Leading Edge Materials Finalizes Strategic Review and Updates Execution Path for Woxna Graphite Mine
Leading Edge Materials Finalizes Strategic Review and Updates Execution
Path for Woxna Graphite Mine
VANCOUVER
,
May 27, 2019
/CNW/ -
Leading Edge Materials Corp.
("
Leading Edge Materials
" or the
"Company
") (
TSXV: LEM
) (
OTCQB: LEMIF
) (
Nasdaq
First North: LEMSE
) is pleased to announce completion of the internal corporate strategic review (the "
Strategic Review
") announced 7
th
January 2019
, and
updated 4
th
March 2019. The review was led by Company Chairman Mr.
Michael Hudson
and Mr.
Filip Kozlowski
, an independent Director.
Following the recommendation of the Strategic Review, the Board has resolved to initiate the transition of its Swedish subsidiary Woxna Graphite AB into a
freestanding company. It is expected that the freestanding structure will enable Woxna Graphite AB to execute more effectively upon a high value graphite
materials business plan by undertaking strategic financings independent of Leading Edge Materials, and allowing the local team to be expanded with an increased
focus on customer and stakeholder relationships. Furthermore, it is anticipated that Woxna Graphite AB will be in a stronger position to benefit from Swedish and
European public funding opportunities that are developing in the battery materials sector.
Based on the findings of the Strategic Review, the Board is of the view that the proposed strategy will be the least dilutive to existing Leading Edge Materials
shareholders, while enabling the Woxna graphite project to access the funding necessary to further develop the materials, technology and corporate profile
required to become a leading European supplier of high value graphite products. With more secure funding, the fully built Woxna graphite mine will maintain its
early mover status in the European natural graphite market, and be best positioned to gain off take agreements for battery anode materials through installation
and operation of the proposed battery anode demonstration plant.
The transition process will be initiated immediately and the Board is now identifying the appropriate leadership and other resources required to enable swift
progress. The Board will communicate these findings as they become available.
Subject to a range of technical, financial and market interest milestones being achieved, an Initial Public Offering ("IPO") on a Swedish public market may be
considered in the future for Woxna Graphite AB.
Mark Saxon
, Interim President and CEO, stated
"Despite the widespread evidence of rapid growth in the lithium ion battery and electric vehicle markets, North
American mining markets remain subdued with limited funding opportunities. Through the Strategic Review we have identified potential funding pathways in
Europe
that are open for direct project investment. The Board strongly believes direct funding of Woxna Graphite AB, shall be the least dilutive way to finance
the Woxna graphite mine through to production of high value graphite products."
The Board emphasizes that Leading Edge Materials will continue to hold significant exposure to the success of the Woxna graphite mine as a future graphite
materials supplier. Meanwhile, the Board will continue to execute on other assets within the Company's portfolio in the Nordic region and Romania. Interest in the
Company's portfolio of assets is demonstrated by the recent focus on rare earth element supply security following speculation of trade conflict between
USA
and
China
.
The proposed restructure is subject to the receipt of all necessary regulatory approvals that are customary for a transaction of this nature.
Update on developments in the European Battery Industry
The Leading Edge Materials Board remains confident in the strategy to focus on the supply of high value materials to the European lithium-ion battery market.
Lithium-ion battery and electric vehicle ("EV") markets are showing very rapid growth through the aligned interests of battery manufacturers, the automotive
industry and the European Commission.
Volkswagen AG have expressed their "Strategy 2025" ambition, to "build cars for millions, not millionaires" with more than 50 EV models planned by 2025,
requiring 6 lithium-ion battery factories equivalent to Tesla's
Nevada
giga-factory alone. Daimler's recent "Ambition 2039" statement outlines the
aim to have
plug-in hybrids or all-electric vehicles comprise more than 50% of its car sales by 2030 and CO
2
-neutral production in
Europe
as of 2022.
Support for battery and battery materials production within
Europe
are at unprecedented levels, with emerging Swedish lithium ion battery manufacturer Northvolt
receiving a €350m loan from the European Investment Bank ("EIB") during May 2019. The European Commission's Vice President for the Energy Union, Maroš
Šefčovič stated after a recent EU Battery Alliance meeting:
"Our goal is to see European champions take the lead in the global arena. Batteries are a key
strategic sector for the future of mobility and decarbonisation of our economy.
"
Furthermore, Mr Šefčovič commented "
We must also show that we mean business when filling the remaining gaps in the value chain, notably mining and
refining. EU companies need to be better supported to invest in sustainable mining and refining of raw materials – both in EU and third countries. We plan to
launch a European Raw materials investment facility with the EBRD and the EIB – hopefully at the end of the year.
"
Further information can be found at
http://europa.eu/rapid/press-release_STATEMENT-19-2337_en.htm
.
The proposed "European raw materials investment facility" backed by the European Bank for Reconstruction and Development ("EBRD") and the EIB is
anticipated to provide financial support for accelerated exploration and development of critical raw materials including graphite, lithium, cobalt and rare earth
elements within the European Union, to increase supply security and sustainability of the lithium-ion battery and automotive industries.
On behalf of the Board of Directors,
Leading Edge Materials Corp.
Mr.
Mark Saxon
, Interim CEO
About Leading Edge Materials
Leading Edge Materials is a Canadian public company focused on production of high value critical raw materials for the European market, with an operating base
in the Nordic region, a region well recognized for its promotion and investment in innovation. LEM's flagship asset is the Woxna Graphite production facility
located in central
Sweden
targeting the supply of specialty materials for lithium ion battery production.
Additional Information
This information is inside information that Leading Edge Materials Corp. is obliged to make public pursuant to the EU Market Abuse Regulation. The information
was submitted for publication through the agency of the contact person set out above, at
27th May 2019
at
4:15 PM
Vancouver time.
Leading Edge Materials is listed on the TSXV under the symbol "LEM" and Nasdaq First North Stockholm under the symbol "LEMSE". Mangold Fondkommission
AB is the Company's Certified Adviser ("
CA
") on Nasdaq First North and may be contacted at +46 (0) 8 5030 1550.
Reader Advisory
This news release may contain statements which constitute "forward-looking information", including statements regarding the plans, intentions, beliefs and
current expectations of the Company, its directors, or its officers with respect to the future business activities of the Company. The words "may", "would",
"could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions, as they relate to the Company, or its management, are
intended to identify such forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future business
activities and involve risks and uncertainties, and that the Company's future business activities may differ materially from those in the forward-looking
statements as a result of various factors, including, but not limited to, timing and, closing and the results of the proposed restructuring of Woxna Graphite AB,
an IPO of Woxna Graphite AB, fluctuations in market prices, successes of the operations of the Company, continued availability of capital and financing and
general economic, market or business conditions. There can be no assurances that such information will prove accurate and, therefore, readers are advised to
rely on their own evaluation of such uncertainties. The Company does not assume any obligation to update any forward-looking information except as required
under the applicable securities laws.
Woxna has never defined a mineral reserve and the previous preliminary economic assessment on Woxna dated
October 29, 2013
, has been superseded by
the Company's current technical report dated
May 11, 2015
. As the Woxna facility is not in production but remains on a production ready status, any future
decision to recommence mining at Woxna will not be based on a preliminary economic assessment demonstrating the potential viability of mineral resources or
feasibility study of mineral reserves demonstrating economic and technical viability. Under these circumstances, there is increased risk of technical and
economic failure for the Woxna project, and the Company discloses additional risk factors relating thereto. The Company advises that it has not based its
production decision on a feasibility study of mineral reserves, demonstrating economic and technical viability, and, as a result, there may be an increased
uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a
commercially mineable deposit. Historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that production will
begin as anticipated or at all or that anticipated production costs will be achieved. Failure to commence production would have a material adverse impact on
the Company's ability to generate revenue and cash flow to fund operations. Failure to achieve any anticipated production costs would have a material adverse
impact on the Company's cash flow and future profitability. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept
responsibility for the adequacy or accuracy of this news release.
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For further information:
Please contact the Company at: 1.604.685.9316, [email protected], www.leadingedgematerials.com
CO: Leading Edge Materials
CNW 19:15e 27-MAY-19