Leading Edge Materials Ceo’S Report to the Shareholders
NEWS RELEASE March 28, 2022
LEADING EDGE MATERIALS CORP.
1305 – 1090 West Georgia Street, Vancouver, BC, V6E 3V7
[email protected] | www.leadingedgematerials.com
TSX.V: LEM | Nasdaq First North: LEMSE | OTCQB: LEMIF | FRA: 7FL
LEADING EDGE MATERIALS CEO’S REPORT TO THE SHAREHOLDERS
Stockholm, March 28, 2022 – Leading Edge Materials Corp. (“Leading Edge Materials” or the
“Company”) (TSXV: LEM) (Nasdaq First North: LEMSE) (OTCQB: LEMIF) (FRA: 7FL) provides a
letter from the Chief Executive Officer.
CEO’S REPORT TO THE SHAREHOLDERS
Pandemic, war and climate change - the world as we know it is changing dramatically. Our vision,
materials for change, is right in the middle of these societal challenges. A change in the energy
system towards renewables and energy storage, electrified mobility solutions and resilient and
sustainable supply-chains will need new materials and new sources for those materials. This is
where the projects we have and the work we do on them becomes critically important.
Graphite is a key material to enable the energy transition, where most lithium-ion battery
chemistries use graphite for the anode. As demand for lithium-ion batteries grows exponentially,
demand for graphite is expected to grow by a factor of three by 2030 i. Currently production of
graphite for batteries is dominated by China.
Our Woxna graphite mine is one of few already built and permitted graphite mines in the western
world. The Company’s strategy is to establish a vertically integrated mine to anode material
production unit which could offer a secure and sustainable supply of anode materials for
European battery producers at the same time demand is expected to grow significantly.
Rare earth elements are needed to produce the high strength permanent magnets that are critical
for the motors for electric vehicles and generators for wind turbines. As these technologies are set
to grow significantly the market for magnet rare earth oxides is forecasted to increase five times
by 2030ii. China is again the dominant supplier of rare earth oxides and permanent magnets.
Our Norra Karr rare earth project is one of the world’s most significant deposits for heavy rare
earth elements such as dysprosium and terbium, and the only deposit of its kind in the European
Union. In addition, the project has the potential to supply by-products such as the industrial
mineral nepheline syenite, zirconium and niobium. Bringing the project into production could be a
key enabler for a European mine-to-magnet value-chain.
As we entered last year, we were working on 4 main objectives; demonstrate the economic
potential of our Woxna graphite mine to anode material project, redesign the Norra Karr rare
earth project to improve the conditions for a granted mining lease, focus our resour ces on the two
main Swedish projects, and get the exploration license in Romania granted.
• We successfully completed the preliminary economic assessment for the Woxna graphite
anode projectiii (the “Woxna PEA”) with exceptional economic figures for the project with a
post-tax NPV(8%) at US$248m and a post-tax internal rate of return of 37.4%. Using the
inputs and outputs from the Woxna PEA we commissioned UK-based consultancy firm
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Minviro Ltd. to perform an ISO-compliant life-cycle assessment on the project, which
demonstrated a potential 85-90% reduction in CO2 footprint of anode material to be
produced from Woxna compared with current Chinese supply alternatives iv. Lastly, we
signed a non-binding heads of agreement with the Australian company Sicona Battery
Technologies Pty Ltd for the establishment of a Sweden based 50/50 joint venture
targeting the production of advanced natural graphite and silicon-graphite-carbon
composite anode materialsv;
• The redesign of the Norra Karr project resulted in the release of a preliminary economic
assessment reportvi (the “Norra Karr PEA”) delivering strong financial results with a post-tax
NPV(10%) of US$762m and post-tax IRR of 26.3%. More importantly, the redesign
presented a revised flowsheet where operations at the deposit site only includes mining
and physical beneficiation whereas chemical leaching and recovery of the rare earth oxides
is moved to a more suitable off-site location. The benefits of this new flowsheet are a
significant improvement in resource utilization, the removed need for wet chemical tailings
dams and an 80% reduction in land area usage at site. All changes are expected to improve
the conditions for a granted mining lease for the project;
• We completed the sale of our Swedish lithium exploration projectvii;
• The granting of the exploration license for our nickel-cobalt project in Romania
unfortunately continued to be evaluated with no news.
The fundamental drivers underpinning our vision and strategies continue to be supportive.
Increasing demand coupled with ongoing supply side issues such as a global power crunch and
shipping disruptions have led to significant price increases over the last 12 months. Graphite
prices in Europe, including spherical purified graphite (being the anode material fe edstock), are
recently reportedviii to be up almost 40-50% compared to the same period last yearix. Key magnet
rare earth oxide prices are up between 27 and 150% year on year x.
Governments in the western world launching initiatives to support the development of domestic
sources of critical raw materials to reduce reliance on China, the European Union being no
exception. The European Raw Materials Alliance released its action plan on rare earth elements xi
including a proposed bridge fund of up to €200m per year to fund projects, the European
Parliament adopted a European strategy for critical raw materials xii and more recently the EU
leaders addressed strategic dependencies on critical raw materials in the Versailles Declaration xiii
as a response to the Russian invasion of Ukraine.
Considering the improved graphite market conditions, we are evaluating the potential restart of
production of flake graphite concentrate at Woxna and we will update on this in the near future.
This is in parallel, but ultimately connected to our anode material development project where we
are producing bulk samples of material together with our preferred suppliers. This material will be
further refined by Sicona and subsequently tested internally and provided to potential custo mers
for evaluation. Subject to a successful outcome of this test program we will then negotiate the
formal joint venture and decide on the establishment of a commercial demonstration plant.
For Norra Karr we are continuing our work with our consultants to update our mining lease
application based on the new plans for the project. A recent decision by the Swedish government
to grant a mining lease on a separate project in Sweden xiv might positively influence the scope of
assessment required for a mining lease compared with the subsequent environmental permit
application process.
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We continue to work with our Romanian joint venture partner in preparation of a hopefully
positive outcome on our exploration license application. Should this materialize we have a
prepared exploration program that we look forward to putting into motion to test the potential for
high-grade nickel and cobalt mineralizations. Both nickel and cobalt prices have risen sharply over
recent months making the opportunity for this project even more attractive lately.
None of this work would have been possible without the support of our shareholders, which we
thank you for. In the recently closed first fiscal quarter of 2022 we saw continuing support from
long-term shareholders through the exercise of options and warrants for proceeds of C$1,665,500,
with many warrants and options still outstanding with exercise prices deep in the money. During
fiscal 2021 our share price increased by 120%, and as of this letter’s date it is up 479% from May 4,
2020, when the new Board of Directors joined the Company, and I was given the opportunity to
lead the Company as the CEO. Looking forward, we are committed to do our utmost to uphold this
track-record of delivering shareholder returns.
On behalf of the Board of Directors,
Leading Edge Materials Corp.
Filip Kozlowski, CEO
For further information, please contact the Company at:
www.leadingedgematerials.com
Follow us
Twitter: https://twitter.com/LeadingEdgeMtls
Linkedin: https://www.linkedin.com/company/leading-edge-materials-corp/
Qualified Person
The scientific, technical and economic information related to the Norra Karr project has been reviewed and
approved by Dr. Rob Bowell of SRK Consulting (UK) Ltd, a chartered chemist of the Royal Society of Chemistry,
a chartered geologist of the Geological Society of London, and a Fellow of the Institute of Mining, Metallurgy
and Materials, who is an independent Qualified Person under the terms of NI 43-101 for REE deposits.
The scientific, technical and economic information related to the Woxna Graphite project has been reviewed
and verified by Christopher Stinton of Zenito Limited, BSc (Hons), CEng MIMMM, an independent Qualified
Person as defined by NI 43-101.
About Leading Edge Materials
Leading Edge Materials is a Canadian public company focused on developing a portfolio of critical raw
material projects located in the European Union. Critical raw materials are determined as such by the
European Union based on their economic importance and supply risk. They are directly linked to high growth
technologies such as batteries for electromobility and energy storage and permanent magnets for electric
motors and wind power that underpin the clean energy transition towards climate neutrality. The portfolio of
projects includes the 100% owned Woxna Graphite mine (Sweden), Norra Karr HREE project (Sweden) and the
51% owned Bihor Sud Nickel Cobalt exploration alliance (Romania).
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Additional Information
The information was submitted for publication through the agency of the contact person set out above, on
March 28, 2022, at 1:00 pm Vancouver time.
Leading Edge Materials is listed on the TSXV under the symbol “LEM”, OTCQB under the symbol “LEMIF” and
Nasdaq First North Stockholm under the symbol "LEMSE". Mangold Fondkommission AB is the Company’s
Certified Adviser on Nasdaq First North and may be contacted via email [email protected] or by phone +46 (0)
8 5030 1550.
Reader Advisory
Certain information in this news release may constitute forward- looking statements or forward-looking information within the
meaning of applicable Canadian securities laws (collectively, “Forward-Looking Statements”). All statements, other than statements
of historical fact, addressing activities, events or developments that the Company believes, expects or anticipates will or may occur
in the future are Forward-Looking Statements. Forward-Looking Statements are often, but not always, identified by the use of words
such as “seek,” “anticipate,” “believe,” “plan,” “estimate,” “expect,” and “intend” and statements that an event or result “may,” “will,”
“can,” “should,” “could,” or “might” occur or be achieved and other similar expressions. Forward-Looking Statements are based upon
the opinions and expectations of the Company based on information currently available to the Company. Forward -Looking
Statements are subject to a number of factors, risks and uncertainties that may cause the actual results of the Company to differ
materially from those discussed in the Forward-Looking Statements including, among other things, the Company has yet to generate
a profit from its activities; there can be no guarantee that the estimates of quantities or qualities of minerals disclosed in the
Company’s public record will be economically recoverable; uncertainties relating to th e availability and costs of financing needed in
the future; competition with other companies within the mining industry; the success of the Company is largely dependent upon the
performance of its directors and officers and the Company’s ability to attract and train key personnel; changes in world metal
markets and equity markets beyond the Company’s control; the possibility of write-downs and impairments; the risks associated with
uninsurable risks arising during the course of exploration; development and production; the risks associated with changes in the
mining regulatory regime governing the Company; the risks associated with tenure to the Norra Karr property; the risks associated
with the various environmental regulations the Company is subject to; rehabilitation and restitution costs; the Woxna project has
never defined a mineral reserve or a feasibility study and the associated increased risk of technical and economic failure in case of
restarting production; risks relating to the preliminary and non-binding nature of the MOU with Sicona. On June 9, 2021, Leading
Edge announced the results of an independent preliminary economic assessment for the development of Woxna (the "2021 Woxna
PEA"), the full details of which are included in a technical report entitled "NI 43-1 01 Technical Report – Woxna Graphite" prepared
for Woxna Graphite AB with effective date June 9, 2021 and issue date July 23, 2021, available on Leading Edge's website
www.leadingedgematerials.com and under its SEDAR profile www.sedar.ca. The 2021 Woxna PEA is preliminary in nature, it 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, and there is no certainty that the preliminary economic assessment
will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. On July 22, 2021,
Leading Edge announced the results of an independent preliminary economic assessment for the development of Norra Karr (the
"2021 Norra Karr PEA"), the full details of which are included in a technical report titled “PRELIMINARY ECONOMIC ASSESSMENT OF
NORRA KARR RARE EARTH DEPOSIT AND POTENTIAL BY-PRODUCTS, SWEDEN" prepared for Leading Edge Materials Corp. with effective
date August 18, 2021 and issue date August 19, 2021, available on Leading Edge's website www.leadingedgematerials.com and under
its SEDAR profile www.sedar.ca. The 2021 Norra Karr PEA is preliminary in nature, it includes inferred mineral resources that are
considered too sp eculative geologically to have the economic considerations applied to them that would enable them to be
categorized as m ineral reserves, and there is no certainty that the preliminary economic assessment will be realized. Mineral
resources that are not mineral reserves do not have demonstrated economic viability. On March 11, 2020, the World Health
Organization (“WHO”) declared the novel coronavirus outbreak identified as “COVID-19”, as a global pandemic. In order to combat
the spread of COVID-19 governments worldwide have enacted emergency measures including travel bans, legally enforced or self-
imposed quarantine periods, social distancing and business and organization closures. These measures have caused material
disruptions to businesses, governments and other organizations resulting in an economic slowdown and increased volatility in
national and global equity and commodity markets. The Company has implemented safety and physical distancing procedures,
including working from home where possible and ceased all travel, as recommended by the various governments. The Company will
continue to monitor the impact of the COVID-19 outbreak, the duration and impact which is unknown at this time, as is the efficacy
of any intervention. It is not possible to reliably estimate the length and severity of these developments and the i mpact on the
financial results and condition of the Company and its operations in future periods.
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i https://www.spglobal.com/commodity-insights/en/market-insights/latest-news/energy-transition/021622-
feature-graphite-supply-a-concern-in-meeting-growing-battery-demand
ii https://www.mining.com/magnet-rare-earth-oxides-market-to-increase-fivefold-by-2030-report/
iii See National Instrument 43-101 report entitled "NI 43-101 Technical Report – Woxna Graphite" prepared for
Woxna Graphite AB with effective date June 9, 2021 and issue date July 23, 2021. See Leading Edge Materials
Corp.’s SEDAR profile on www.sedar.ca or www.leadingedgematerials.com for report and more information.
The PEA is preliminary in nature, it 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, and there is no certainty that the PEA will be realized.
iv https://leadingedgematerials.com/wp-content/uploads/2022/03/2021-Woxna-Graphite-LCA-report-by-
Minviro.pdf
v https://leadingedgematerials.com/leading-edge-materials-announces-proposed-joint-venture-plans-for-
advanced-anode-materials-business-with-sicona/
vi See National Instrument 43-101 report titled “PRELIMINARY ECONOMIC ASSESSMENT OF NORRA KÄRR RARE
EARTH DEPOSIT AND POTENTIAL BY-PRODUCTS, SWEDEN" prepared for Leading Edge Materials Corp. with
effective date August 18, 2021 and issue date August 19, 2021. See Leading Edge Materials Corp.’s SEDAR
profile on www.sedar.ca or www.leadingedgematerials.com for report and more information. The PEA is
preliminary in nature, it 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, and there is no certainty that the PEA will be realized.
vii https://leadingedgematerials.com/leading-edge-materials-completes-sale-of-100-of-the-bergby-lithium-
project/
viii https://www.indmin.com/Article/5089795/Graphite/Strong-demand-in-China-tightening-supply-support-
graphite-markets.html
ix https://www.indmin.com/Article/3978011/Graphite-LatestNews/GLOBAL-GRAPHITE-SNAPSHOT-Prices-
stable-but-freight-costs-new-material-sources-add-uncertainty.html
x https://treo.substack.com/p/trust-is-no-entitlement-russia-ukraine?s=r
xi https://erma.eu/european-call-for-action/
xii https://www.europarl.europa.eu/doceo/document/TA-9-2021-0468_EN.pdf
xiii https://www.consilium.europa.eu/media/54773/20220311-versailles-declaration-en.pdf
xiv https://www.regeringen.se/pressmeddelanden/2022/03/regeringen-beviljar-bearbetningskoncession-for-
kallak-k-nr-1/