Avalon enters into $15M agreement to accelerate Lithium Processing Facility near Thunder Bay
Avalon Advanced Materials Inc. has entered into a $15,000,000 convertible security funding agreement with Lind Global Fund II, LP, an entity managed by The Lind Partners, a New York-based institutional fund manager.
The first drawdown on the Funding Agreement will be for $2,750,000, and is expected to close within the next two weeks. Subject to further agreement by the parties, additional drawdowns under the Funding Agreement can be made on satisfaction of certain conditions.
The proceeds from the first drawdown will be used to accelerate the work program for the Company's planned lithium processing facility located in Thunder Bay, Ontario, including the initiation of a preliminary economic assessment, and cover near term working capital requirements.
Phillip Valliere, Managing Director at the Lind Partners said, "We are very pleased to continue our long-term relationship with Avalon, dating back to our first investment together in 2017, by making this new investment to support Avalon's processing facility in Thunder Bay. 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."
The convertible security to be issued pursuant to the first drawdown under the Funding Agreement will have a two-year term and will accrue a simple interest rate obligation of 10% per annum on the funded amount, which is prepaid and attributed to the face value of the convertible security upon issuance, resulting in a face value of $3,300,000 (the "Face Value"). Lind will be entitled to convert the Face Value amount over a 24 month period, subject to certain limits, at a conversion price equal to 85% of the five-day trailing volume weighted average price of Avalon's common shares prior to the date of conversion. The convertible security matures 24 months after closing. Commencing 30 days after the expiry of the 4-month statutory hold applicable to the convertible security, Avalon has the right to repurchase the convertible security, subject to Lind's option to convert up to one third of the Face Value into Avalon common shares prior to such repurchase.
In conjunction with the closing of the first drawdown under the Funding Agreement, Lind will receive a closing fee of $96,250, and 15,800,000 common share purchase warrants. Each warrant will entitle Lind to purchase one common share of the Company at a price of $0.13 per common share until 60 months after closing.
Pursuant to Canadian securities laws, the securities issuable under the first drawdown will be subject to a hold period which expires four months and one day after closing. The Company has received conditional approval of the TSX in connection with the first drawdown.
This news release is not an offer of securities for sale in the United States. The securities have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act"), and may not be offered or sold in the United States or to US persons (as defined in Regulation S under the US Securities Act) absent registration or an applicable exemption from registration. All currency reported in this release is in Canadian dollars.
About The Lind Partners
The Lind Partners manages institutional funds that are leaders in providing growth capital to small- and mid-cap companies publicly traded in the US, Canada, Australia and the UK. Lind's multi-strategy funds make direct investments ranging from US$1 to US$30 million, invest in syndicated equity placements and selectively buy on market. Having completed more than 200 direct investments totaling over US$2 billion in transaction value, Lind's funds have been flexible and supportive capital partners to investee companies since 2011.
About Avalon Advanced Materials Inc.
Avalon Advanced Materials Inc. is a Canadian advanced manufacturing company focused on vertically integrating the Ontario lithium supply chain. The Company, through its joint venture with SCR-Sibelco NV, is currently developing its Separation Rapids lithium deposit near Kenora, ON, while also continuing to advance the Snowbank lithium and Lilypad lithium-caesium projects. Avalon is also working to develop its Nechalacho rare earths and zirconium project located in the Northwest Territories. This deposit contains critical minerals for use in advanced technologies in the communications and defense industries among other sectors.
In addition to these upstream activities, Avalon is executing on a key initiative to develop Ontario's first midstream lithium hydroxide processing facility in Thunder Bay, ON, a vital link bridging the lithium resources of the north with the downstream EV battery manufacturing base in the south.
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