Avalon Advanced Materials (TSX:AVL) has been selected to proceed to the next round of project proposals under Natural Resources Canada’s Critical Minerals Research, Development and Demonstration and Global Partnerships Initiative program.
On 30 June 2026, the company was invited to submit a full project proposal to the program. As such, Avalon is seeking C$20 million ($20.1 million) of funding to advance the Basal zone at the Nechalacho Rare Earth Elements Project toward a construction-ready engineering basis and demonstrate a Canadian processing pathway for separated rare earth oxides.
The proposed program would support three principal workstreams: feasibility-level engineering; validation and optimisation of Engina’s Hybrid Supercritical Refining process using existing Nechalacho concentrate; and the design, construction, and operation of a modular demonstration plant to be tested at a Canadian rare earth processing facility and subsequently relocated to Nechalacho for an on-site demonstration.
CEO Scott Monteith says this proposal focuses on advancing Nechalacho toward a financeable development plan.
“We believe the program can accelerate project derisking and establish a stronger foundation for commercial development,” Monteith says.
Advancing Canada’s critical minerals strategy
Natural Resources Canada’s Critical Minerals Research, Development and Demonstration and Global Partnerships Initiative program is designed to advance the nation’s critical minerals strategy. The program supports pre-commercial research, development, and demonstration activities that strengthen critical mineral value chains and accelerate the commercialisation of innovative mining and processing technologies.
Avalon’s Nechalacho Project directly aligns with these objectives by advancing an innovative rare earth processing technology from pilot-scale validation towards commercial readiness.
The company is also pursuing a diversified capital strategy as Nechalacho advances, including government programs, non-dilutive funding, strategic partnerships, potential offtake support, and project-level financing opportunities.
Canada currently does not produce separated rare earth oxides. Nechalacho contains one of the highest combined magnet rare earth grades among advanced North American rare earth projects, including neodymium and praseodymium, as well as dysprosium and terbium.
Avalon Advanced Materials is a Canadian critical minerals company focused on advancing lithium– and rare earth-prospective assets.
Write to Aaliyah Rogan at Mining.com.au
Images: Avalon Advanced Materials
