Further to its news release dated June 15, 2023, and consistent with its strategic objective to build Ontario's first vertically integrated lithium supply chain serving the North American EV battery market, Avalon Advanced Materials Inc. (AVL) and (AVLNF) ("Avalon" or the "Company") is pleased to announce that it has entered into a definitive Tripartite Purchase and Sale Agreement (the "Purchase and Sale Agreement") with SCR-Sibelco NV ("Sibelco") and Separation Rapids Ltd. ("SRL"), to provide for the transfer of the Company's Separation Rapids and Lilypad projects to SRL. SRL will be a joint venture entity co-owned by Sibelco (60%) and Avalon (40%). Sibelco will be the operator of SRL.
Closing of the sale remains subject to a number of conditions, including but not limited to, the execution of a definitive Joint Venture Company Shareholders Agreement (the "JV Agreement") between Avalon, Sibelco and SRL.
Pursuant to the terms of the Purchase and Sale Agreement, Avalon agreed to transfer the Separation Rapids and Lilypad properties to SRL, including all personal property, assumed contracts, permits, books and records in consideration for approximately €23.2 million (C$34.1 million), representing a 40% interest in the joint venture entity together with reimbursements of approximately C$903,000 plus HST in funds expended by Avalon on the joint venture properties since the signing of a binding joint venture term sheet in June 2023. Sibelco's original commitment to the joint venture of €35.0 million was reduced by approximately €134,000 in connection with an additional subscription of common shares of Avalon by Sibelco for this same amount in July 2023. As agreed between Avalon and Sibelco, Avalon used the amount raised from the additional subscription to fund expenditures on the joint venture properties.
Closing of the transaction, signing the JV Agreement and the establishment of SRL as the joint venture company is expected to occur on or about November 9, 2023.
"We are very pleased with the dynamic working relationship that exists between Avalon and Sibelco as we continue to advance this exciting joint venture towards completion. This partnership will unlock tremendous value for Avalon shareholders and accelerate our vision to build Ontario's first vertically integrated lithium supply chain", said Scott Monteith – Avalon CEO.
