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 - $67,191) in costs for
operations.
Selected Financial Data
The following selected
financial information is derived from the unaudited condensed
consolidated interim financial statements of the Company prepared
in accordance with IFRS.
|
Fiscal 2023 |
Fiscal 2022 |
Fiscal 2021 |
Three Months Ended |
July 31, 2023$ |
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 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 concerns6 and may be seen in
differentiated pricing7. 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.
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:info@leadingedgematerials.com
www.leadingedgematerials.com
Follow usTwitter:
https://twitter.com/LeadingEdgeMtlsLinkedin:
https://www.linkedin.com/company/leading-edge-materials-corp/
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 CA@mangold.se 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 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.
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-watch4
https://www.economist.com/finance-and-economics/2023/09/11/how-to-avoid-a-green-metals-crunch5
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-769638098
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.html10
https://energydigital.com/articles/neo-produces-specialised-magnets-for-clean-energy-tech
- 2023-09-20 LEM 2023Q3 press release
- FinacialreportQ3
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