Mr. Alan Ferry reports

AVALON SHAREHOLDERS APPROVE SHARE CONSOLIDATION; BOARD AUTHORIZES IMPLEMENTATION

Avalon Advanced Materials Inc. shareholders have approved the consolidation of the company's issued and outstanding common shares, and the board of directors has subsequently authorized its implementation on the basis of one postconsolidation common share for every 180 preconsolidation common shares.

At the company's special meeting of shareholders held on June 29, 2026, the share consolidation was approved by 80.107 per cent of the votes cast.

Voting result       Common shares   Percentage

For                   249,614,857       80.107%   
Against                61,987,164       19.893%   
Total votes cast      311,602,021      100.000%  

A total of 311,602,021 common shares, representing approximately 37.209 per cent of the company's issued and outstanding common shares, were represented in person or by proxy at the meeting.

"We appreciate the strong support shareholders have provided for this important step in Avalon's capital markets strategy," said Alan Ferry, chair of the board of directors. "After considering the company's current trading price, prevailing market conditions and potential future U.S. exchange listing requirements, the board determined that a one-for-180 ratio appropriately positions Avalon for the next stage of its development."

The company currently has 835,628,796 common shares issued and outstanding, subject to the treatment of fractional shares. Upon completion of the share consolidation, approximately 4.64 million common shares are expected to be issued and outstanding.

The share consolidation will not, by itself, alter the proportionate value of a shareholder's investment, except for minor differences resulting from the treatment of fractional shares. The exercise prices and numbers of common shares issuable under the company's outstanding options, warrants and other equity-based securities will be proportionately adjusted in accordance with their terms.

The share consolidation is subject to final approval by the Toronto Stock Exchange and completion of the customary processing requirements. The company expects to complete the share consolidation as soon as practicable following receipt and satisfaction of all such approvals and requirements.

"The share consolidation does not change Avalon's underlying value, assets or strategic priorities," said Scott Monteith, president and chief executive officer. "It is an enabling step intended to create a share structure and trading price more consistent with major U.S. exchanges and comparable critical minerals companies. Sustainable value creation will continue to depend on our execution-advancing Nechalacho and Lake Superior lithium, developing strategic partnerships and securing the capital required to move these projects forward."

The share consolidation is intended to support Avalon's broader capital market strategy, including its evaluation of a potential future listing on the Nasdaq Stock Market or another major U.S. securities exchange, and may broaden the universe of institutional and other investors able or willing to invest in Avalon and improve the company's comparability with U.S. exchange-listed peers.

Completion of the share consolidation does not constitute approval of, or a commitment to pursue, a U.S. exchange listing, financing or other capital market transaction. Any potential U.S. listing would remain subject to the company satisfying all applicable listing standards, regulatory review, board approval, market conditions and other customary requirements. There can be no assurance that a U.S. listing will be pursued or completed.

Shareholder information

Shareholders who hold their common shares through a brokerage account or other intermediary generally will not be required to take any action, as their accounts are expected to be adjusted automatically.

Registered shareholders holding physical share certificates will receive instructions from TSX Trust Company, Avalon's transfer agent, regarding the exchange of their preconsolidation certificates. Shareholders should not submit certificates until they have received and reviewed those instructions.

No fractional common shares will be issued in connection with the share consolidation. Any fractional entitlement will be treated in accordance with the terms described in the company's management information circular dated May 29, 2026, which is available on the company's SEDAR+ profile and may be obtained without charge, upon request, to the corporate secretary of the company at Suite 2060, 130 Adelaide St. West, Toronto, Ont., Canada, M5H 3P5, or by telephone at 416-364-4938.

About Avalon Advanced Materials Inc.

Avalon is a Canadian critical mineral company focused on advancing lithium and rare earth elements -- two of the fastest-growing segments of the global energy transition. The company is developing strategic assets to participate in high-growth markets and support the buildout of secure North American supply chains. Avalon is advancing the Nechalacho rare earth elements and zirconium project in the Northwest Territories, which 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, advanced technologies and energy sectors. The company is also 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 is expected to serve as a cornerstone of North America's integrated battery material supply chain, transforming Northern Ontario lithium into essential inputs for transportation, grid storage and advanced manufacturing.

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