Avalon Advanced Materials (TSX: AVL) announced on Monday it has entered into a C$15 million ($11m) funding agreement with its long-time creditor Lind Global Fund II, which is managed by The Lind Partners, a New York-based institutional fund manager.
The first drawdown will be for C$2.75 million, and is expected to close within the next two weeks, the Canadian lithium developer said, noting that this initial fund will be used to accelerate work at its planned lithium processing facility located in Thunder Bay, Ontario.
In July 2023, Avalon announced it is teaming up with Finnish mining tech group Metso to build what would be the first battery-grade lithium facility in the province. Under the partnership, the company would be able to license Metso’s technologies to produce lithium hydroxide cathode materials for the global EV market.
A month prior to the announcement, Avalon finalized the purchase of a 383-acre industrial property with unique access to a deep-water port, rail, road and other critical infrastructure to house the lithium processing facility.
“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,” Phillip Valliere, managing director at the Lind Partners, said in a statement.
“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 entire financing is in the form of a convertible security. The security in the first drawdown will have a two-year term and accrue a simple interest rate obligation of 10% per annum, which is prepaid and attributed to the face value upon issuance, resulting in a face value of C$3.3 million.
Lind will be entitled to convert the face value amount over a 24-month period 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.
Shares of Avalon Advanced Materials gained 5.9% by 10:30 a.m. ET on the financing announcement, trading at C$0.09 apiece, at the lower end of its 52-week range of C$0.08-C$0.18. The company’s market capitalization sits at C$48 million ($35.4m).
