Avalon Advanced Materials has secured $15 million to fund an economic study needed to support a proposed Thunder Bay lithium processing plant.
The Toronto lithium company announced it’s entered into a funding agreement with Lind Global Fund, a New York-based institutional fund manager.
Avalon acquired the former Smurfit Stone mill property, of some 380 acres, in the city’s north end to place a lithium hydroxide conversion plant.
Lithium hydroxide is a processed battery-grade material used in manufacturing lithium-ion batteries for electric vehicles (EV).
Lind has been investing in Avalon since 2017.
In a statement, Lind managing director Phillip Valliere was pleased to maintain the relationship by supporting the Thunder Bay facility.
“We are optimistic of their Thunder Bay strategy and believe that Avalon has a unique opportunity to become a significant player in the lithium supply chain for EV battery manufacturers in Ontario.”
Avalon said in a news release that the initial proceeds will be used to accelerate a work program for the processing facility. Specifically, the funds are earmarked for a preliminary economic assessment and for working capital requirements.
The first funding drawdown of $2,750,000 is expected to close within the next two weeks. The financing comes in the form of a convertible security.
A convertible security is an investment that can be changed to another form, such as bonds and preferred shares, which can be converted into common stock. Lind will be entitled to convert its investment into Avalon common shares.
Avalon’s targeted customers are the electric vehicle battery manufacturers.
Avalon has a plant technology partner in Metso of Finland. They are considered a world leader in clean and sustainable mineral processing technology.
A final decision has not been made to construct the facility. The estimated cost is $1.1 billion.
The plant’s feed would come from Avalon’s yet-to-be developed Separation Rapids lithium deposit, north of Kenora. There, Avalon has teamed up with SCR-Sibelco NV of Belgium, as a joint venture mining partner.
The combined number of jobs for an integrated open pit and a processing operation is being touted at 500. Avalon said last December it is aiming for a 2028 refinery startup.
