Canadian junior mining company Avalon Advanced Materials Inc. hosted federal Industry Minister François-Philippe Champagne at a proposed lithium processing site in Northern Ontario on Thursday, and it hopes to get funding from Ottawa, even as the company’s financial future hangs in the balance.
Toronto-based Avalon says it intends to build Ontario’s “first domestic supply chain” that will link lithium deposits in the north to the expanding electric battery manufacturing base in the south. But given the company’s financials, it’s not clear how it can raise the money to build its planned lithium refinery in Thunder Bay.
The capital cost estimate for the project is US$850-million. The company is currently holding only $741,381 in cash and recently disclosed that raising even small amounts of money won’t be easy.
“Given the continuation of weak investor interest and capital market conditions in the junior resource sector amongst other factors, there exists an uncertainty as to the company’s ability to raise additional funds on favourable terms,” the company wrote in a regulatory disclosure in July.
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