Leading Edge Materials Reports Fiscal 2019 Results and Records Impairment on the Woxna Graphite Mine
Leading Edge Materials Reports Fiscal 2019 Results and Records
Impairment on the Woxna Graphite Mine
VANCOUVER
,
Jan. 21, 2020
/CNW/ -
Leading Edge Materials Corp.
("
Leading Edge Materials
" or the "
Company
") (
TSXV: LEM
) (
Nasdaq First North:
LEMSE
) (
OTCQB: LEMIF
) announces results for the fiscal year ending
October 31, 2019
. All references to dollar amounts in this release are in Canadian dollars.
Leading Edge Materials management annually assesses impairment with respect to the carrying value of the Company's property, plant and equipment. Leading
Edge Materials management determined that impairment indicators as defined in IAS 36 were present for the Woxna Graphite Mine, and an impairment test was
performed. The Company has applied a value in use method that takes into account the Company's financial position, results of operations, operational issues and
other factors in determining an estimated recoverable amount. This method indicated that an impairment provision of
$8,800,000
was appropriate in fiscal 2019
for the carrying value of the Woxna graphite mine and Kringelgruvan mining lease.
Mark Saxon
, Interim President and CEO, stated:
"2019 was a challenging year for public mining industry markets. Despite this, the very positive developments
in the lithium ion battery and EV markets in
Europe
provides confidence that Leading Edge Materials is placed within a very attractive sector.
The Woxna Graphite Mine is held on a production-ready basis as the research and customer qualification is completed for value-add materials.
Although an
accounting impairment was declared on the Woxna Mine for the year, since the construction of the mine over
$30m
has been invested in the site and these
past investments provide a strategic advantage towards the goal of launching higher-value production."
Highlights
During the past financial year, the Company achieved a number of milestones including:
Completion of an engineering study to design and support the safe and effective installation of a battery graphite demonstration plant on the Woxna mine site.
The demonstration plant is designed to purify and spheronise approximately 100kg of graphite anode per day;
Approval to operate the demonstration plant at the Woxna Mine site was received from the local permitting authority (Länsstyrelsen);
Successful test work on the manufacturing of expandable graphite using large flake material from the Woxna Graphite Mine which produced results in line
with existing commercial products;
Ongoing permitting activities including preparation for a Natura2000 assessment for a Mining Lease application at the Norra Kärr rare earth element project.
Renewed customer and investor interest in secure access to rare earth elements has been witnessed;
Completion of early stage exploration activity on the Bihor Sud Prospecting Permit in
Romania
, and application through competitive tender for an Exploration
License;
In addition, the Company completed an internal strategic review to consider the structural and corporate setting of Leading Edge Materials. The outcomes of the
strategic review continue to guide Company management.
Selected Financial Data
The following selected financial information is derived from the audited consolidated financial statements of the Company prepared in accordance with IFRS.
Year Ended October 31,
October 31,
2019
$
October 31,
2018
$
October 31,
2017
$
Operations
Expenses
(2,393,498)
(4,493,336)
(2,772,709)
Other items
(8,723,909)
107,051
(147,319)
Net loss
(11,117,407)
(4,386,285)
(2,920,028)
Basic and diluted loss per share
(0.12)
(0.05)
(0.03)
Dividends per share
Nil
Nil
Nil
Balance Sheet
Working capital
132,551
960,707
3,490,760
Total assets
24,825,107
35,075,446
37,915,728
Total non-current liabilities
(7,701,324)
(8,306,212)
(8,330,321)
Financial Condition / Capital Resources
During fiscal 2019 the Company recorded a net loss of
$11,117,407
and, as at
October 31, 2019
, the Company had an accumulated deficit of
$38,171
,731 and
working capital of
$132,551
. Subsequent to
October 31, 2019
the Company completed a private placement financing of 18,000,000 units for gross proceeds of
$1,008,000
.
The Company maintains the Woxna Graphite Mine on a "production-ready" basis to minimize costs. The Company currently has no significant budget allocated for
the Norra Kärr Project. Although the Company has sufficient funding to meet anticipated levels of corporate administration and overheads for the ensuing twelve
months, it anticipates that it will need additional capital to maintain current levels of research and development, recommence operations at the Woxna Graphite
Mine and/or upgrade the plant to produce value added production. There is no assurance such additional capital will be available to the Company on acceptable
terms or at all. In the longer term the recoverability of the carrying value of the Company's long-lived assets is dependent upon the Company's ability to preserve
its interest in the underlying mineral property interests, the discovery of economically recoverable reserves, the achievement of profitable operations and the ability
of the Company to obtain financing to support its ongoing exploration programs and mining operations. Whether the Company can generate positive cash flow
and, ultimately, achieve profitability is uncertain. These uncertainties may cast significant doubt upon the Company's ability to continue as a going concern.
Financings
No financings were undertaken during fiscal 2019.
Summary and Outlook
Work undertaken by Leading Edge Materials during fiscal 2019 has been in line with the outcomes of the internal strategic review completed in
May 2019
. The
Company remains focused on the future supply of raw materials to a rapidly growing European lithium ion battery and EV market. Key elements of the Company's
ongoing investment strategy include: high value product development work on the Woxna graphite mine in particular battery anode material; increasing community
engagement and technical knowledge at the Norra Kärr rare earth element project; and advancing discovery opportunities in cobalt, nickel and base metals in
Romania
, subject to granting of an Exploration License at Bihor Sud.
At the Woxna graphite production facility, the Company is focused on optimization of the purification and shaping processes required to convert low value graphite
into high value lithium ion battery-ready anode material. Laboratory based work to date has produced battery-ready anode materials that meet the
electrochemical specifications of battery cell manufacturers. Larger scale test work using an on site demonstration plant is proposed to optimize a purification flow
sheet and definition of equipment requirements to produce battery grade materials and other salable by-products.
In
Romania
, Leading Edge Materials operates a local branch company ("
LEM
Romania
") of which it is the majority shareholder with the right to earn a 90%
interest. During 2019, LEM Romania completed early stage exploration activity on the 25.5 sq km (2,550 ha) Bihor Sud Prospecting Permit. On the basis of
positive results LEM Romania elected to submit an Exploration License application in a competitive tender process.
Qualified Person
The technical content of this release has been reviewed and approved by Mr.
Mark Saxon
, B.Sc. Hons (Geology), a Fellow of the Australasian Institute of Mining
and Metallurgy, the Company's Interim President and CEO and a Qualified Person as defined by National Instrument 43-101.
On behalf of the Board of Directors,
Leading Edge Materials Corp.
Mr.
Mark Saxon
, Interim President and 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. LEM's assets and research focus are towards the raw materials for
Li-ion batteries (graphite, lithium, cobalt); materials for high thermal efficiency building products (graphite, silica, nepheline); and materials that improve the
efficiency of energy generation (dysprosium, neodymium, hafnium). Investments are linked to the global shift to low-carbon energy generation and energy storage.
Leading Edge Materials currently operate in four divisions, Graphite, Lithium, Rare Earth and Cobalt.
Additional Information
The Company's consolidated financial statements for the year ended
October 31, 2019
and related management's discussion and analysis are available on the
Company's website at
www.leadingedgematerials.com
or under its profile on SEDAR at
www.sedar.com
.
This information is inside information that Leading Edge Materials Corp. (publ). 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 below, at
21 January, 2020
at
6:15 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 on Nasdaq First North and may be contacted via email
or by phone +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, 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.
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 21:15e 21-JAN-20