Avalon Advanced Materials Inc. has submitted a Full Project Proposal seeking approximately C$20 million in funding from Natural Resources Canada to advance the Basal Zone at the Nechalacho Rare Earth Elements Project toward a construction-ready engineering basis.

The proposed program at the 100%-owned Northwest Territories deposit targets a Canadian processing pathway for separated rare earth oxides. Funding from the federal Critical Minerals Research, Development and Demonstration and Global Partnerships Initiative program would support three principal workstreams across the asset.

Those workstreams comprise feasibility-level engineering, including an AACE Class 3 capital cost estimate by Wood Canada Limited; validation and optimization of Engina Corporation's Hybrid Supercritical Refining process using existing Nechalacho concentrate; and the design, construction and operation of a modular demonstration plant. The unit is designed to be tested at a Canadian rare earth processing facility before being relocated to Nechalacho for on-site deployment.

“This proposal is focused on advancing Nechalacho toward a financeable development plan,” said Scott Monteith, President and Chief Executive Officer of Avalon. “By integrating feasibility engineering with process validation and demonstration, we believe the program can accelerate project de-risking and establish a stronger foundation for commercial development.”

Avalon is pursuing a diversified capital strategy for the asset that encompasses government programs, non-dilutive funding, strategic partnerships, potential offtake support and project-level financing opportunities. The submission follows an Expression of Interest submitted in March 2026, though the invitation to submit the full proposal does not constitute a final funding commitment by Natural Resources Canada.

The company commissioned a new preliminary economic assessment in January 2026 to update and modernize the project's 2013 definitive feasibility study. In the surrounding district, Vital Metals Limited reported diamond drill results extending rare earth element and niobium mineralisation beyond the Tardiff Mineral Resource envelope.

Read the full announcement: Avalon Advanced Materials Invited to Submit Full Project Proposal Under Natural Resources Canada's Critical Minerals Research, Development and Demonstration and Global Partnerships Initiative Program