Avalon Completes PEA: Post-Tax C$4.1 Billion NPV (8%) and 48% IRR at its Thunder Bay Lithium Processing Facility, ON

Newsfile Corp.
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Toronto, Ontario--(Newsfile Corp. - September 3, 2024) - Avalon Advanced Materials Inc. (TSX: AVL) (OTCQB: AVLNF) ("Avalon" or the "Company"), is pleased to announce the completion of a Preliminary Economic Assessment ("PEA") for its Lithium Hydroxide Processing Facility project in Thunder Bay, Ontario, Canada (the Project or the "Lake Superior Lithium Project").

The PEA prepared by DRA Americas Inc. demonstrates the Project's compelling economic viability. The PEA considers a design capacity for the annual production of 30,000 tonnes of battery-grade lithium hydroxide (LiOH). All dollar values in this news release are expressed in Canadian Dollars unless indicated. (USD:CAD = 1.36).

Key Highlights include:

  • After-tax Net Present Value ("NPV") of $4.1 billion at 8% discount rate

  • After-tax Internal Rate of Return ("IRR") of 48% for the 30-year period

  • Initial Capital Cost $1.2 billion and Total Capital Cost $1.3 billion

  • All-in Life-of-Project Operating Costs of $13,029/tonne (includes spod. purchased)

  • Innovative Metso Technology provides an environmentally clean process over conventional lithium hydroxide processes

  • Strategically located in historical industrial land with well-established infrastructure

Avalon's CEO and Director Scott Monteith commented: "We are extremely pleased with the positive outcomes of the PEA and will be advancing the project with a strong focus on environmental sustainability. The strategic location of the Lithium Processing Facility on a brownfield industrial property, positions us exceptionally well for permitting with existing infrastructure such as roads, rail, ports, and utilities, supported by a strong local workforce.

These results reaffirm our view of the project's robustness and substantial economic potential for the company, province and the country. The Project is poised to provide high-quality, battery-grade lithium hydroxide to supply Canada's projected demand from the rapidly growing EV industry."

The study summary outcome is outlined in Table 1 below. The study assumes a spodumene concentrate price of $1,360/tonne (USD$1,000/tonne) for the 30-year life of the project. The spodumene concentrate is expected to be sourced through competitive offtake agreements, purchasing of spodumene feed from neighbouring mines, and potentially being supplied by the Separation Rapids Ltd. Joint Venture.

The long-term pricing of lithium hydroxide is assumed to be $35,360 /tonne (USD$26,000/tonne). A Clean Technology Manufacturing Industrial Tax Credit of 30% was applied against the initial capital cost.

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