environmental challenge of processing. The announcement of a potential processing solution that is cleaner and more efficient directly addresses Nechalacho's main hurdle. This development provides a tangible technological basis for the updated Feasibility Study, which was a stated use of proceeds from the recent C$18.65 million financing.

However, the key words are "preliminary bench-scale testing." There is a vast difference and significant technical risk in scaling a process from a laboratory bench to a commercial-scale production facility. While a >90% recovery rate is excellent, it is not guaranteed to hold at scale. The market's reaction has been muted, with the stock price drifting down from C$0.06 to C$0.05, suggesting skepticism or that the market is waiting for more concrete, pilot-scale results before pricing in this development.

Looking at the company's progression, this news follows a similar announcement in October 2025 regarding a breakthrough alkaline leach process with Metso for its lithium hydroxide facility. Avalon is clearly executing a strategy of de-risking its projects on the processing front before committing to expensive feasibility updates. While positive, this news does not change the fundamental long-term risks of financing and permitting, nor does it guarantee economic viability. It is a necessary and positive step, but not a definitive game-changer at this early stage.

Avalon Advanced Materials Inc. is a Canadian company focused on developing critical mineral assets required for the green energy and technology sectors. The company is transitioning from a long-time explorer to a vertically integrated developer and mid-stream processor.

Its two flagship initiatives are: 1. Nechalacho Rare Earth Element (REE) Project: Located in the Northwest Territories, this is an advanced-stage project with a large REE resource. A 2013 Feasibility Study exists, but it is now outdated. The project is the subject of the latest news regarding a new processing technology. 2. Ontario Lithium Business: This includes a joint venture with industrial minerals giant Sibelco on the Separation Rapids Lithium Project and the planned development of the Lake Superior Lithium processing facility in Thunder Bay, designed to produce battery-grade lithium hydroxide for the North American EV market.