Sibelco Acquires Shares of Avalon Advanced Materials Inc.

TORONTO, June 15, 2023 /CNW/ - SCR-Sibelco NV ("Sibelco") announces that it has purchased 109,692,764 common shares ("Avalon Shares") in the capital of Avalon Advanced Materials Inc. ("Avalon") (TSX:AVL, OTCQB: AVLNF) from treasury at a price of approximately C$0.091164 per share for total consideration of C$10,000,000, and a C$3,000,000 principal amount secured convertible debenture (the "Convertible Debenture") of Avalon.

The purchase of the Avalon Shares and the Convertible Debenture was completed pursuant to a subscription agreement between Sibelco and Avalon dated June 14, 2023.

Sibelco and Avalon also agreed to a binding term sheet pursuant to which they will establish a joint venture with respect to certain Avalon lithium mining projects located in northwestern Ontario, with Sibelco as the operator. Avalon will initially contribute its Separation Rapids and Lilypad projects to the joint venture company (the "Joint Venture Company") upon its formation, and Sibelco will provide €5,000,000 (approximately C$7,200,000) of initial funding and has committed to advance a further €30,000,000 (approximately C$43,200,000) in tranches to fund the development of the Joint Venture's mineral projects, including facilities and related infrastructure. The initial participating interests of Sibelco and Avalon in the Joint Venture Company will be 60% and 40%, respectively.

The Convertible Debenture has a maturity date of June 14, 2025 and bears interest at 7.115% per annum. In the event that Avalon has not paid the outstanding principal amount of the Convertible Debenture and all accrued and unpaid interest thereon on or prior to maturity, Sibelco shall have the right to convert the outstanding principal amount and all accrued and unpaid interest thereon into either (i) additional Avalon Shares at a conversion price of approximately C$0.091164 per share, or (ii) certain additional shares of the Joint Venture Company to be acquired from Avalon that would result in a change in the participating interests of Sibelco and Avalon in the Joint Venture Company to 65% and 35%, respectively.

Immediately prior to the transaction, Sibelco held no Avalon Shares or other securities of Avalon. Upon completion of the transaction, Sibelco owns 109,692,764 Avalon Shares (the "Purchased Shares"), representing approximately 19.9% of the issued and outstanding Avalon Shares on a non-diluted basis. If Sibelco were to convert the full C$3,000,000 principal amount of the Convertible Debenture and all accrued interest thereon at maturity, Sibelco would acquire an additional 37,590,496 Avalon Shares. These additional Avalon Shares, together with the Purchased Shares, would represent approximately 25.0% of the issued and outstanding Avalon Shares on a non-diluted basis (after giving effect to the conversion, and otherwise assuming no further issuances of Avalon Shares prior to such time).

Sibelco acquired the Purchased Shares and the Convertible Debenture for investment purposes. Sibelco may from time to time acquire additional Avalon Shares or other securities of Avalon or dispose of some or all of the Avalon Shares or other securities of Avalon that it owns at such time.

About SCR-Sibelco NV

Sibelco is a Belgian-based global leader in material solutions. Sibelco mines, processes and sells specialty industrial minerals – particularly silica, clays, felspathic minerals and olivine – and is a leader in glass recycling. Sibelco's solutions serve a diverse range of industries including semi-conductors, solar photovoltaic, glass, ceramics, construction, coatings, polymers and water purification. The Sibelco Group has production facilities in more than 30 countries and a team of more than 5,000 people worldwide.

Sibelco has its global headquarters at Plantin en Moretuslei 1A, 2018 Antwerpen, Belgium.

For further information, or to obtain a copy of the early warning report filed by Sibelco in accordance with applicable securities laws, please contact either:

SOURCE SCR-Sibelco NV