Avalon Advanced Materials Announces Finnvera Letter of Interest Supporting Potential EUR 100 Million Financing for Metso Equipment and Services at Thunder Bay Lithium Processing Facility

Avalon Advanced Materials Inc. announced that Finnvera plc, Finland's official export credit agency, has issued a non-binding letter of interest to potentially finance approximately EUR 100 million in equipment and services for the company's proposed Thunder Bay lithium processing facility. This financing is tied to an anticipated commercial contract with Metso Oyj for processing technology and equipment.

Under Finnvera's framework, export credit can generally finance up to 85% of eligible Finnish goods and services, plus certain local costs and capitalized interest. The letter represents an initial milestone in Avalon's broader financing strategy, which aims to secure government-supported project debt, combine it with Canadian and U.S. government programs, and minimize reliance on parent-level common equity.

Next steps include defining the eligible equipment package, completing due diligence, evaluating arranging banks, and negotiating definitive documentation, credit terms, and security structures. Final financing remains subject to credit approval, board approvals, and satisfactory due diligence.

Avalon Advanced Materials Inc. (AVL) announced a EUR 100 million figure that is highly material relative to its current ~$37 million market capitalization, representing a significant de-risking step for the ~$1.2 billion capital cost Lake Superior Lithium (LSLi) project. However, the instrument is explicitly non-binding and represents only an initial milestone. Export credit agencies require rigorous technical, commercial, and environmental due diligence before issuing binding term sheets.

The announcement aligns with management's previously stated strategy to pursue project-level debt and strategic partnerships rather than dilutive equity raises. The stock price surged from ~$0.05 to $8.02 on July 14, 2026. Historical data and prior news indicate a ~180:1 share consolidation was proposed in June 2026 to support a potential U.S. exchange listing.

While positive, the market has already priced in the potential. The material impact will only be confirmed upon the execution of binding financing agreements and the finalization of the Metso commercial contract.

Avalon Advanced Materials Inc. is a Canadian critical minerals developer focused on building a North American lithium and rare earth supply chain. Its flagship project is the Lake Superior Lithium (LSLi) processing facility in Thunder Bay, Ontario, which aims to produce approximately 30,000 tonnes per annum of battery-grade lithium hydroxide and carbonate using Metso's lower-carbon alkaline leach technology. A September 2024 preliminary economic assessment (PEA) highlighted a $4.1 billion after-tax net present value (NPV) and a 48% after-tax internal rate of return (IRR) over a 30-year life. A detailed feasibility study is currently underway with Nordmin Engineering, targeting completion in the first half of 2027.

The company also holds other assets, including the Nechalacho Rare Earths and Zirconium Project in the Northwest Territories, which is currently undergoing a PEA to update its 2013 definitive feasibility study (DFS). Additional holdings include the 100%-owned Lilypad Cesium Project in Ontario, following a joint venture restructuring, as well as the East Kemptville Tin project in Nova Scotia and the Warren Township Anorthosite project in Ontario. Avalon is positioning itself as a midstream lithium processor and rare earth developer, leveraging existing industrial infrastructure in Thunder Bay and securing regulatory permits for Nechalacho.