19 May 2016

AVALON BUILDS LITHIUM PORTFOLIO IN FINLAND

Highlights

• Avalon Minerals has secured interests in a portfolio of lithium projects in Finland.

• Avalon has lodged and had registered an Exploration Reservation application covering approximately 500km2 in the Kaustinen district, host to some of Europe's largest lithium deposits. The areas under application include areas in close proximity to lithium deposits at the drilled, resource definition and PFS stages held by Finnish company Keliber Oy.

• Avalon has also finalised a joint venture with Canadian company Nortec Minerals Corp. over the Kietyönmäki lithium occurrence in southern Finland, and secured additional ground in the area. Lithium mineralisation at Kietyönmäki is hosted in a spodumene-bearing pegmatite dyke swarm. Assays from drill holes drilled by the Geological Survey of Finland, and confirmed by Nortec, included 9m at 1% lithium within a broader zone of 24m at 0.61% lithium.

• Avalon's move into the lithium sector builds on its Scandinavian expertise and network, and is a complimentary 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 announce that it has secured interests in several highly prospective lithium exploration opportunities in Finland.

  Avalon has secured interests in the two main areas of known lithium occurrences.

  • In the Somero district in southern Finland, Avalon has lodged 2 Exploration Reservation applications, and has entered into an earn-in joint venture with Canadian company Nortec Minerals Corp. over the Kietyönmäki lithium occurrence and surrounding areas.

  • In the Kaustinen district in central Finland, Avalon has lodged an Exploration Reservation application over areas prospective for lithium bearing pegmatites. The Kaustinen district is host to some of Europe's largest known lithium pegmatite deposits.

All areas are supported by high quality infrastructure and located close to potential final customers. Good quality open file data exists and this is currently being accessed. Avalon's exploration program will involve an initial phase of data compilation and interpretation, with an expectation that drill targets will be defined

19 May 2016

relatively quickly. Low sovereign risk in Finland, and Avalon's operating base from Kiruna in northern Sweden, together with partnerships with Finnish entities, makes this a compelling opportunity.

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

All of Avalon's lithium assets are to be held within the newly established subsidiary Scandian Metals Pty. Ltd. ('Scandian'), to provide flexibility for future growth and funding of the lithium portfolio.

Somero: Avalon has lodged applications for two Exploration Reservations over an area of 117 km2. Avalon has also entered into an earn-in joint venture with Nortec Minerals Corp. covering the adjacent Kietyönmäki lithium occurrence and surrounding areas held under approved claims.

Historical drilling by the GTK (Geological Survey of Finland) was undertaken at Kietyönmäki. Re-logging and re-sampling by Nortec returned results including 9m at 1% lithium within a broader zone of 24m at 0.61% lithium (http://www.nortecminerals.com/tammela.php). The drilling is within the Kietyönmäki Main Dyke, a large spodumene-bearing pegmatite dyke that can be traced for over 400m, has a width of up to 18 metres, and is known to extend vertically for at least 100m. The dyke is part of a swarm. GTK historically drilled only 17 holes on three closely spaced traverses.

19 May 2016

Prospectivity mapping in the Somero district has also been undertaken by GTK, and has identified many areas considered highly prospective for lithium pegmatite occurrences, primarily to the south-east of the Kietyönmäki occurrence. These areas have been covered in the ground acquired by Avalon for the Somero lithium project.

The Somero area is supported by high quality infrastructure (figure 2).

Figure 2: Areas of Exploration Reservation Applications by Avalon, and claims held through the Nortec JV. The Hirvikallio lithium prospect is surrounded by Natura 2000 environmental areas and hence is excluded from the current claim areas.

Kaustinen: Avalon has lodged, and had registered, one Exploration Reservation application covering 527 km2, within the Central Ostrobothnia district, home to several known lithium pegmatites some of which are at an advanced stage of PFS and held by private Finnish company Keliber Oy.

The exploration area is supported by high quality infrastructure (figure 3).

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Figure 3: Area of Exploration Reservation Application by Avalon in the Kaustinen area. The area is host to several lithium occurrences held by Finnish company Keliber Oy shown here in red and pink.