Industry and Information Bulletins

Dear Shareholder:

In our ongoing efforts to provide you with broader communications and industry information, we are pleased to issue another Industry Bulletin discussing recent trends in the markets of various rare and strategic metals.  In this edition, we focus on lithium and the recent announcements from both AG Daimler, makers of Mercedes Benz, and General Motors regarding their adoption of Lithium Ion battery technology in several of their new models of hybrid and electric cars.

The key point here is Daimler engineers claim to have developed a special system for cooling the battery, thus solving the "overheating-under-certain-conditions" safety concern expressed recently by several manufacturers, that has been the main reason for delaying the introduction of the Lithium Ion battery into hybrid and electric cars.

Lithium Ion batteries are lighter, more powerful and more compact than the nickel-metal hydride batteries currently used in hybrid cars. As Edward Taylor et al report in their Wall Street Journal piece on March 1, 2008, "Analysts believe a Toyota Prius with lithium ion batteries could get up to 80 miles per gallon, up from 50 miles per gallon"   

http://www.reuters.com/articlePrint?articleId=USL2952822120080229

http://online.wsj.com/article_email/SB120433052881404369-lMyQjAxMDI4MDA0MTMwMzEwWj.html

Avalon is well positioned to benefit from the new demand for Lithium Ion batteries through its large lithium resource at its Separation Rapids property in Northwestern Ontario. Avalon continues to investigate the feasibility of producing lithium chemicals for the rapidly growing Lithium Ion battery market.  Furthermore, the increased demand for lithium carbonate to serve the automotive battery market is likely to push up prices which will make lithium carbonate less competitive in glass and ceramics applications, creating new market opportunities for Avalon´s lithium minerals products.

Finally, announcements such as these by Daimler and GM only go to reinforce Avalon´s contention that it is well positioned to benefit from the ´Cleantech´ phenomenon, as noted in our Industry Bulletin of February 26, 2008.

If you have any comments or questions, please do not hesitate to post them on Avalon´s official investor relations hub at http://www.agoracom.com/ir/Avalon.

Regards,

AGORACOM Investor Relations