14 June 2016

LITHIUM PORTFOLIO UPDATE AND PRESENTATION RELEASE

Highlights

• Avalon has consolidated its lithium portfolio in Scandinavia to include an additional new Exploration Reservation application in Finland over a documented lithium pegmatite, and secured interests in lithium pegmatites in Sweden.

• In Finland: data compilation over the highly prospective Tammela claims (subject to a joint venture with Canadian company Nortec Minerals Corp.), is in progress and drilling aimed at defining a maiden resource is expected to commence in Q3, 2016.

• The Tammela drilling program will focus on defining the geometry and scale of Kietyönmäki lithium pegmatite which includes 24m at 1.3% Li2O in historical Diamond drilling by the Finnish Geological Survey. Peak assays include 3m at 4.35% Li2O.

• In Sweden: Avalon has entered into a joint venture with private Australian

  interests over known lithium properties in the Vasternorrlands Province. The Australian interests include a private company held by well-known and highly respected geologist and analyst David Ransom.

• A Corporate Presentation on the lithium portfolio has been released separately on ASX and Avalon's website.

• Avalon's move into the lithium sector builds on its Scandinavian expertise and network, and is a complementary business to its flagship Viscaria Copper Project.

• Avalon continues to advance its 100% owned Viscaria Copper Project in Sweden and is proceeding with permitting for a 2-3Mtpa operation producing >20,000t per annum of copper in concentrate.

Avalon Minerals Ltd (ASX: AVI) ('Avalon') is pleased to provide an update on its recently compiled lithium portfolio.

Finland:

In the Somero district in southern Finland, Avalon has lodged three Exploration Reservation applications, and has entered into an earn-in joint venture with Canadian company Nortec Minerals Corp. over the Kietyönmäki lithium deposit and surrounding areas.

The Kietyönmäki lithium pegmatite deposit was drilled during the period 1987 and 1988 by the Finnish Geological Survey (GTK). Seventeen shallow Diamond drill holes were completed to test down to 70m below surface across two traverses, and one traverse of very shallow holes to identify bedrock. Assay results are tabulated below:

14 June 2016

Nortec resampled selected intervals of drill hole R310, with grab samples of half drill core and confirmed these assay levels (see (http://www.nortecminerals.com/tammela.php)

The Kietyönmäki lithium deposit is held under approved claims and field work can commence immediately.

Avalonhas included an Exploration Target of 8-15Mt at 1.4 - 1.8% Li2O.The potential quantity and grade is conceptual in nature. There has to date been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. The Corporate Presentation provides further background on this target.

For comparison, Appendix 3 of the presentation released today shows Avalon's exploration target by comparison with other lithium deposits.

14 June 2016

Applications for exploration reservations in the Tammela, Kaustinen and Seinäjoki areas are still being processed by the Finnish safety and Chemicals Agency (Tukes), and some of the areas under application have competing applications, but these do not compromise Avalon's exploration and proposed resource definition drilling program at the Kietyönmäki deposit.

In the Kaustinen district in central Finland, Avalon has also lodged applications for 2 Exploration Permits.

Sweden:

Avalon has entered into an agreement (terms outlined below) to acquire two approved exploration concessions and an application for an exploration concession in Vasternorrlands, referred to as the Ladum Project.

The properties are held through Australian interests which include a private company held by well-known and highly respected geologist and analyst David Ransom.

The Ladum Project covers areas within a regional pegmatite district that has seen minor historical exploration primarily for tin. Most of this exploration was undertaken by LKAB in the 1980's. The exploration included geophysics, till- sampling, and general geological mapping and investigations. This work resulted in a number of tin, niobium, tantalum and lithium bearing pegmatites being defined. After this initial program LKAB ceased all exploration and focussed its business on iron ore developments in northern Sweden near Kiruna.

The main prospect secured under approved Exploration Concession consists of NE-trending lithium-bearing pegmatite dykes.

The main prospect area is within forested terrain with easy access through logging roads. Main roads, power lines and local towns such as Solleftea are all nearby. Ports are located approximately 75km to the south-east. The climate in the area is relatively mild due to proximity to the Baltic Sea.

All exploration areas within the Scandinavian portfolio are supported by high quality infrastructure. Good quality open file data exists and compilation and interpretation of this data has commenced. Data from joint venture partners is also undergoing review.

Low sovereign risk in Finland and Sweden, and Avalon's operating base from Kiruna in northern Sweden, together with local partnerships, support this initiative. Securing an advanced, drill ready lithium deposit at Kietyönmäki, and documented lithium-bearing pegmatites in all other areas held and under application, allows for rapid advancement towards definition of a maiden resource.

14 June 2016

Figure 1: Regional locations of lithium projects within the Avalon portfolio.