Leading Edge Materials Reports Quarterly Results to
Leading Edge Materials Reports Quarterly Results to July
31st 2019
VANCOUVER
,
Sept. 27, 2019
/CNW/ -
Leading Edge Materials Corp.
("
Leading Edge Materials
" or the
"Company
")
(
TSXV: LEM
) (
OTCQB: LEMIF
) (
Nasdaq First North: LEMSE
) announces third quarter results for the period ending
July
31st, 2019
. All amounts in this release are in Canadian dollars.
Work undertaken by Leading Edge Materials during the third quarter of 2019 was in line with the Board's established plan to
benefit from the roll out of transport electrification in
Europe
, while responding to the findings of an internal strategic review
completed in
May 2019
.
The strategic 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 elected to seek direct funding into its Swedish subsidiary Woxna Graphite AB, and if successful initiate the transition of
Woxna Graphite AB into a freestanding company. A freestanding structure may 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 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.
Direct funding opportunities have been sought during the reporting period. The Board is reviewing potential alternatives, along
with identifying appropriate leadership and other resources. 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 processes required to convert low value graphite
into high value finished products including lithium-ion battery-ready anode material.
During the reporting period, research was completed to manufacture expandable graphite using material from Woxna.
Research was completed in
Germany
with leading consultancy ProGraphite GmbH. ProGraphite used run-of-mine +80 mesh
(>180 micron) material from the Woxna mine to test a range of standard process variables. Testing demonstrated that
expansion in line with commercial graphite products can be achieved with a combination of sulphuric acid and potassium
permanganate. The methods tested did not require the use of toxic chromium, lead, or bromine-bearing chemicals that are
used in the manufacture of some Chinese expandable graphite.
Expandable natural graphite is a critical industrial material, with a significant and growing market. Current market size is
estimated to be 70,000 to 80,000 tonnes per year, with approximately 45% of demand coming from manufacture of fire-
resistant materials. Other market segments include flexible foils, conductivity additives, and a small volume as a graphene
manufacturing pre-cursor.
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, with an eye to
identifying other opportunities. 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 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. During 2018 and 2019, LEM Romania completed various
prospecting, sampling and geological mapping across an area of 25.5 sq km (2,550 ha) pertaining to the Bihor Sud
Prospecting Permit in central western Romania. Results from the Bihor Sud Prospecting Permit were considered
encouraging, and consequently LEM Romania submitted a request that the Romanian Mining Inspectorate ("Agenția Națională
pentru Resurse Minerale") publish an Exploration License tender across the prospective areas. Publication of the request for
tenders for the Bihor Sud Exploration License occurred during
August 2019
and a tender document is now being prepared.
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.
Leading Edge Materials' 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 an Exploration License while reapplication for a Mining Lease remains in progress. During
August 2019
, an application to extend the Exploration License for an additional 3 years was submitted to the Bergsstaten.
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. During the reporting period,
a summary of the Natura2000 assessment was submitted to the Länsstyrelsen for review and public comment. Responses
are awaited.
The Bergby lithium project is located in central
Sweden
, 25km north of the town of Gävle. Bergby has been tested by a total
of 33 drill holes to a maximum depth of
131.1m
over an approximate
1500m
strike length. Mineralization drilled to date lies
very close to surface and extends from the outcrop beneath thin glacial soil cover. Intersections often include elevated levels
of tantalum.
Leading Edge Materials, through its Swedish subsidiary Woxna Graphite AB, is a project member of the EIT Rawmaterials'
LiRef project. The project is validating two conversion processes with the target to develop one robust and flexible process
transforming spodumene concentrate into battery grade lithium chemical. It aims to foster the development of a sustainable
European value chain. The partners include four mining companies (Savannah Resources, Leading Edge, Keliber and
Europena Lithium) as well as Aurora Lithium AB, Outotec, FLSmidth, GTK and Luleå University of Technology.
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
July 31,
2019
$
April 30,
2019
$
January 31,
2019
$
October 31,
2018
$
July 31,
2018
$
April 30,
2018
$
January 31,
2018
$
October 31,
2017
$
Operations
Expenses
(561,771)
(571,749)
(850,681)
(1,151,305)
(697,426)
(665,364)
(1,976,066)
(843,952)
Other items
27,101
46,864
1,602
39,448
(7,721)
32,508
39,641
75,938
Comprehensive loss
(534,670)
(524,885)
(849,079)
(1,111,857)
(705,147)
(632,856)
(1,936,425)
(768,014)
Basic and diluted loss per share
(0.01)
(0.01)
(0.01)
(0.01)
(0.01)
(0.01)
(0.02)
(0.00)
Financial Position
Working capital
518,129
929,183
1,438,895
960,707
1,369,748
2,041,550
2,698,150
3,490,760
Total assets
34,088,219
35,359,241
35,766,406
35,075,446
36,132,517
36,139,745
36,902,593
37,915,728
Total non-current liabilities
(7,876,382)
(8,637,726)
(8,515,027)
(8,306,212)
(8,902,310)
(8,157,203)
(8,204,190)
(8,330,321)
Results of Operations
Three Months Ended
July 31, 2019
Compared to Three Months Ended
April 30, 2019
During the three months ended
July 31, 2019
(the "Q3") the Company reported a net loss of
$534,670
compared to a net
loss of
$524,885
for the prior three months ended
April 30, 2019
(the "Q2"), for a minimal increase in loss of
$9,785
. During
Q3 the Company recognized
$126,000
share based compensation compared to
$23,100
in Q2 due to increases in share
option grants. The increase was primarily offset by a general reduction in expense and foreign exchange gains recorded in
Q3.
Financial Condition / Capital Resources
During the 2019 period the Company recorded a net loss of
$1,908,634
and, as at
July 31, 2019
, the Company had an
accumulated deficit of
$28,962,958
and working capital of
$518,129
. 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. The Company anticipates that it will require additional capital to meet anticipated levels of corporate
administration and overheads for the ensuing twelve months, to recommence operations at the Woxna Graphite Mine and/or
modernize the plant to produce value added production. The Company is conducting a strategic review which may result in
direct funding of Woxna Graphite AB. There are no assurances that the Company will be successful in obtaining funding. 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
Leading Edge Materials' internal Strategic Review during highlighted the opportunity for direct funding for the Woxna graphite
mine, while progressing other exploration activities. 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 nine months ended
July 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
.
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
September 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-SEP-19