Corporate Presentation

Donald S. Bubar, President & CEO

April 20, 2015

Safe Harbour Statement

Forward looking information This corporate presentation contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act

of 1995 and applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements related to the

Company's anticipation that it would proceed with certain plans and activities. Generally, these forward-looking statements can be identified by the

use of forward-looking terminology such as "potential", "scheduled", "anticipates", "continues", "expects" or "does not expect", "is expected",

"scheduled", "targeted", "planned", or "believes", or variations of such words and phrases or state that certain actions, events or results "may",

"could", "would", "might" or "will be" or "will not be" taken, reached or result, "will occur" or "be achieved". Forward-looking statements are subject

to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of

Avalon to be materially different from those expressed or implied by such forward-looking statements. Forward-looking statements are based on

assumptions management believes to be reasonable at the time such statements are made. Although Avalon has attempted to identify important

factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that

cause results not to be as anticipated, estimated or intended. Factors that may cause actual results to differ materially from expected results

described in forward-looking statements include, but are not limited to market conditions, and the possibility of cost overruns or unanticipated

costs and expenses as well as those risk factors set out in the Company's current Annual Information Form, Management's Discussion and

Analysis and other disclosure documents available under the Company's profile at www.SEDAR.com. There can be no assurance that such

statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Such

forward-looking statements have been provided for the purpose of assisting investors in understanding the Company's plans and objectives and

may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking statements. Avalon does not

undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws.

The technical information contained in this presentation has been reviewed and approved by Donald Bubar, P.Geo. (Ont), President and CEO of Avalon, qualified persons for the purposes of National Instrument 43-101. For additional information on the Nechalacho Rare Earth Elements Project, see the technical report entitled “Technical Report Disclosing the Results of the Feasibility Study of the Nechalacho Rare Earth Elements Project” dated May 31, 2013 and effective April 17, 2013.

2

CORPORATE OVERVIEW

3

Vision and Mission

Vision

Avalon will be the leading outside-of-China supplier of heavy rare

earths and other rare metal and mineral products to the global

market.

Mission

Avalon will create shareholder value and community prosperity

through the development of scalable, multi-generational businesses

that will deliver quality rare metals products to customers while

remaining committed to the principles of sustainable practices,

effective partnerships, and high performance in all aspects of its

operations and business practices.

4

Corporate Sustainability

Placed 17th in Corporate Knights’ Future 40

Responsible Corporate Leaders in Canada 2015

ranking

Avalon’s third annual report released Dec 2014

● MAC TSM Self Assessment and GRI Level G4,

core level

● Aligns the Company’s operating philosophy with

cleantech customers

2014 Performance

● No recordable injuries

● Published new Sustainability Policy and continued

to develop policies, procedures and mgt. plans in

anticipation of Nechalacho development

5

Rare Metals Projects Avalon is not just about rare earths

All projects 100% owned –

Three at an advanced stage

Avalon offers

diversified

exposure to a

broad range

of critical raw

materials

6

Capital Structure (As at April 10, 2015)

Canada - TSX: AVL

United States – NYSE MKT: AVL Frankfurt- OU5

Shares Outstanding 141,752,858

Fully Diluted 160,233,950

Market Capitalization US$37 million (S/O @ $0.26)

Recent Price Range US$0.28 - $0.23

52 Week High / Low US$0.73 - $0.16

Cash Reserves C$5.0 million

Insider Share Position Approx. 4 million shares

Institutional Investors UBS, Empery, CPP, Global X, Carnegie,

Hancock, DFA, Chilton & others

Analyst Coverage HCW, Edison, Secutor

7

AVL One Year Price Chart ($US)

8

Management and Board of Directors

● Donald S. Bubar, P.Geo.

President, CEO & Director

● Jim Andersen, CA, CPA

V.P. Finance, CFO & Corporate Secretary

● David Marsh, FAusIMM (CP)

Senior V.P. Metallurgy

● Bill Mercer, Ph.D., P.Geo.

V.P. Exploration

● Pierre Neatby, BA Econ

V.P. Sales and Marketing

● Mark Wiseman, B.Sc., MBA

V.P. Sustainability

● Cindy Hu, CA, CPA, CGA

Controller

● Gerry Liepert , P.Eng.

Senior Project Manager

● Melanie Smith , LL.B

Senior Legal Counsel

● Brian St. Louis, BA, Political Studies

Manager, Government Affairs

● Ron Malashewski, P.Eng (AB)

Manager, Investor Relations

● Ian Taylor, CHRL

Manager, Human Resources

9

BOARD OF DIRECTORS

• Brian D. MacEachen, C.A.

Chairman and Audit Committee Chair

• Donald S. Bubar, P.Geo. CEO

• Alan Ferry, CFA

Past Chairman

• Phil Fontaine, B.A., LL.D.

Sustainability Advisory Committee Member

• Peter McCarter, B.A., LL.B., M.B.A.

Governance/Compensation Committee Chair

• Kenneth Thomas, Ph.D., P. Eng.

RARE EARTHS INDUSTRY

10

Rare Metals and Rare Earth Elements

Light REE:

La = Lanthanum

Ce = Cerium

Pr = Praseodymium

Nd = Neodymium

Sm = Samarium

Heavy REE:

Eu = Europium

Gd = Gadolinium

Tb = Terbium

Dy = Dysprosium

Ho = Holmium

Er = Erbium

Tm = Thulium

Yb = Ytterbium

Lu = Lutetium

Y = Yttrium

“Critical Five:” Neodymium, Dysprosium, Terbium, Europium and Yttrium

11

Report on Critical Materials for the EU

Report of the Ad hoc Working Group on defining critical raw materials May 2014

Heavy Rare Earth Elements

12

Rare Earths and Rare Metals are found in many everyday applications

13

Rare Metals in a smart phone

14

China and Rare Earths

● China continues to consolidate the domestic market to

control illegal production of HREE

● China has replaced export quotas with “tightly controlled

export licenses” to comply with WTO ruling

● The impact is expected to be a less transparent market and

more uncertainty for end users outside China

● HREE and Nd/Pr prices will rise in and outside China as

demand for REE magnets continues to grow

● At present, Global demand in 2020 is forecasted at 180-200

ktpa REO, compared with 120 ktpa in 2014

15

NECHALACHO PROJECT

Thor Lake, Northwest Territories, Canada

16

NORTHWEST TERRITORIES

Fort Smith

Fort Resolution Hay River/

K’atl’odeeche

Canadian National

Railway

Yellowknife

Pine Point

Bluefish

Hydro Dam

Taltson

Hydro Dam

Great

Slave

Lake

Behchoko

Nechalacho Project: Thor Lake Area and Regional Infrastructure

]

] Snare

Hydro Dam

]

Lutsel K’e

Proposed

National Park

Thor Lake

(Nechalacho Mine and Concentrator)

ALBERTA

N

0 100 km

Whati

SASKATCHEWAN

Potential

Hydro Line

17

Nechalacho General Geology (Vertical Cross Section Looking West)

Looking west at 416200E

S N

1600 metres

Upper Zone

Basal Zone HREE Deposit

High Grade “Basin”

Lakes and Overburden

Lower Zone

1,600 metres N S

18

Measured and Indicated Resources in the Basal Zone at Various NMR Cut-offs

(August 2013)

Basal Zone Tonnes

(millions)

%

TREO

%

HREO

% HREO/

TREO

%

ZrO2

%

Nb₂O₅ %

Ta₂O₅

US$345 NMR Cut-Off (Reflects entire Basal Zone)

Measured 12.56 1.71 0.38 22.50 3.20 0.405 0.0404

Indicated 49.33 1.62 0.35 21.27 3.07 0.405 0.0398

US$800 NMR Cut-Off (Approximately Reflects High Grade “Basin”)

Measured 5.11 2.20 0.58 26.17 4.23 0.52 0.0544

Indicated 16.15 2.20 0.55 24.87 4.13 0.52 0.0542

US$1,000 NMR Cut-Off (Selected parts of High Grade “Basin”)

Measured 2.49 2.49 0.68 27.38 4.77 0.59 0.0620

Indicated 6.99 2.52 0.66 26.03 4.66 0.58 0.0614

19

See Avalon’s August 15, 2013 News Release “Avalon Reports on Summer Work Program at the Nechalacho Rare Earth

Elements Project and Provides Mineral Resource Update” for further information.

Nechalacho Feasibility Study Development Concept (as of April 2013)

● Planned initial production of

7,000 tpa separated REE oxides

plus EZC (with Nb, Ta, HREE)

● CAPEX: CAD$1.575 billion

(includes refinery and sustaining

capital)

● Operating Costs: CAD$265

million/ year or $362/mined

tonne of ore (all inclusive)

● Revenues: CAD$646 million /yr

or $885/ mined tonne of ore

● Pre-tax IRR: 22.5%

● NPV @ 10%: $1.35 billion

20

Solvay Toll Refining Agreement and Strategic Partnership

● 10 year binding agreement

● Removes Capex for Refinery from economic model

● Reduced project risk due to increased certainty over refining, meeting product quality and delivery expectations with potential off-takers

● Assistance on hydromet plant design & commissioning

● Solvay to manage concentrate storage and finished goods inventory at their plant

● Solvay can produce “special” products (i.e. Y-Eu oxide)

● Solvay to do French customs clearance

● Can assist with design and construction of a new refinery if Avalon expands after 10 years

21

Nechalacho Current Work

● Updated Feasibility Study in progress.

● Investigating sites for Hydromet plant in western Canada

● Preparing for full pilot plant trial of new flow sheet

● Investigating alternatives for financing pilot plant

● Advancing permitting process steadily with

completion anticipated in 2015

● Monitoring REE markets, maintaining dialogue with

government and customers

● Continuing relationship with refining partner, Solvay

22

How Avalon’s Nechalacho Project is Positioned to Succeed

● Unusual Heavy Rare Earth Enrichment ● Large resource with multi-generational operational potential

● Completed Feasibility Study ● Can engage in more formal discussions on off-take and investment

● Relatively low CAPEX estimate for large HREE rich deposit

● Approved Report of Environmental Assessment ● More certainty around permitting timelines

● Strong Management Team ● Committed to developing the Project through to production

● Principles of Sustainability are Core Values ● Environment, health and safety and community partnerships are priority

23

TIN INDUSTRY

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Growing Tin Demand Lead-free solders now account for over 50% of market and is growing with electronics demand

Source: Hallgarten & Co 14 02

25

Tin found in automobiles

Source: ITRI’s Tin for Tomorrow : Contributing to Global

Sustainable Development (www.ITRI.co.uk)

26

New applications for tin (Source: ITRI Tin for tomorrow)

● Fuel catalysts ● Saves energy and reduces

emissions as fuel additive

● Solar Panels ● Next generation of lower

cost solar cell materials

● Lithium Ion Batteries ● Tin can make them last

three times longer

● Fire Retardants ● Tin is replacing antimony

as fire retardant in plastics

● Animal Healthcare ● Heals wounds and kills

bacteria

27

Tin supplies increasingly constrained Indonesian policy and exhaustion of resources

Source: Hallgarten & Co 14 02

28

EAST KEMPTVILLE

Yarmouth, Nova Scotia, Canada

29

East Kemptville, Nova Scotia: North America’s Only Primary Tin Producer

30

Produced from 1985-92 when it

closed due to low tin prices.

Significant resources left unmined.

10,000 tpd mill

subsequently

removed and pit flooded.

Operated as a closed mine

site since 1992.

East Kemptville Location and Regional Infrastructure

East Kemptville

location, 270 km

west of Halifax

Power lines

69kV

138kV

● On paved highway

● Grid power on site

● Yarmouth (55 km)

and other

communities

commuting

distance

● Ample water

● Skilled labour

available locally

31

East Kemptville Avalon’s Project History

● 2005: Initial Special Licence granted

● Required access agreement with surface rights holder

● 2010: Avalon completed an unreleased Desktop Study in with an

independent engineering company

● Included resource estimation and preliminary metallurgical

test work utilizing archived core samples

● May 2014: Access Agreement with surface rights holder for

confirmation drilling program

● Oct. 2014: NI 43-101 Resource completed

● Feb. 2015: Conceptual Redevelopment Study completed on NI

43-101 Resources utilizing new development model (including tin

refinery)

32

Avalon Claims: East Kemptville Area

Avalon claims (purple boundary)

Avalon Special Licence (red boundary)

Rio Algom/BHPB

Closure (blue area)

33

New Special Licence Application Approved by Cabinet March, 2015

Closure

area

(brown

cross

hatch

New

Special

Licence

50462 Three year term

Requires aggregate

expenditures of $5.25

million over three years

Incl. $750,000 in 2015

Access agreement still

required with surface

rights holders

Avalon

Claims

(light blue)

34

Mineral Resources Estimate October 31, 2014

● CIM definitions were followed for Mineral Resources.

● The Independent Qualified Person for this Mineral Resource estimate is Don Hains, P. Geo.

● The resource estimate is based on 275 drill holes totalling 29,587 metres drilled between 1979 and 1991 by previous operators and 7 holes totalling 984 metres drilled by the Company in 2014.

● Mineral resources do not have demonstrated economic viability and their value may be materially affected by environmental, permitting, legal, title, socio-political, marketing, or other issues.

● Full footnotes are with October 31, 2014 News Release “Avalon reports Resource Estimate for East Kemptville TinZinc-Copper-Indium Deposit, Nova Scotia, Canada”

Cla ss ifica tio nSn Cut-o ff

Gra d e

T o nne s

(mT )Sn % Zn % Cu %

>= 0.05 46.07 0.104 0.132 0.051

INDICAT ED >= 0.10 18.47 0.176 0.173 0.064

>= 0.15 6.83 0.239 0.204 0.077

>= 0.20 3.16 0.337 0.268 0.093

>= 0.25 2.93 0.344 0.275 0.092

>= 0.05 34.29 0.102 0.104 0.052

INFERRED >= 0.10 16.95 0.148 0.122 0.062

>= 0.15 2.66 0.203 0.13 0.075

>= 0.20 0.82 0.311 0.138 0.12

>= 0.25 0.58 0.342 0.171 0.117

35

Indium Occurs at East Kemptville

● Not analyzed for historically

● Increased Demand for:

Electronics ● Touch screens

● Thin Film Solar Panels

● Electroluminescent displays

● LEDs

● Superconductors

Nuclear power

36

SOURCE: USGS

Indium closely associated with zinc Demonstrated by microprobe analysis of drill core

● Strong

correlation

indium-zinc

● Microprobe

analysis shows

about 0.25% In

in sphalerite

37

N Sn % Zn % Cu % In % Fe %

Sphalerite 63 0.01 56.564 0.159 0.249 8.557

Chalcopyrite 41 1.37 0.059 33.128 0.082 29.881

Cassiterite 89 99.73 0.004 0.004 0.014 0.153

East Kemptville Conceptual Redevelopment Study Model

● Purpose: to confirm business case for redevelopment of

historic tin mine

● Assumed open pit mine design and similar production rate

(10,000 tpd) with truck and shovel operation

● Similar process flowsheet combining selective flotation of

tin, copper and zinc with gravity concentration of tin using

updated technology. Note: The flowsheet needs further

testwork to bring up to standards for a PEA.

● Addition: Electric arc refinery would take cassiterite

concentrate to 99.85% Sn ingots (LME grade)

● Environmental aspects of model to be confirmed incl.

development of new waste management plan

38

Conceptual Redevelopment Study Cautionary Statement

● The Conceptual Economic Study is preliminary in nature and includes inferred

mineral resources that are considered too speculative geologically to have the

economic considerations applied to them that would enable them to be

categorized as mineral reserves. There is no certainty that the preliminary

economics indicated in the Study will be realized.

● The results were released in Avalon’s News Release of February 25th, 2015

● The Study was prepared by Don Hains, P. Geo, with contributions from the

following independent consultants and "Qualified Persons" for the purposes of

National Instrument 43-101, who have reviewed and approved this portion of the

presentation:

● Bruce Brady, P. Eng. Associate of Hains Engineering Mine Capital &

Operating Costs

● Ross MacFarlane, P. Eng Associate of Hains Engineering Metallurgical

analysis, Process Capital and Operating costs

39

Whittle Pit Mine Design Used in Conceptual Redevelopment Study

40

Ore Waste Strip Grade Grade Grade

Tonnes Tonnes Ratio SN ZN CU

(t) (t) (w:o) (%) (%) (%)

49,335,577 43,378,243 0.88 0.113 0.131 0.053

In pit (light blue) tonnes and grade

Notes:

• Mining rate:10,000 tpd;

• Conventional truck and

shovel open pit mining

operation

• Stripping ratio: 0.88:1

• Recovery of Sn (87%),

Zn (86%) and Cu (75%)by

flotation and gravity

Main Zone

Baby Zone

Tailings Stockpiles

Estimated Costs and Revenues in Conceptual Study

● 3.5 million tonnes per year

● Capital cost of order CAD$200 million

● Operating costs CAD$15/tonne (inclusive of waste)

● Annual operating cost CAD$50 million per year

● Annual revenues CAD$100 million per year

● Metal price assumptions: ● Tin US$23,500 per tonne

● Zinc US$1.00 per lb

● Copper US$3.00 per lb

● 85% of revenue from tin

41

Proposed Mineral Processing Flowsheet (test work to confirm)

42

Potential Mill Recoveries

Sn……..87%

Zn……...86%

Cu……..75%

Next Steps

2015

● Secure full surface tenure

● Aboriginal community

engagement

Commence feasibility work

● $20 million budget (2 years)

● Definition drilling

● Exploration drilling

● Metallurgical test work

● Environmental baseline

Future

● Evaluate the potential of

recovering tin from tailings

● Resource drilling

● Mine and plant engineering

● Environmental assessment

● Waste water management

studies

● Capital Cost ~$200 million

● Initiate Production in 2018?

43

SEPARATION RAPIDS Kenora, Ontario, Canada

44

Separation Rapids: A unique, giant deposit of high purity lithium

minerals: Petalite

45

Redditt

GrassyNarrows

Whitedog

Minaki

Lac du Bonnet

C.P.R.

C.P.R.

C.N.R.

C.N.R.

TRANS-CANADA H IGHWAY

Kenora

BERNIC LAKETANCO MINE

SEPARATION RAPIDSPROPERTY

hydro line

railway

road

0 20

kilom etres

LakeWinnipeg

Winnipeg

cover

greenstone

sediments

granite

71

658

596

525

MANITOBA ONTARIO

Lake ofthe Woods

C.N

.R.

Separation Rapids Location Plan

46

Separation Rapids: New opportunities in petalite market

● Growing demand for glass-ceramics (stovetops)

● Manufacturers looking for new supply sources due to

apparent limits on future supply from traditional source

in Zimbabwe

● Separation Rapids pegmatite is the only known large

undeveloped resource of petalite in the world

● New process development work needed to prove

efficiency of recovery process and provide high purity

product test samples

● Specialized test lab and pilot plant facility identified in

Germany (Anzaplan)

47

Separation Rapids Project 2014 Testwork Overview

● Petalite and feldspar extraction testwork conducted by

ANZAPLAN in Germany during Q1 & Q2, 2014

● Excellent quality Petalite concentrate produced assaying

>4% Li2O (up to 4.3%) & <0.01% Fe

● High purity feldspar product also successfully produced for

potential glass and ceramic markets

● 20 kg of petalite product recently shipped to various

customers for detailed evaluation

● Looking at other product alternatives including high purity

lithium metal or chemicals for battery applications

● Initial leach tests produced encouraging results

48

Separation Rapids Project Ongoing Work

● New core racks were installed and

core transferred from old racks to

new in 2014

● Planning underway for collecting

and processing larger bulk samples

● Consultations with local contractors

and Aboriginal contractors on road

construction and logistics

● Work Permit Application for road

repairs underway.

49

130 Adelaide St. W., Suite 1901

Toronto, Ontario, Canada M5H 3P5

+1 (416) 364-4938

ir@avalonraremetals.com

www.avalonraremetals.com