Can you provide an update on Separation Rapids and the evolution of battery materials supply chains?

Avalon’s Separation Rapids lithium project remains our top priority and it is an advanced project. Over the last year, we have seen increased interest in establishing new lithium battery materials supply chains in North America as people began to recognize that secure supply of these critical materials for new technology is at risk if we do not start to build these supply chains. Canada has adequate resources in the ground; it is simply a matter of having the right circumstances to be able to develop them. The hard part is that there have not been any users or processors of these battery materials that are in North America. You need the downstream to get established in order to justify the capital investment necessary to create the upstream part of it. Fortunately, it seems to be coming together now.  

As a result, Avalon is accelerating its work on Separation Rapids and we recently announced that we have signed a letter of intent with another aspiring lithium producer in Northwestern Ontario called Rock Tech Lithium. The plan is to collaborate on establishing a battery materials processing facility in a central location like Thunder Bay that could serve both companies’ needs, along with potentially other emerging new producers of lithium mineral concentrates in Northern Ontario, to turn them into the battery materials.

What are the factors that make the development of critical minerals so challenging?

It is a long and very difficult process because of the challenges of finding customers who will commit to buying the materials before you have started production. When you are dealing with non-exchange traded commodities, you must be able to show that you have commitments to buy the material. That is hard to do until you are already producing something.

Unfortunately, the regulations that govern the mining industry in most parts of Canada frustrate that. This is because you need to be able to start bulk sampling at an early stage to start testing your process flow sheet and producing trial quantities of the product. You must show customers what the product will look like in order to get the offtake commitment, to then justify investing further capital into development. It is a completely different process from traditional commodities, where in the early stage it is just about drilling holes in the ground and trying to find the biggest, richest resource you can.

The regulations treat bulk sampling as the last step to test your new mill before you start a major mining operation, requiring extensive studies for a closure plan before you can get permission to extract even a small bulk sample. That has been one of the big hold-ups. We have been very active in trying to educate government on the need to adapt the regulations to accommodate critical minerals development and they are listening now.

You mention Cesium as a technology material supply chain controlled by China. Can you touch on these dynamics and the pollucite mineralization in your Lilypad project?

Cesium is a very rare and valuable element that is not often found in concentrations to justify its commercial recovery.

Avalon has had its Lilypad project for 20 years. When we first explored the property, it was for tantalum and in drilling a number of these tantalum-rich pegmatite dikes, we actually ended up finding more cesium than we did tantalum. At the time, there was no significant demand for a new cesium supply. But now there is an obvious opportunity to go back and revisit that - which is why Avalon reactivated the project in 2020, starting with the collection of a small (200 kg) bulk sample of the cesium mineralization to begin process testwork.