Leading Edge Materials Reports Quarterly Results to
Leading Edge Materials Reports Quarterly Results to April
30th 2019
VANCOUVER
,
June 27, 2019
/CNW/ -
Leading Edge Materials Corp.
("
Leading Edge Materials
" or the
"Company
")
(
TSXV: LEM
) (
OTCQB: LEMIF
) (
Nasdaq First North: LEMSE
) announces second quarter results for the period ending
April
30, 2019
. All amounts in this release are in Canadian dollars.
Work undertaken by Leading Edge Materials during the second quarter of 2019 was in line with the Board's established plan to
benefit from and support the roll out of transport electrification in
Europe
, while responding to the findings of an internal
strategic review that was implemented in
January 2019
and completed in
May 2019
.
The strategic review was completed by Company Chairman, Mr.
Michael Hudson
and Mr.
Filip Kozlowski
, an independent
Director. The review highlighted that the Company's combination of discovery-stage and development-stage assets may
present different requirements with regard to operational structure, capital needs and investor preferences. As a result, the
Board 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 allow 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.
The transition process has been initiated, and the Board is identifying the appropriate leadership and other resources required
to enable swift progress. The Board will communicate these findings as they become available. 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.
At the Woxna graphite mine, 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. An engineering study (the "
Study
") was
completed by a leading global engineering firm during the period, using data from the extensive purification and spheronisation
test work completed by the Company over past years. The Study provides design, installation and cost estimate criteria for a
spheronisation and thermal purification process that can deliver approximately 100kg per day of high purity natural graphite
anode suitable for lithium ion batteries.
The thermal purification process is designed with a high degree of flexibility. Recent test work by Leading Edge Materials has
produced ultra-high purity graphite up to 99.998% carbon and the process flexibility will allow purity to be tailored to customers
performance and price requirements. Spheronisation test work produced D50 size ranges from 15 to 25 micron with D10
ranges of 7 to 12 micron and D90 from 28 to 35 micron. These ranges meet specifications provided by potential customers
and are consistent with anode materials used by all current lithium ion battery manufacturers.
Subject to financing, the Company plans to advance the development of an onsite demonstration plant to produce battery-
ready graphite anode. This demonstration plant will allow engagement with customers by providing volumes of anode
materials that are adequate to be used within customer test circuits.
In 2018 Leading Edge Materials initiated an Exploration Alliance (the "
Exploration Alliance
") in
Romania
focused on the
discovery and development of lithium ion battery raw materials. The Exploration Alliance has principally been directed towards
cobalt mineralization within the Upper Cretaceous Carpathian magmatic belt of the Balkan region. The Carpathian is a well
mineralized intrusive arc that extends from
Western Turkey
to
Hungary
, forming the western end of the Tethyan Metallogenic
Belt.
Following technical and commercial due diligence, Leading Edge Materials established a local branch company ("LEM
Romania") of which it is the majority shareholder with the right to earn a 90% interest. LEM Romania holds access and work
permits across an area of 25.5 sq km (2,550 ha) pertaining to the Bihor Sud Prospecting Permit in central western Romania.
Bihor Sud lies within the same intrusive belt and less than 400km north of the Timok copper-gold project in Serbia. Other
notable deposits in the West Tethyan Metallogenic Belt include Skouries, Chelopech, Bor and Majdanpek.
Staff and consultants to LEM Romania were active at Bihor Sud during the reporting period, compiling historic data, sampling
historic mine waste dumps, completing preliminary ground geophysics and soil sampling. Review of progress and results to
date are considered highly encouraging, and it is anticipated that LEM Romania shall proceed to Exploration License
application across prospective areas.
The Norra Kärr rare earth element project lies in south-central
Sweden
, 15 km northeast of the township of Gränna and 300
km southwest of the capital
Stockholm
in mixed forestry and farming land. Process development testwork and other activity at
Norra Kärr remains restricted while permitting of a Mining Lease is resolved.
The Norra Kärr project is held upon a granted Exploration License, while a reapplication process for a Mining Lease remains in
progress. In
December 2018
, Leading Edge Materials submitted supplementary information regarding the updated Norra Kärr
Mining Lease application to the Bergsstaten ("Swedish Mining Inspectorate"). The Bergsstaten forwarded the supplementary
information to the Länsstyrelsen ("County Administration Board") of Jönköping. On
March 8th, 2019
, Länsstyrelsen submitted
their opinion that more information is required for them to support re-granting of the Norra Kärr Mining Lease.
Leading Edge Materials reviewed the comments of the Länsstyrelsen, and has initiated a Natura2000 permit application on
Natura2000 areas in the Norra Kärr region which may be influenced by a future mining operation. The Natura2000 permit
application will be completed within the Swedish summer months and submitted to support the Mining Lease application.
The Company continues to be an active participant in the EU Battery Alliance, a forum comprised of more than 50 of
Europe's
strongest corporate voices within the emerging lithium ion battery sector, plus numerous support and government agencies.
Selected Financial Data
The following selected financial information is derived from the unaudited condensed consolidated interim financial statements
of the Company prepared in accordance with IFRS.
Fiscal 2019
Fiscal 2018
Fiscal 2017
Three Months Ended
April 30,
2019
$
January 31,
2019
$
October 31,
2018
$
July 31,
2018
$
April 30,
2018
$
January 31,
2018
$
October 31,
2017
$
July 31,
2017
$
Operations
Expenses
(571,749)
(850,681)
(1,151,305)
(697,426)
(665,364)
(1,976,066)
(843,952)
(598,339)
Other items
46,864
1,602
39,448
(7,721)
32,508
39,641
75,938
(85,392)
Comprehensive loss
(524,885)
(849,079)
(1,111,857)
(705,147)
(632,856)
(1,936,425)
(768,014)
(683,731)
Basic and diluted loss per
share
(0.01)
(0.01)
(0.01)
(0.01)
(0.01)
(0.02)
(0.00)
(0.01)
Financial Position
Working capital
929,183
1,438,895
960,707
1,369,748
2,041,550
2,698,150
3,490,760
4,430,469
Total assets
35,359,241
35,766,406
35,075,446
36,132,517
36,139,745
36,902,593
37,915,728
39,267,743
Total non-current liabilities
(8,637,726)
(8,515,027)
(8,306,212)
(8,902,310)
(8,157,203)
(8,204,190)
(8,330,321)
(9,557,984)
Results of Operations
Three Months Ended
April 30, 2019
Compared to Three Months Ended
January 31, 2019
During the three months ended
April 30, 2019
(the "Q2") the Company reported a net loss of
$524,885
compared to a net loss
of
$849,079
for the prior three months ended
January 31, 2019
(the "Q1"), for a decrease in loss of
$324,194
. The decrease
in loss was mainly attributed to the following:
(i)
during Q1 the Company recognized a $200,000 termination payment and $49,998 management fee charged by the former CEO and President of the Company; and
(ii)
during Q2 the Company recorded cost recoveries of $35,273. The Company has received public research funding into Woxna Graphite AB to conduct research on developing a shared lithium refinery in the Nordic
region.
Financial Condition / Capital Resources
During the 2019 period the Company recorded a net loss of
$1,373,964
and, as at
April 30, 2019
, the Company had an
accumulated deficit of
$28,428,288
and working capital of
$929,183
. The Company is maintaining its 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, the Company will need additional capital at the Woxna Graphite Mine to modernize the plant to
produce value added production. In addition, the Norra Kärr Property will require significant funds for development. 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
Nil
Summary and Outlook
To position the Company for the future, Leading Edge Materials' completed an internal Strategic Review during the period.
Based on this strategic review, the Board has resolved to seek direct funding opportunities for the Woxna graphite mine. The
Board emphasizes that Leading Edge Materials will continue to hold significant exposure to the success of the Woxna graphite
mine as a future anode supplier, while enabling resources to be allocated to progress discovery at other projects within the
portfolio.
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
The Company's condensed consolidated interim financial statements for the six months ended
April 30, 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
.
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 CA on Nasdaq First North and may be contacted at +46 (0) 8 5030
1550.
This information was submitted by Leading Edge Materials for publication, through the agency of the contact person set out
above, on
June 27, 2019
at
2:00 p.m. Pacific time
.
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 17:00e 27-JUN-19