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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SOURCE Leading Edge Materials