LEM Leading Edge Materials Corp

VANCOUVER, BC, June 24, 2020 /CNW/ - Leading Edge Materials Corp. ("Leading Edge Materials" or the "Company") (TSXV: LEM) (Nasdaq First North: LEMSE) (OTCQB: LEMIF) announces second quarter results for the period ending April 30, 2020. All references to dollar amounts in this release are in Canadian dollars.

Three Months Ended April 30, 2020 Compared to Three Months Ended January 31, 2020
During the three months ended April 30, 2020 ("Q2") the Company reported a net loss of $317,422 compared to a net loss of $407,304 for the three months ended January 31, 2020 ("Q1"), a decrease in loss of $89,882 primarily attributed to a foreign exchange gain of $5,324 in Q2 compared to a foreign exchange loss of $36,519 in Q1 and a decrease in general administrative expenses from $375,930 in Q1 to $337,609 during Q2.

Six Months Ended April 30, 2020 Compared to Six Months Ended April 30, 2019
During the six months ended April 30, 2020 (the "2020 period") the Company reported a net loss of $724,726, compared to a net loss of $1,373,964 for the six months ended April 30, 2019 (the "2019 period"), a decrease in loss of $649,238. The decrease in loss is primarily attributed to a $708,891 decrease in expenses, from $1,422,430 during the 2019 period to $713,539 during the 2020 period partially offset by cost recoveries of $35,873 recorded in the 2019 period.

Highlights during the quarter
The Company is maintaining its Woxna Graphite Mine on a "production-ready" basis to minimize costs and to ensure all permit conditions are met. Ongoing development has been directed towards test work focused on the possible production and modification of high purity graphite using thermal purification technologies for emerging high growth high value markets, one such example being anode materials for the lithium-ion battery industry. Other potential high-value end-markets being investigated are purified micronized graphite for metallurgical and electroconductive additives and purified large flake graphite as a precursor for the production of expandable graphite suitable as a feed for graphite foils and fuel cell bipolar plates.

During the quarter, the Company announced promising results from the completion of a comprehensive mineralogical and mineral liberation study on lithium-tantalum mineralized drill core from the 100% owned Bergby lithium project in central Sweden. The work was undertaken by Outotec Oyj at their Pori Research Centre in Finland and funded by EIT Raw Materials under the LiRef project. The Company has identified potential for further exploration of the project and are investigating the next appropriate steps.

Highlights after the quarter
In May 2020 the Company announced changes to the Board of Directors and senior Management. Mr. Michael Hudson, Mr. Mark Saxon and Mr. Filip Kozlowski resigned as Directors and Mr. Lars-Eric Johansson, Mr. Daniel Major and Mr. Eric Krafft were appointed as new Directors. Concurrently, a change in senior Management was announced with the appointment of Mr. Filip Kozlowski as Chief Executive Officer ("CEO"). Mr. Kozlowski replaced Mr. Mark Saxon, former Interim CEO and President.

In the beginning of June, the Company received confirmation from the Mining Inspectorate of Sweden ("Bergsstaten") that the Norra Karr nr 1 exploration license has been extended for 5 years to August 31, 2024.

The tender process for the Bihor Sud exploration license in Romania is continuing to be on hold while an ongoing appeals process between a competing bidder and the Romanian permitting authority is being processed by the courts. The Company has been informed that a hearing in the case was held on June 19, 2020, upon where the case was adjourned to a next hearing set for July 17, 2020.

Outlook
The Company's projects are linked to disruptive high growth industrial applications such as electromobility, renewable energy and energy storage that underpin the transition to a sustainable society. The COVID-19 crisis has left no industry unaffected and in the near-term forecasts for the growth of for example electric vehicle sales have been lowered. At the same time announced and planned lithium-ion battery production capacity in Europe is incrementally growing. Further on, as a response to the crisis policy action is increasingly directed towards supporting the industries that contribute to a transition to a more sustainable society, and at the same time the European Union and the US are accelerating measures to reduce reliance on third countries such as China for the supply of critical raw materials.

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.

Financial Condition / Capital Resources
During the 2020 period the Company recorded a net loss of $724,726 and, as at April 30, 2020, the Company had an accumulated deficit of $38,896,457 and working capital of $399,883. 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. See also "COVID-19".

COVID-19
Recently, there was a global outbreak of a novel coronavirus identified as "COVID-19". On March 11, 2020 the World Health Organization ("WHO") declared a global pandemic. In order to combat the spread of COVID-19 governments worldwide have enacted emergency measures including travel bans, legally enforced or self-imposed quarantine periods, social distancing and business and organization closures. These measures have caused material disruptions to businesses, governments and other organizations resulting in an economic slowdown and increased volatility in national and global equity and commodity markets. The Company has implemented safety and physical distancing procedures, including working from home where possible and ceased all travel, as recommended by the various governments. The Company will continue to monitor the impact of the COVID-19 outbreak, the duration and impact which is unknown at this time, as is the efficacy of any intervention. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company and its operations in future periods.

Qualified Person
The qualified person for the Company's project, Mr. Mark Saxon, B.Sc. Hons (Geology), a Fellow of the Australasian Institute of Mining and Metallurgy, technical adviser to the Company, has reviewed and verified the contents of this document. 

Financial Information
The report for the third quarter ending July 31, 2020 is expected to be published on or about September 25, 2020.

On behalf of the Board of Directors,
Leading Edge Materials Corp.

Filip Kozlowski, CEO

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 lithium-ion batteries and permanent magnets for electric motors and wind power that underpin the sustainability transition of society. The portfolio of projects includes the 100% owned Woxna Graphite mine (Sweden), Norra Kärr HREE project (Sweden), Bergby lithium project (Sweden) and the 51% owned Bihor Sud Nickel Cobalt exploration alliance (Romania).

Additional Information

The Company's unaudited condensed consolidated interim financial statements for the three months ended April 30, 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

The information was submitted for publication through the agency of the contact person set out above, on June 24, 2020 at 2:30 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

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