Avalon Advanced Materials Inc. (TSX:AVL) (OTCQX:AVLNF) (“Avalon” or
the “Company”) announces that as a result of a review by staff of
the Ontario Securities Commission, it is issuing the following news
release clarifying the disclosure in its September 27, 2016, news
release related to its 100% owned Separation Rapids Lithium Project
(the “Project”), Kenora, Ontario. The Company neglected to inform
readers that the comprehensive technical report would be filed on
SEDAR within 45 days of the date of the news release, prior to
November 11, 2016.
The Company clarifies the classification and
tonnes of the feldspar by-product in relation to the lithium
mineral resource estimate (which was originally reported as 8.0 Mt
of Inferred Resources), will be classified in the PEA as 4.03 Mt of
Measured Resources and 3.97 Mt of Indicated Resources, as well as
an additional 1.63 Mt of Inferred Resources. A table of the
resource estimate providing full details and notes is appended
below.
This clarification is partially the result of
additional quantitative mineralogical work completed since the
original estimate was completed. The revised estimate appended
below utilizes the same assumptions and parameters with respect to
commodity prices, mining method and other factors as given in the
news release of September 27, 2016.
Some cautionary language required due to the
inclusion of Inferred resources in the economic model was also
inadvertently omitted. In compliance with paragraph 2.3(3)(a) of
National Instrument 43-101 the Company states that the preliminary
economic assessment described therein is preliminary in nature,
that it includes inferred mineral resources that are considered too
speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral
reserves, and there is no certainty that the preliminary economic
assessment will be realized.
Finally, Paragraph 2.3(1)(b) of NI 43-101
restricts disclosure of an economic analysis on an extrapolation of
results beyond the defined mineral resource estimate and the
following is therefore retracted: “If additional drilling on
untested extensions of the Deposit were to increase the resource
and extend the initial 10 year lithium production period, each
additional year of additional lithium production could add $200
million in revenues per year and significantly increase the NPV of
the Project.”
About Avalon Advanced Materials Inc. Avalon
Advanced Materials Inc. (formerly Avalon Rare Metals Inc.) is
a Canadian mineral development company specializing in niche market
metals and minerals with growing demand in new technology. The
Company has three advanced stage projects, all 100%-owned,
providing investors with exposure to lithium, tin and indium, as
well as rare earth elements, tantalum, niobium, and zirconium.
Avalon is currently focusing on its Separation Rapids Lithium
Project, Kenora, ON and its East Kemptville Tin-Indium Project,
Yarmouth, NS. Social responsibility and environmental stewardship
are corporate cornerstones.
For questions and feedback, please e-mail the
Company at ir@AvalonAM.com, or phone Don Bubar, President & CEO
at 416-364-4938.
This news release contains “forward-looking
statements” within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities legislation. Forward-looking statements include, but are
not limited to, the results of the PEA, including the proposed
development model and potential economics, the key measures and
economics reported in the PEA, timelines, capital and sustaining
costs, power and storage facilities, life of mine, social,
community and environmental impacts, mineral resource and, mineral
reserve estimates, lithium and feldspar markets and sales prices,
off-take agreements and purchasers for the Company’s products,
environmental assessment and permitting, securing sufficient
financing on acceptable terms, opportunities for short and long
term optimization of the Project, and continued positive
discussions and relationships with local communities and
stakeholders. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as
“potential”, “scheduled”, “anticipates”, “continues”, “expects” or
“does not expect”, “is expected”, “scheduled”, “targeted”,
“planned”, or “believes”, or variations of such words and phrases
or state that certain actions, events or results “may”, “could”,
“would”, “might” or “will be” or “will not be” taken, reached or
result, “will occur” or “be achieved”. Forward-looking statements
are subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity,
performance or achievements of Avalon to be materially different
from those expressed or implied by such forward-looking statements.
Forward-looking statements are based on assumptions management
believes to be reasonable at the time such statements are made.
Although Avalon has attempted to identify important factors that
could cause actual results to differ materially from those
contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended.
Factors that may cause actual results to differ materially from
expected results described in forward-looking statements include,
but are not limited to market conditions, Avalon’s ability to
secure sufficient financing to advance and complete the Project,
uncertainties associated with securing the necessary approvals and
permits in a timely manner, assumptions used in the PEA proving to
be inaccurate, uncertainties associated with Avalon’s resource and
reserve estimates, uncertainties regarding global supply and demand
for lithium and feldspar and market and sales prices, uncertainties
associated with securing off-take agreements and customer
contracts, uncertainties with respect to social, community and
environmental impacts, uncertainties with respect to optimization
opportunities for the Project as well as those risk factors set out
in the Company’s current Annual Information Form, Management’s
Discussion and Analysis and other disclosure documents available
under the Company’s profile at www.SEDAR.com. There can be no
assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Such forward-looking statements
have been provided for the purpose of assisting investors in
understanding the Company’s plans and objectives and may not be
appropriate for other purposes. Accordingly, readers should not
place undue reliance on forward-looking statements. Avalon does not
undertake to update any forward-looking statements that are
contained herein, except in accordance with applicable securities
laws.
Cautionary Note to United States Investors Concerning
Reserve and Resource Estimates
The reserve and resource estimates in this news
release have been prepared in accordance with the requirements of
Canadian securities laws, which differ from the requirements of
United States securities laws. Unless otherwise indicated, all
reserve and resource estimates included in this news release have
been prepared in accordance with NI 43-101. NI 43-101 is a rule
developed by the Canadian Securities Administrators which
establishes standards for all public disclosure an issuer makes of
scientific and technical information concerning mineral
projects.
Canadian standards, including NI 43-101, differ
significantly from the requirements of the United States Securities
and Exchange Commission (the “SEC”), and reserve and resource
information contained in this news release may not be comparable to
similar information disclosed by United States companies. In
particular, and without limiting the generality of the foregoing,
the term “resource” does not equate to the term “reserve”. Under
United States standards, mineralization may not be classified as a
“reserve” unless the determination has been made that the
mineralization could be economically and legally produced or
extracted at the time the reserve determination is made. The SEC’s
disclosure standards normally do not permit the inclusion of
information concerning “measured mineral resources”, “indicated
mineral resources” or “inferred mineral resources” or other
descriptions of the amount of mineralization in mineral deposits
that do not constitute “reserves” by United States standards in
documents filed with the SEC. United States investors should also
understand that “inferred mineral resources” have a great amount of
uncertainty as to their existence and as to their economic and
legal feasibility. It cannot be assumed that all or any part of an
“inferred mineral resource” exists, is economically or legally
mineable, or will ever be upgraded to a higher category. Under
Canadian rules, estimated “inferred mineral resources” may not form
the basis of feasibility or pre-feasibility studies except in rare
cases. Disclosure of the amount of minerals contained in a resource
estimate is permitted disclosure under Canadian regulations;
however, the SEC normally only permits issuers to report
mineralization that does not constitute “reserves” by SEC standards
as in-place tonnage and grade without reference to unit measures.
The requirements of NI 43-101 for identification of “reserves” are
also not the same as those of the SEC, and reserves reported by
Avalon in compliance with NI 43-101 may not qualify as “reserves”
under SEC standards. Accordingly, information concerning mineral
deposits set forth herein may not be comparable with information
made public by companies that report in accordance with United
States standards.
Appendix
I |
Separation
Rapids, Mineral Resource Estimate at 0.6% Li2O Cut-off
Grade |
As at October 21,
2016 |
|
|
|
|
|
|
|
|
Class |
Tonnes |
Li2O |
Total Feldspar |
Ta2O5 |
Cs2O |
Rb2O |
SG |
(Mt) |
(%) |
(%) |
(%) |
(%) |
(%) |
Measured |
4.03 |
1.32 |
39 |
0.006 |
0.017 |
0.343 |
2.66 |
Indicated |
3.97 |
1.26 |
39 |
0.007 |
0.025 |
0.362 |
2.67 |
Measured plus Indicated |
8.00 |
1.29 |
39 |
0.006 |
0.021 |
0.352 |
2.66 |
Inferred |
1.63 |
1.42 |
39 |
0.008 |
0.016 |
0.360 |
2.64 |
|
|
|
|
|
|
|
|
Notes:
- CIM Definition Standards for Mineral Resources and Mineral
Reserves, 10 May, 2014 were followed for this mineral resource
estimate.
- The Qualified Person for this mineral resource is David
Trueman, Ph.D., P.Geo. (MB).
- The resource estimate is constrained by a 3D geologic model of
the mineralized material.
- Assay intervals for Li2O, Ta2O5, Cs2O and Rb2O were
interpolated using the Inverse Distance Weighted method to create a
3D block model.
- The resource cut-off grade of 0.6% Li2O was chosen to capture
mineralization that is potentially amenable to mining, mineral
concentration and off-site processing.
- Li, Ta, Cs and Rb were originally analysed on all samples at
XRAL Laboratory (Thunder Bay, Ontario) utilizing ICP (Li, Ta) and
AA (RB and Cs) and check analyses completed at CHEMEX Laboratory
(Don Mills, Ontario) utilizing AA (Li) and ICP (Rb).
- As well as due diligence to verify historic data, Avalon
completed additional check analyses of historic drill core in 2016
utilizing ALS Laboratory (Vancouver) with a combination of fusion
and ICP (method CCP-PKG01). Included as QAQC procedures was a
lithium rock standard within the check analysis batches.
- Total Feldspar is the total of potassium feldspar (microcline)
and sodium feldspar (albite) and the value reflects the mean and
median value of all samples with quantitative mineralogy
determined.
- The percentage Total Feldspar is based on analyses completed
utilizing X-Ray Diffraction and Qemscan instrumentation on samples
representing all lithological subunits of the mineral deposit.
These analyses were completed at Carleton University in 1999 (XRD)
and ALS Global Laboratory in 2016 (XRD and Qemscan, Kamloops). This
is supported by quantitative mineralogy of metallurgical samples
determined at SGS (Lakefield) and Anzaplan (Germany).
- All figures are rounded to reflect the relative accuracy of the
estimates. Summation of individual columns may not add-up due to
rounding.
- Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability. There is no certainty that all or
any part of the Mineral Resource will be converted into Mineral
Reserves.
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