Avalon Advanced Materials has recently inked a $15 million funding deal with Lind Global Fund II, managed by The Lind Partners, a reputable New York-based institutional fund manager. The agreement marks a significant step forward for the Canadian lithium developer.
The initial drawdown of $2.75 million is anticipated to close within the next fortnight, with Avalon earmarking this initial fund to expedite work on its planned lithium processing facility situated in Thunder Bay, Ontario.
Back in July 2023, Avalon unveiled a strategic partnership with Finnish mining tech group Metso to construct the province’s inaugural battery-grade lithium facility. Through this collaboration, Avalon aims to license Metso’s technologies to manufacture lithium hydroxide cathode materials, catering to the global electric vehicle (EV) market.
Preceding this announcement, Avalon concluded the acquisition of a 383-acre industrial property, strategically positioned with access to a deep-water port, rail, road, and other vital infrastructure crucial for housing the lithium processing facility.
Phillip Valliere, Managing Director at Lind Partners, expressed satisfaction in extending their longstanding relationship with Avalon, dating back to their initial investment in 2017. He expressed optimism in Avalon’s Thunder Bay strategy, seeing it as a unique opportunity to establish a significant foothold in Ontario’s lithium supply chain for EV battery manufacturers.
The entirety of the $15 million financing takes the form of a convertible security, with the first drawdown carrying a two-year term and accruing a simple interest rate obligation of 10% per annum. This interest is prepaid and attributed to the face value upon issuance, resulting in a face value of $3.3 million.
Lind retains the option to convert the face value amount over a 24-month period at a conversion price equivalent to 85% of the five-day trailing volume weighted average price of Avalon’s common shares before the conversion date.
Following the financing announcement, shares of Avalon Advanced Materials surged by 5.9% by 10:30 a.m. ET, trading at $0.09 each, positioned at the lower end of its 52-week range of $0.08-$0.18, with a market capitalization of $48 million.
