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 selected to advance to the next round of proposals 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 to advance its 100%-owned Nechalacho Rare Earth Elements Project toward a construction-ready engineering basis.

Avalon was invited on June 30, 2026, to submit a Full Project Proposal following an Expression of Interest in March 2026. This selection is not a funding decision or commitment. The proposal focuses on the Nechalacho Rare Earth Elements Project in the Northwest Territories and outlines three principal workstreams.

The first workstream involves feasibility engineering, specifically the development of an AACE Class 3 capital cost estimate by Wood Canada Limited. The second workstream focuses on process validation, which includes the optimization of Engina Corporation's Hybrid Supercritical Refining (HSR) process using existing Nechalacho concentrate. The HSR process combines caustic pretreatment with supercritical CO2 extraction to simplify processing, reduce water and reagent intensity, and improve recovery. The third workstream entails the design, construction, and operation of a modular demonstration plant. This containerized plant is capable of processing approximately one tonne of concentrate per day and will be tested at a Canadian facility before being relocated to Nechalacho for on-site demonstration. The project requires no new mining, drilling, or sampling, as it utilizes existing material.

The proposed work aims to produce separated rare earth oxides, including magnet-critical neodymium-praseodymium (NdPr), dysprosium, terbium, samarium, yttrium, and a zircon co-product. The project aims to establish a domestic Canadian pathway for producing rare earth oxides, supporting North American supply chains for electric vehicles, renewable energy, and defense applications.

"This proposal is focused on advancing Nechalacho toward a financeable development plan," said Scott Monteith, President and Chief Executive Officer of Avalon. "By integrating feasibility engineering with process validation and demonstration, we believe the program can accelerate project de-risking and establish a stronger foundation for commercial development."

Management emphasizes a diversified capital strategy including government programs, non-dilutive funding, strategic partnerships, and project-level financing to de-risk the project efficiently.

"Securing non-dilutive and strategic capital is an important part of our approach to advancing Nechalacho," said Lorin Crenshaw, Chief Financial Officer of Avalon. "Our objective is to match the appropriate source of capital to each stage of development and use government and strategic funding wherever possible to accelerate project de-risking and use shareholder capital efficiently."