Avalon Advanced Materials Invited to Submit Full Project Proposal Under Natural Resources Canada's Critical Minerals Research, Development and Demonstration and Global Partnerships Initiative Program

Avalon Advanced Materials Inc. (AVL) has been invited to submit a Full Project Proposal under Natural Resources Canada's Critical Minerals Research, Development and Demonstration and Global Partnerships Initiative (CMRDD-GPI) program. The company is seeking approximately C$20 million in non-dilutive government funding for the proposal, which targets the 100%-owned Nechalacho Rare Earth Elements Project in the Northwest Territories.

The invitation follows an Expression of Interest submitted in March 2026. It is not a funding commitment or guarantee. The proposal outlines three principal workstreams:

• Feasibility-level engineering to develop an AACE Class 3 capital cost estimate.
• Process validation of Engina Corporation's Hybrid Supercritical Refining (HSR) process using existing concentrate.
• Design, construction, and operation of a modular demonstration plant to produce separated rare earth oxides.

Avalon Advanced Materials Inc. (AVL) announced an invitation to submit a proposal for non-dilutive government funding, an expected incremental step in the company’s previously disclosed strategy to secure financial support and advance project de-risking. The announcement aligns with the May 2026 progress update and the January 2026 commissioning of the Nechalacho Pre-Feasibility Study (PEA). Management has consistently emphasized matching capital sources to development stages to minimize shareholder dilution.

As this is an invitation to submit a proposal rather than a funding award, it does not immediately alter the company's cash position or financial outlook. The market likely already priced in the pursuit of government grants given prior announcements. No material price impact is anticipated unless the proposal is successfully awarded and the funding is disbursed.

Avalon Advanced Materials Inc. (AVL) is a pre-revenue critical minerals developer focused on building a North American supply chain for rare earth elements and lithium. The company operates through dedicated subsidiaries, including Magmic Rare Earths and Lake Superior Lithium Inc., and maintains a regional presence in Yellowknife to support Indigenous and government engagement.

Its flagship Nechalacho Rare Earths & Zirconium Project in the Northwest Territories is 100% owned and hosts one of North America's largest and richest deposits of magnet-critical rare earth elements. An updated Mineral Resource Estimate from August 2026 defines 58.6Mt of Measured and Indicated resources and 130.6Mt of Inferred resources. A preliminary economic assessment is currently underway to modernize the 2013 definitive feasibility study.

In Thunder Bay, Ontario, the company owns the Lake Superior Lithium (LSLi) Refinery, a mid-stream lithium hydroxide processing facility utilizing Metso's alkaline leach technology. A preliminary economic assessment completed in September 2024 projected a $4.1 billion after-tax net present value and a 48% internal rate of return. A feasibility study for the project commenced in January 2026.

Additionally, Avalon secured 100% ownership of the Lilypad Cesium Project in Ontario following a joint venture reorganization in April 2026.