Leading Edge Materials Reports Quarterly Results to July 31, 2023
NEWS RELEASE September 20, 2023
LEADING EDGE MATERIALS CORP.
14th Floor – 1040 West Georgia Street, Vancouver, BC, V6E 4H1
[email protected] | www.leadingedgematerials.com
TSX.V: LEM | Nasdaq First North: LEMSE | OTCQB: LEMIF | FRA: 7FL
TSX.V: LEM | Nasdaq First North: LEMSE | OTCQB: LEMIF
LEADING EDGE MATERIALS REPORTS QUARTERLY RESULTS TO JULY 31, 2023
Vancouver, September 20, 2023 – Leading Edge Materials Corp. (“Leading Edge Materials” or the “Company”) (TSXV:
LEM) (Nasdaq First North: LEMSE) (OTCQB: LEMIF) (FRA: 7FL) third quarter results for the period ending July 31, 2023. All
references to dollar amounts in this release are in Canadian dollars.
Highlights During and After the Quarter
During the three months ended July 31, 2023:
• On June 1, 2023, the Company announced in-situ assay results at over 30% Nickel and 4.7% Cobalt at Bihor Sud.
Additionally, surface trench assay results indicate a zone of Pb-Zn-Ag mineralisation.
Subsequent to July 31, 2023:
• On August 23, 2023, company announced the closing of the non-brokered private placement financing. Pursuant
to the Private Placement, the Company has issued 21,739,130 units at a price of C$0.115 per unit for aggregate
gross proceeds of C$2,500,000.
Results of Operations
Three Months Ended July 31, 2023, Compared to Three Months Ended April 30, 2023
During the three months ended July 31,2023 (“Q3 2023”) the Company reported a net loss of $322,392 compared to a reported
net loss of $1,235,603 for the three months ended April 30,2023 (“Q2 2023”), an decrease in loss by $913,211 the decrease
in loss mainly due to share-based compensation related to granting of stock options under the Company’s stock option plan
of $710,563 in Q2 2023 compared to share-based compensation of $Nil in Q3 2023.
Three Months Ended July 31, 2023, Compared to Three Months Ended July 31, 2022
During the three months ended July 31,2023 (“2023 period”), the Company reported a net loss of $322,392 compared to a net
loss of $609,709 for the three months ended July 31,2022 (“2022 period”), an decrease in loss of $287,317, the decrease in
loss mainly due to mark to market gain of $34,065 (2022 period loss -$126,036) and Directors and officer's compensation of
$46,270 (2022 period - $97,482).
Specific expenses of note during three months ended July 31,2023 are as follows:
(i) incurred $46,270 (2022 - $97,482) for directors and officer’s compensation.
(ii) incurred $48,829 (2022 - $67,500) for listing and regulatory fees with respect to ongoing fees for the Company’s
listing of its common shares on the TSXV, Nasdaq First North and OTC exchanges.
(iii) incurred a total of $37,998 (2022 - $29,915) for accounting and audit out of which the Company incurred $14,390
(2022 - $11,827) for accounting services of SKS Business Services along with $7,677 (2022 - $7,373) for bookkeeping
and accounting services for subsidiary companies provided by other independent accountants;
(iv) incurred research, development and general exploration expense of $10,200 (2022 - $26,240);
(v) incurred $34,716 (2022 - $67,191) in costs for operations.
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.
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Fiscal 2023 Fiscal 2022 Fiscal 2021
Three Months
Ended
July 31,
2023
$
April 30,
2023
$
January 31,
2023
$
October 31,
2022
$
July 31,
2022
$
April 30,
2022
$
January 31,
2022
$
October 31,
2021
$
Operations
Expenses (313,950) (1,048,182) (570,549) (425,075) (419,050) (433,894) (1,874,407) (583,391)
Other items (8,442) (187,421) (66,586) 308,721 (190,659) (356,226) (219,942) 28,466
Comprehensive
profit/(loss)
(322,392)
(1,235,603)
(637,135)
(116,354)
(609,709)
(790,120)
(2,094,349)
(554,925)
Basic Profit/(loss)
per share (0.00) (0.01) (0.00) (0.00) (0.00) (0.01) (0.01) (0.00)
Diluted
profit/(loss) per
share
(0.00) (0.01) (0.00) (0.00) (0.00) (0.01) (0.01) (0.00)
Financial
Position
Working capital 848,952 1,344,044 2,124,643 1,365,657 1,686,095 2,396,484 3,236,870 2,350,166
Total assets 23,584,544 24,181,654 24,845,430 23,832,418 24,827,062 25,000,847 30,597,341 28,756,406
Total non-current
liabilities (5,109,575) (5,404,808) (5,556,603) (5,292,618) (6,159,922) (6,045,964) (10,812,012) (9,946,686)
Financial Condition / Capital Resources
During the three months ended July 31, 2023, the Company recorded a net loss of $322,392 as of July 31, 2023, the Company
had an accumulated deficit of $46,909,932 and working capital of $848,952. The Company is maintaining its Woxna Graphite
Mine on a “production-ready” basis to minimize costs and is conducting ongoing research and development to produce higher
value specialty products. The Company is also evaluating a potential restart of production at the Woxna Graphite Mine. The
Company anticipates that it has sufficient funding to meet anticipated levels of corporate administration and overheads for
the ensuing twelve months however, it will need additional capital to provide working capital and recommence operations at
the Woxna Graphite Mine, establish a production facility for the Anode Project, to fund future development of the Norra Karr
Property or to complete 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.
Outlook
As mentioned in our last quarterly update1, there are numerous new political and legislative initiatives to support mining and
processing of critical raw materials in the EU. We are pleased to see the increasing political support focused on these key
themes given their importance, tying together the issues of climate change, resilient supply chains for products needed to
sustain our way of life, decreased dependance on regions which may not share our western values and future jobs. We feel
that our Company has an important role to play in this reality and have projects particularly well positioned to benefit from
these trends.
In addition to the EU Critical Raw Materials Act, which is well in process towards becoming legislation, there are increasing
suggestions2 for various ways the EU could stimulate direct funding of underlying projects in the short to midterm. Again,
reading between the lines, we conclude that there is a definite sense of urgency in Europe (as in the US) to catch up with the
enviable position of players in Asia.
As reported, the Company did a recent private placement raising gross proceeds of CAD 2.5m. More than half of this was
subscribed by insiders, demonstrating continued commitment and conviction in our prospects. The remainder was taken up
by a small number of professional long term sector investors.
Woxna Graphite Mine
In terms of our assets and the underlying materials needed for the green transition, natural graphite remains a particularly
interesting commodity according to many analysts3. This because graphite is a core component in almost all lithium-ion
1 https://leadingedgematerials.com/leading-edge-materials-reports-quarterly-results-to-april-30-2023/
2 https://www.transportenvironment.org/discover/expansion -of-the-eu-innovation-fund-needed-for-battery-supply-chain/
3 https://www.fastmarkets.com/insights/graphite -market-outlook-five-key-factors-to-watch
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chemistries, with extreme dependance on Asian supply chains and importance to help decarbonize battery anodes. Many
analysts predict a six- to sevenfold increase in graphite demand by 20304, amongst the most severe of any commodity.
We maintain our built and permitted Woxna graphite mine and plant on care and maintenance, while monitoring market
signals to consider a restart of graphite concentrate production, as the first step to developing a downstream anode
business. Despite the looming demand-supply deficit graphite prices have remained weak to date this year.5
The attractiveness of owning a built mine once the underlying commodity increases in value can’t be overstated. This is why
we are confident that Woxna will offer us a tremendous opportunity to benefit from the demand-supply imbalance.
Additionally, there are signs that bifurcated markets are developing for battery materials, those from China and those of
Western origins. This stems from both ESG and other concerns 6 and may be seen in differentiated pricing 7. Of course,
Sweden has a great opportunity as a producer, and Woxna a first mover advantage.
Norra Kärr Heavy Rare Earth Project
At our Norra Kärr development project, we are progressing work with a Natura 2000 permit application. As this is done based
on the new 2021 design of this project, we are benefitting from authorities and other stakeholders evaluating the merits of
the project based on recent plans that substantially reduce the potential for environmental risk. In parallel, we have started
working towards a new mining lease application as well as evaluating the most appropriate next stages of feasibility
development.
Quite a bit has been happening recently in the rare earth and permanent magnet space. Prices for the magnet metals have
increased8 because of supply concerns in Asia. We are told that China, being the dominant processor of concentrate and
magnet producer, is actively trying to tie up supply around the world. In particular, it is the heavy rare earths which are a
challenge to secure, with prices squeezing higher9.
Across the Baltic Sea, the Canadian company Neo Performance Materials have broken ground on building a rare earth
permanent magnet factory in Estonia10. This is important as it demonstrates, as we have said, the emergence of new Western
producers of these critical products. Norra Kärr, as one of the largest HREE deposits globally, and the only one in the EU, has
the potential to be a cornerstone supplier to Western magnet producers.
Bihor Sud Nickel-Cobalt Exploration Project
Since having obtained permission to enter our underground galleries in January, this project has been advancing
rapidly. Results are encouraging: in the first target gallery G7 we have encountered visual Co-Ni mineralization over 135
m until a collapsed zone in mineralized rocks which is currently being cleaned out to open another 900 m of gallery. This is
important since it appears that mineralized zone continues beyond the collapsed rocks. Further extensive Co-Ni
mineralization has been identified 50 m above G7 in a cross cut coming from the higher level gallery G4.
As communicated, in situ samples from G7 gallery walls have assayed up to 30% Ni and 4.7% Co while surface trench assay
results indicate a zone of Pb-Zn-Ag mineralization. These results confirm our belief that this is a high prospective exploration
project with potential for both scale and high-grade mineralization.
Line sampling of the Co-Ni-mineralization in G7 and the Pb-Zn-Cu-Ag mineralization in G4 was completed and samples sent
for assaying. Results are expected shortly, and follow-up channel sampling is currently underway.
We are working towards doing a surface drill program on 50-100 m deep geophysical anomalies and to explore the depth
extent of G7 Co-Ni-mineralization, as well as an underground drill program from inside G4 and G7.
4 https://www.economist.com/finance-and-economics/2023/09/11/how-to-avoid-a-green-metals-crunch
5 https://source.benchmarkminerals.com/article/why -battery-material-prices-slumped-under-pressure-in-the-first-half-of-
2023?mc_cid=1c25ba3e5d&mc_eid=33b1527344
6 https://aheadoftheherd.com/import-ban-on-goods-made-with-chinese-slave-labor-extended-to-electric-car-batteries-richard-mills/
7 https://www.spglobal.com/marketintelligence/en/news -insights/latest-news-headlines/north-american-graphite-market-to-disconnect-
from-chinese-prices-76963809
8 https://www.reuters.com/markets/commodities/chinese -rare-earth-prices-hit-20-month-high-myanmar-supply-worry-2023-09-07/
9 http://news.chinatungsten.com/en/component/content/article/14 -tungsten-news-en/tungsten-product-news/158697-tpn-12740.html
10 https://energydigital.com/articles/neo-produces-specialised-magnets-for-clean-energy-tech
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Financial Information
The annual audited consolidated financial statements for the year ending October 31, 2023, is expected to be published on
or about January 24, 2024.
The Company also announces that in connection with the recently private placement closed on August 23, 2023, the Company
issued 7,000 finder’s warrants (the “Warrants”) to an arm’s length third party as a finder fee on a portion of the private
placement. Each Warrant will entitle the holder to purchase one Common Share (a “Warrant Share”) at a price of C$0.225 per
Warrant Share until the date which is two (2) years from the closing date of the Private Placement (the “Closing Date”).
On behalf of the Board of Directors,
Leading Edge Materials Corp.
Eric Krafft, Interim CEO
For further information, please contact the Company at:
www.leadingedgematerials.com
Follow us
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About Leading Edge Materials
Leading Edge Materials is a Canadian public company focused on developing a portfolio of critical raw material projects
located in the European Union. Critical raw materials are determined as such by the European Union based on their
economic importance and supply risk. They are directly linked to high growth technologies such as batteries for
electromobility and energy storage and permanent magnets for electric motors and wind power that underpin the clean
energy transition towards climate neutrality. The portfolio of projects includes the 100% owned Woxna Graphite mine
(Sweden), Norra Karr HREE project (Sweden) and the 51% owned Bihor Sud Nickel Cobalt exploration alliance (Romania).
Additional Information
The Company’s unaudited consolidated financial statements for the nine months ended July 31, 2023 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.sedarplus.ca
The information was submitted for publication through the agency of the contact person set out above, on September 20,
2023, at 12:30 pm Vancouver time.
Leading Edge Materials is listed on the TSXV under the symbol “LEM”, OTCQB under the symbol “LEMIF” 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 [email protected] or by phone +46 (0) 8 5030 1550.
Reader Advisory
Certain information in this news release may constitute forward-looking statements or forward-looking information within the
meaning of applicable Canadian securities laws (collectively, “Forward-Looking Statements”). All statements, other than statements
of historical fact, addressing activities, events or developments that the Company believes, expects or anticipates will or may occur
in the future are Forward-Looking Statements. Forward-Looking Statements are often, but not always, identified by the use of words
such as “seek,” “anticipate,” “believe,” “plan,” “estimate,” “expect,” and “intend” and statements that an event or result “may,” “will,”
“can,” “should,” “could,” or “might” occur or be achieved and other similar expressions. Forward-Looking Statements are based upon
the opinions and expectations of the Company based on information currently available to the Company. Forward-Looking
Statements are subject to a number of factors, risks and uncertainties that may cause the actual results of the Company to differ
materially from those discussed in the Forward-Looking Statements including, among other things, the Company has yet to generate
a profit from its activities; there can be no guarantee that the estimates of quantities or qualities of minerals disclosed in the
Company’s public record will be economically recoverable; uncertainties relating to the availability and costs of financing needed in
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the future; competition with other companies within the mining industry; the success of the Company is largely dependent upon the
performance of its directors and officers and the Company’s ability to attract and train key personnel; changes in world metal
markets and equity markets beyond the Company’s control; the possibility of write-downs and impairments; the risks associated with
uninsurable risks arising during the course of exploration; development and production; the risks associated with changes in the
mining regulatory regime governing the Company; the risks associated with tenure to the Norra Karr property; the risks associated
with the various environmental regulations the Company is subject to; rehabilitation and restitution costs; the Woxna project has
never defined a mineral reserve or a feasibility study and the associated increased risk of technical and economic failure in case of
restarting production; risks relating to the preliminary and non-binding nature of the MOU with Sicona. On June 9, 2021, Leading
Edge announced the results of an independent preliminary economic assessment for the development of Woxna (the "2021 Woxna
PEA"), the full details of which are included in a technical report entitled "NI 43-101 Technical Report – Woxna Graphite" prepared
for Woxna Graphite AB with effective date June 9, 2021 and issue date July 23, 2021, available on Leading Edge's website
www.leadingedgematerials.com and under its SEDAR profile www.sedar.ca. The 2021 Woxna PEA is preliminary in nature, it includes
inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them
that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment
will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. On July 22, 2021,
Leading Edge announced the results of an independent preliminary economic assessment for the development of Norra Karr (the
"2021 Norra Karr PEA"), the full details of which are included in a technical report titled “PRELIMINARY ECONOMIC ASSESSMENT OF
NORRA KARR RARE EARTH DEPOSIT AND POTENTIAL BY-PRODUCTS, SWEDEN" prepared for Leading Edge Materials Corp. with effective
date August 18, 2021 and issue date August 19, 2021, available on Leading Edge's website www.leadingedgematerials.com and under
its SEDAR profile www.sedar.ca. The 2021 Norra Karr PEA is preliminary in nature, it includes inferred mineral resources that are
considered too speculative geologically to have the economic considerations applied to them that would enable them to be
categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized. Mineral
resources that are not mineral reserves do not have demonstrated economic viability.