Leading Edge Materials Reports Quarterly Results to
Leading Edge Materials Reports Quarterly Results to
January 31st, 2020
VANCOUVER
,
March 26, 2020
/CNW/ -
Leading Edge Materials Corp.
("
Leading Edge Materials
" or the "
Company
") (
TSXV:
LEM
) (
Nasdaq First North: LEMSE
) (
OTCQB: LEMIF
) announces first quarter results for the period ending
January 31
, 2020.
All references to dollar amounts in this release are in Canadian dollars.
Leading Edge Materials activities during the reporting period were in line with the Board's strategic roadmap to benefit from the
electrification of transport and the manufacturing of lithium ion batteries in Europe. The Company owns the Woxna graphite mine
in
Sweden
, with a view to readying the site for the supply of battery anode materials. Elsewhere in
Europe
, the Company is
undertaking exploration for rare earth elements, lithium and cobalt.
The European Commission has forecast 400 GWh of annual battery demand in
Europe
by 2025, with a market value exceeding
€400 billion. In late 2019 the European Commission's Vice President for the Energy Union Maroš Šefčovič expressed the urgency
for a secure, transparent and integrated European battery materials supply chain that combines domestic mined materials,
recycled materials and imports.
During the reporting period, the unprecedented and tragic human and financial challenges related to the COVID-19 virus were
beginning to be revealed, first in
China
and rapidly the rest of the world. The impact of COVID-19 on the battery, automotive and
mining industry remains unclear, however, it is believed to be a significantly negative event that will alter future forecasts.
Corporate progress was moderated during the period as the Company sought to secure project level funding for the Woxna
graphite mine. Access to project level funding was unsuccessful, and therefore Leading Edge Materials completed a private
placement financing of 18,000,00 units at
$0.056
per unit for gross proceeds of
$1,008,000
at the end of December 2019. The
Company has continued to seek project level financing opportunities and will communicate developments should they progress.
Leading Edge Materials continues to hold the Woxna graphite on a production ready basis and includes full time staff to ensure all
permit conditions are met. Woxna site activity has been directed towards review of optimization opportunities for the current flake
graphite process flowsheet and for the proposed purification and spheronisation demonstration plant.
The Bergby lithium project in
Sweden
was progressed utilizing funding from EIT Raw Materials under the LiRef project as
reported in February 2020. Research indicated that in a bulk sample with a grade of 1.21% Li
2
O, 90% of lithium is contained
within spodumene or petalite, minerals that are widely used for lithium chemical production today. Leading Edge Materials
continues to work with Swedish permitting authorities with regard to the Mining Lease application for the Norra Kärr heavy rare
earth element project.
As reported in
October 2019
, Leading Edge Materials submitted an application to the permitting authority Agenţia Natională
pentru Resurse Minerale ("NAMR") for an exploration license in
Romania
under a competitive tender process covering the Bihor
Sud project. The Company was notified that one other application was received under the competitive tender. The tender is
adjudicated on the basis of technical and financial merit.
During
January 2020
Leading Edge Materials was advised that the other applicant lodged an appeal to the
Bucharest
Court of
Appeal against NAMR. The appeal seeks to cancel the outcome of the tender process for the Bihor Sud Exploration License
before a winner is declared. Adjudication of the tender has been suspended until the appeal by the other applicant has been
definitively resolved. A first hearing took place on
February 28, 2020
without resolution. Further hearing dates are anticipated to
be substantially impacted by the COVID-19 virus.
Selected Financial Data
The following selected financial information is derived from the audited consolidated financial statements of the Company
prepared in accordance with IFRS.
Fiscal 2020
Fiscal 2019
Fiscal 2018
Three Months Ended
January 31,
2020
$
October 31,
2019
$
July 31,
2019
$
April 30,
2019
$
January 31,
2019
$
October 31,
2018
$
July 31,
2018
$
April 30,
2018
$
Operations
Expenses
(375,930)
(409,297)
(561,771)
(571,749)
(850,681)
(1,151,305)
(697,426)
(665,364)
Other items
(31,374)
(8,799,476)
27,101
46,864
1,602
39,448
(7,721)
32,508
Comprehensive loss
(407,304)
(9,208,773)
(534,670)
(524,885)
(849,079)
(1,111,857)
(705,147)
(632,856)
Basic and diluted loss per share
(0.00)
(0.09)
(0.01)
(0.01)
(0.01)
(0.01)
(0.01)
(0.01)
Financial Position
Working capital
711,727
132,551
518,129
929,183
1,438,895
960,707
1,369,748
2,041,550
Total assets
24,803,562
24,825,107
34,088,219
35,359,241
35,766,406
35,075,446
36,132,517
36,139,745
Total non-current liabilities
(7,154,761)
(7,701,324)
(7,876,382)
(8,637,726)
(8,515,027)
(8,306,212)
(8,902,310)
(8,157,203)
Financial Condition / Capital Resources
During the three months ended
January 31, 2020
the Company recorded a net loss of
$407,304
compared to a net loss of
$9,208,773
for the prior three months ended
October 31
, 2019. The decrease in net loss was primarily attributed to the
impairment of the Woxna project in the preceding period. As at
January 31
st
2020, the Company had working capital of
$711,727
.
The Company is maintaining its Woxna Graphite Mine on a "production-ready" basis to minimize costs. The Company anticipates
that it does not have sufficient funding to meet anticipated levels of corporate administration and overheads for the ensuing twelve
months and it will need additional capital to provide working capital and recommence operations at the Woxna Graphite Mine
and/or modernize the plant to produce value added production, to fund future development of the Norra Kärr Property and
complete the tendering process and, if successful, exploration activities in Romania. 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
During
December 2019
the Company completed a private placement financing of 18,000,000 units for gross proceeds of
$1,008,000
.
Summary and Outlook
Work undertaken by Leading Edge Materials during the quarter ended 31
st
January 2020
has been in line with the outcomes of
the internal strategic review completed in May 2019. Despite weak investor sentiment in resource markets, Leading Edge
Materials successfully completed a modest financing during the quarter, and progressed activities on a number of projects.
It is anticipated that the short- and medium-term outlook for Leading Edge Materials industry shall be heavily impacted by the
COVID-19 virus. The Company's immediate focus is on the health and safety of employees and contractors. The Board remains
very optimistic as to the longer-term strength of the European battery and electric vehicle industries and the important role played
by current and prospective raw material suppliers like Leading Edge Materials.
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 condensed consolidated interim financial statements for the three months ended
January 31, 2020
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
March 26, 2020
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 26-MAR-20