An anonymous director reports

AVALON ANNOUNCES BROKERED LIFE FINANCING OF UP TO C$21 MILLION TO ADVANCE ITS RARE EARTH AND LITHIUM PROJECTS IN CANADA

Avalon Advanced Materials Inc. has entered into an agreement with Canaccord Genuity Corp., as lead agent and sole bookrunner, on its own behalf and on behalf of a syndicate of agents, in connection with a brokered private placement under the listed issuer financing exemption (LIFE) of: (i) up to 154,545,455 non-flow-through (NFT) units of the company at a price of 11 cents per unit for gross proceeds of up to approximately $17-million; and (ii) up to 30,769,231 flow-through (FT) units of the company at a price of 13 cents per unit for gross proceeds of up to approximately $4-million.

The company has granted the agents an option to sell up to 27,272,727 additional NFT units at the NFT offering price to raise additional gross proceeds of up to approximately $3-million. The agents' option is exercisable in whole or in part, at any time to 48 hours prior to the closing of the offering.

This financing supports Avalon's strategy to advance its rare earth and lithium assets, and plays a meaningful role in strengthening the foundation of a resilient North American critical minerals supply chain.

Terms of the offering

Each NFT unit shall comprise: (i) one common share of the company; and (ii) one common share purchase warrant of the company. Each FT unit will consist of: (i) one common share, each of which will qualify as a flow-through share within the meaning of Subsection 66(15) of the Income Tax Act (Canada); and (ii) one warrant. Each warrant will entitle the holder to acquire one common share at an exercise price of 17 cents per warrant share for a period of 36 months from the closing date (as defined herein).

Subject to compliance with applicable regulatory requirements and in accordance with National Instrument 45-106, Prospectus Exemptions, the units will be offered for sale to purchasers resident in Canada and/or other qualifying jurisdictions pursuant to the listed issuer financing exemption under Part 5A of NI 45-106. As the offering is being completed pursuant to the listed issuer financing exemption, the securities issued pursuant to the offering will not be subject to a hold period pursuant to applicable Canadian securities laws. There is an offering document related to the offering that can be accessed under the company's issuer profile on SEDAR+ and on the company's website. Prospective investors should read the offering document before making an investment decision.

Any securities issued under other exemptions from the prospectus requirements will be subject to a statutory hold period of four months and one day following issuance, as required by applicable securities laws.

Use of proceeds

The net proceeds of the offering are expected to be used to finance:

• The preparation of an updated feasibility study for the Nechalacho rare earth and zirconium project to advance project readiness and support continuing strategic partnership discussions;
• The preparation of a feasibility study related to the company's planned Thunder Bay lithium refinery to advance project readiness and support ongoing strategic partnership discussions;
• The repayment of outstanding convertible notes;
• Eligible Canadian exploration expenses that will qualify as flow-through mining expenditures within the meaning of the Income Tax Act;
• Working capital and general corporate purposes.

In consideration for the services provided to the company in connection with the offering, the agents will be entitled to receive a cash commission equal to 6.0 per cent of the gross proceeds raised under the offering and such number of broker warrants as is equal to 6.0 per cent of the number of units sold under the offering. Each broker warrant will entitle the holder thereof to acquire one common share of the company at a price of 11 cents per broker warrant share for a period of 36 months following the closing date.

The offering is expected to close on or about Oct. 24, 2025, and is subject to certain customary conditions, including receipt of all necessary regulatory approvals, including final acceptance by the Toronto Stock Exchange.

About Avalon Advanced Materials Inc.

Avalon Advanced Materials is a Canadian critical minerals company advancing the supply of materials essential for Canada's future. The company is focused on developing strategic assets that support secure, domestic supply chains and long-term economic growth. Avalon is focused on vertically integrating the Ontario lithium supply chain through the development of Lake Superior Lithium Inc., Ontario's first mid-stream lithium hydroxide processing facility, located in Thunder Bay. This facility will serve as a vital link between Northern Ontario's lithium resources and the growing EV (electric vehicle) battery manufacturing base in Southern Ontario and North America. Through a joint venture with SCR-Sibelco NV, Avalon is advancing the Separation Rapids lithium project near Kenora, Ont., as well as continuing exploration at its Snowbank lithium and Lilypad lithium-cesium deposits. The company is also advancing the Nechalacho rare earth and zirconium project in the Northwest Territories. This deposit contains all light and heavy rare earth elements, as well as yttrium, zirconium, tantalum and niobium -- critical minerals used in advanced technologies across the communications, defence, clean tech and energy sectors.

We seek Safe Harbor.