VANCOUVER, Jan. 21, 2020 /CNW/ - Leading Edge
Materials Corp. ("Leading Edge Materials" or
the "Company") (TSXV: LEM) (Nasdaq First
North: LEMSE) (OTCQB: LEMIF) announces results for the
fiscal year ending October 31, 2019.
All references to dollar amounts in this release are in Canadian
dollars.
Leading Edge Materials management annually assesses impairment
with respect to the carrying value of the Company's property, plant
and equipment. Leading Edge Materials management determined that
impairment indicators as defined in IAS 36 were present for the
Woxna Graphite Mine, and an impairment test was performed. The
Company has applied a value in use method that takes into account
the Company's financial position, results of operations,
operational issues and other factors in determining an estimated
recoverable amount. This method indicated that an impairment
provision of $8,800,000 was
appropriate in fiscal 2019 for the carrying value of the Woxna
graphite mine and Kringelgruvan mining lease.
Mark Saxon, Interim President and
CEO, stated: "2019 was a challenging year for public mining
industry markets. Despite this, the very positive developments in
the lithium ion battery and EV markets in Europe provides confidence that Leading Edge
Materials is placed within a very attractive sector.
The Woxna Graphite Mine is held on a production-ready basis
as the research and customer qualification is completed for
value-add materials. Although an accounting impairment was
declared on the Woxna Mine for the year, since the construction of
the mine over $30m has been invested
in the site and these past investments provide a strategic
advantage towards the goal of launching higher-value
production."
Highlights
During the past financial year, the Company achieved a number of
milestones including:
- Completion of an engineering study to design and support the
safe and effective installation of a battery graphite demonstration
plant on the Woxna mine site. The demonstration plant is designed
to purify and spheronise approximately 100kg of graphite anode per
day;
- Approval to operate the demonstration plant at the Woxna Mine
site was received from the local permitting authority
(Länsstyrelsen);
- Successful test work on the manufacturing of expandable
graphite using large flake material from the Woxna Graphite Mine
which produced results in line with existing commercial
products;
- Ongoing permitting activities including preparation for a
Natura2000 assessment for a Mining Lease application at the Norra
Kärr rare earth element project. Renewed customer and investor
interest in secure access to rare earth elements has been
witnessed;
- Completion of early stage exploration activity on the Bihor Sud
Prospecting Permit in Romania, and
application through competitive tender for an Exploration
License;
In addition, the Company completed an internal strategic review
to consider the structural and corporate setting of Leading Edge
Materials. The outcomes of the strategic review continue to guide
Company management.
Selected Financial Data
The following selected financial information is derived from the
audited consolidated financial statements of the Company prepared
in accordance with IFRS.
|
Year Ended October
31,
|
|
October
31,
2019
$
|
October
31,
2018
$
|
October
31,
2017
$
|
Operations
|
|
|
|
Expenses
|
(2,393,498)
|
(4,493,336)
|
(2,772,709)
|
Other
items
|
(8,723,909)
|
107,051
|
(147,319)
|
Net loss
|
(11,117,407)
|
(4,386,285)
|
(2,920,028)
|
Basic and diluted
loss per share
|
(0.12)
|
(0.05)
|
(0.03)
|
Dividends per
share
|
Nil
|
Nil
|
Nil
|
Balance
Sheet
|
|
|
|
Working
capital
|
132,551
|
960,707
|
3,490,760
|
Total
assets
|
24,825,107
|
35,075,446
|
37,915,728
|
Total non-current
liabilities
|
(7,701,324)
|
(8,306,212)
|
(8,330,321)
|
Financial Condition / Capital Resources
During fiscal 2019 the Company recorded a net loss of
$11,117,407 and, as at October 31, 2019, the Company had an accumulated
deficit of $38,171,731 and
working capital of $132,551.
Subsequent to October 31, 2019 the
Company completed a private placement financing of 18,000,000 units
for gross proceeds of $1,008,000.
The Company maintains the 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, it anticipates that it will need additional capital
to maintain current levels of research and development, recommence
operations at the Woxna Graphite Mine and/or upgrade the plant to
produce value added production. 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
No financings were undertaken during fiscal 2019.
Summary and Outlook
Work undertaken by Leading Edge Materials during fiscal 2019 has
been in line with the outcomes of the internal strategic review
completed in May 2019. The Company
remains focused on the future supply of raw materials to a rapidly
growing European lithium ion battery and EV market. Key elements of
the Company's ongoing investment strategy include: high value
product development work on the Woxna graphite mine in particular
battery anode material; increasing community engagement and
technical knowledge at the Norra Kärr rare earth element project;
and advancing discovery opportunities in cobalt, nickel and base
metals in Romania, subject to
granting of an Exploration License at Bihor Sud.
At the Woxna graphite production facility, 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. Laboratory based work to date has
produced battery-ready anode materials that meet the
electrochemical specifications of battery cell manufacturers.
Larger scale test work using an on site demonstration plant is
proposed to optimize a purification flow sheet and definition of
equipment requirements to produce battery grade materials and other
salable by-products.
In Romania, Leading Edge
Materials operates a local branch company ("LEM Romania") of which it is the majority
shareholder with the right to earn a 90% interest. During 2019, LEM
Romania completed early stage exploration activity on the 25.5 sq
km (2,550 ha) Bihor Sud Prospecting Permit. On the basis of
positive results LEM Romania elected to submit an Exploration
License application in a competitive tender process.
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 consolidated financial statements for the year
ended October 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.
This information is inside information that Leading Edge
Materials Corp. (publ). is obliged to make public pursuant to the
EU Market Abuse Regulation. The information was submitted for
publication through the agency of the contact person set out below,
at 21 January, 2020 at 6:15 PM Vancouver time.
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 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
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