Leading Edge Materials (TSX-V: LEM) CEO Blair Way on Latest Strong Drill Results at Bergby Lithium Project, Woxna High Purity Graphite’s Suitability for Lithium Ion Batteries, & the Pending NASDAQ First North Exchange Listing

November 30, 2017

Gerardo Del Real: This Gerardo Del Real with Resource Stock Digest. Joining me today is President and CEO of Leading Edge Materials (TSX-V: LEM)(OTC: LEMIF), Mr. Blair Way. Blair, how are you this afternoon?

Blair Way: Hey, Gerardo. It's great to talk to you again, all is going good.

Gerardo Del Real: Well it's been a minute since we caught up and provided an update. I thought it was important you and I had a chance to conversate in San Francisco for the Silver and Gold Summit. We joked that at the Silver and Gold Summit cryptocurrencies and uranium and critical metals really took up the bulk of the speculator and investor attention there at the conference, but I wanted to touch base because you have a lot going on. You recently intersected the thickest interval at your Bergby project, the lithium project in Sweden. That's important. You have a lot going on behind the scenes, most of which you can't discuss as far as your high purity graphite goes and the flagship Woxna, and I wanted to get an update with you and just kind of see how things are coming along.

Blair Way: Absolutely, and as you say there's lots going on in the background, but there's also some great news upfront and certainly our latest release on the Bergby lithium project is something we're pretty proud of, and hitting 19.5 meters of 1.12% lithium oxide is a great outcome, and this property is proving up to be quite an interesting, interesting property with quite a bit of extensions. People can look at the map that we provided with the press release and you can see there's some meterage in there. We still have to do some work on there to demonstrate the extent of that meterage, but as the results for the second drill program come through we're optimistic that we'll continue to see some good results. But it's a great project so far, and as we've talked before, it's just come together very quickly. This is our second modest drill program and we're seeing some great results.

Gerardo Del Real: Well you're off to an excellent start, and I think it's important to note that a lot of that mineralization, or all of it frankly, starting near surface. We're talking from 21 meters, from 15 meters, from 57 meters. I think that's an important takeaway.

Blair Way: For sure, always finding mineralization at shallow depths is a bonus and a plus, and certainly as we've mentioned before, this location is fantastic. It's just near a town called Gävle in central Sweden, but it's near major infrastructure, road, rails, power. In fact the power line is running adjacent to the property, where we can use the power line for access which has made our drill program easier. So it's been sort of a perfect, perfect package to date and as I said, we're optimistic of the future of the project and we'll probably advance into the next steps now that we have enough material to work with. We'll do some early stage metallurgical work and we'll be talking about that in the first, second quarter of next year. But yeah, we've still got a few more drill results yet to come, so there'll be another press release yet.

Gerardo Del Real: And that was going to be my next question, I know that you have assays pending. Do you anticipate having those before the end of the year?

Blair Way: Absolutely. They're very close, they're very close now. Once it starts flowing, there's always a lag between the drilling and the flow of results, but as you can imagine, as you drill you submit your materials to the lab and then it starts trickling out at the same rate as you put it in. So we should be getting some press release out on this very soon.

Gerardo Del Real: Now you mentioned that you've tested the system now in phase one and then you're going to get ready for a phase two of drilling. I want to highlight that you've now drilled a total, I believe and correct me if I'm mistaken on any of this, Blair, but it's been 33 drill holes to a maximum depth of approximately 131 meters, and I think the strike line's something like 1,500 meters, is all that correct?

Blair Way: Yeah, that's correct. As I mentioned before, there's some great numbers on the project as far as the work that we've done. This second drill program has given us some of that sort of step out information that we needed. There's still lots more drilling to do obviously to turn it into a proper resource assuming we can, and then of course there's the metallurgical testing that needs to be done, but for lithium projects in Europe this is turning out to be quite a decent project and we are optimistic and hopeful that we will continue to see the success that we have to date and following on from that, and there will be lots more to talk about.

But I guess, we were talking before, it's amazing or frustrating, we put out some great news on our project and we seem to see a few people selling on the good news, so I guess we'll take that as an endorsement of sorts but it would be nice to see things going the other way.

Gerardo Del Real: I'll be honest with you, Blair. I think a lot of speculators and investors in this space aren't very patient, and I can tell you that although I know that behind the scenes Volkswagen and BMW, and they've publicly stated this, they are in Europe, they're in Sweden, and they're seeking sources for these critical metals that they're going to need for their electric vehicle ambitions, right? How much can you speak to their presence in Europe and in Sweden, and what if anything can you say about the high purity graphite that has come from the stockpile that you have and how that may contribute in the future?

Blair Way: I guess the safest way, and investors are probably aware under the regulations, our forward looking statements and what we're allowed to say, what we hope to do, we have to be very careful. But certainly what I can say is we have, as we press released, we've taken our Woxna flotation graphite, we've put it through a number of process enhancements which have taken it from a 94 odd percent up to 100% pure graphite where it's suitable and been used to make both the coin cells and also 18650 cells, and I think I was able to show you some of the 18650 cells I had in my pocket with me at San Francisco. So we've produced batteries, the batteries have been tested by a number of different parties, and the results are positive, so we're confident about our graphite. We're confident about our process to make the graphite suitable for lithium ion batteries, and of course that qualification process is what any customer in Europe is interested in.

So those are those first steps. The challenge for us of course is what we're allowed to talk about when we start talking about major auto manufacturers and their desires, but certainly from a public point of view when we can talk about this, all the auto manufacturers in Europe, whether it's BMW or Mercedes or the Volkswagen Group, the big three that everyone's familiar with as well as the Volvos and some of the smaller ones, they're all talking about electrification of their fleet and big parts. There's billions of dollars of investment to build new electric platforms in order for these auto manufacturers to step up the challenge, I guess to Tesla, and I don't think there's any stopping it now what is happening. And as a result of all these electric vehicles, batteries are going to be required.

Those batteries or the cells are coming from China currently, and Europe is not happy about that. They need to have some level of independence and ability to control their own destiny, so they are seeking out raw materials. As an example, and again this is public information, Volkswagen Group was out there seeking cobalt from any miners that would be willing to sign long-term, 10 year contracts, and of course no one would be silly enough to sign a 10-year contract at this early stage with the sort of buoyancy we've seen in cobalt and the demand that we see in the future.

And Volkswagen failed in that regard, they didn't lock anyone in thinking I'm the big bad wolf and I can lock someone in. That didn't happen, but it certainly hasn't changed their intent and they, Volkswagen and I think even BMW, has mentioned some press recently about also chasing the raw materials, and we are able to provide some of those raw materials and over time and as we evolve as a company, we are hopeful that these parties will be interested in what we have to offer. But as I said we have to be, I have to be very careful what level of enthusiasm I present when I talk about these manufacturers because to date we haven't got anything that we're publicly allowed to speak about.

Gerardo Del Real: Excellent. Well I think everybody listening is smart enough to read between the lines. Let me switch gears a bit, you recently submitted a preliminary application for a listing on NASDAQ's First North in Stockholm. Can you speak to that a bit, how is that coming along Blair?

Blair Way: Yeah, so we press released that a while back and it is progressing to plan, and when we announced it we were targeting the end of this calendar year, so ideally before Christmas and certainly all indicators are that we'll achieve that. There's been your normal sort of process of putting together company descriptions, lots of paperwork, it's almost the equivalent of doing an IPO at some level or another. It's been a very time consuming process, but we do believe it will yield the results that we expect, which is that there's a strong investor base in Sweden that is exceptionally interested in this space.

And we will be providing these investors with access to the space which they haven't had in the past, and if even the investors, the Swedish investors that we see that are picking up our TSX listed shares, if that's any indication of what we expect to see when we are listed on NASDAQ First North in Stockholm, we're optimistic that it'll just give our company a lot more depth, market depth and therefore interest and exposure to investors that are much clearer on the benefits and the story and also it's a Swedish story, so they like to have sort of in house, being in country is a big plus as well. So all is going to plan and we still expect a listing announcement and ideally ringing the bell before Christmas this year.

Gerardo Del Real: Perfect, perfect. Now you recently announced, I think back in mid-October, that the company was participating in a Swedish government funded research project which was entitled, “The Natural Swedish Graphite for Future Lithium Ion Batteries.” How supportive has the Swedish government been?

Blair Way: Again, this whole Swedish industry, the specialty materials and the green energy and the circular economy, is just ramping up. Just last week I think we spoke about it. Gerardo, there was a government meeting which we will provide more news on in some press releases, but it is public information so it's not, there's no top secret Swedish initiatives going on here, but certainly the Swedish government is very interested in seeing Swedish based organizations or Swedish companies being part of this process. And it's the circular economy of seeing it coming from mine, and obviously it always needs to be talked up but they want to see it right from mine into value adding into production of cells into production of batteries and cars and then recycling all those materials at end of life so they get brought back into that cycle and more is added, and obviously there's always more that needs to be added, and that's certainly in line with our strategy of being able to provide materials that come from the ground but also being part of that circular economy.

And the Swedish government's funding these various projects, and there'll be some press releases coming to update on how those projects are coming or moving along, but the support is just amazing and the level of interest in our sector, in our materials, be it the graphite, lithium, and even cobalt, albeit early stage for us. But we are also seeking out cobalt elsewhere in Europe to be part of that process. It's just incredible. If you compare it to say a year ago or certainly two years ago, there was almost zero interest, and now it's going 1,000 miles an hour and we just don't see it changing other than for the positive in the future. It is actually amazing the level of support and interest that the Swedish government and even large industry has in this space.

Gerardo Del Real: I think a lot of people forget that Leading Edge Materials has two world class rare earth assets, can you speak to those a bit? There's been a lot of buzz around rare earths lately. Anything having to do with critical metals seems to be getting a lot of attention, but I think some speculators and investors have forgotten the quality assets that you have in the portfolio. Can you talk about those a bit, Blair?

Blair Way: For sure. Norra Karr is one of the top five rare earth deposits in the world as far as the discovery and it's pre-feasibility stage. And we acquired that through the acquisition of Tasman Metals last year or late last year, and we acquired it because we believe the project has a huge amount of future potential. Obviously, in the past the rare earth bubble bubbled and then declined, but we're certainly seeing again a lot of attention returning to the rare earth space, and ideally not as euphoric as it was before because a rapid up always means a rapid down in that sort of space.

But we are seeing, and in these critical materials it's not just the battery materials, but it's all the specialty materials such as the rare earths and we're seeing in many cases, the Swedish government is mentioning Norra Karr by name because of its significance. It is considered a significant project in Sweden and we believe over time that will be of benefit to the company and to the future consumers of those materials in Europe because it is a great project, we just need to get it in line with the timing and certainly the timing that we're seeing or the process that we're seeing now is just this uptake of local sourced, environmentally and sustainably sourced material, and we get all the tics in the boxes for the Norra Karr project as well as our Woxna, Bergby, and really many of the others that we feel we can develop in Europe.

But certainly the three key projects are our rare earth, our Woxna graphite, and our Bergby lithium are all lining up to be just those sort of projects and properties that can provide those specialty materials in a sustainable manner and be part of this circular economy that Sweden is striving to form.

Gerardo Del Real: Blair, I want to thank you very much for the thorough update. Is there anything else that you'd like to add?

Blair Way: I appreciate our investors' patience. Even though there's a huge amount of euphoria there is ultimately the process of being part of a new supply chain, and these supply chains do take time and it is frustrating compared to say, a traditional drill program in gold, and it's this process of being part of that and the development of cell manufacturing in Europe is still at a very early stage, but the level of investment that's going on, there are just, to us we are still exceptionally bullish about the future for our industry and for the sector as far as the manufacturing. Especially lithium ion cells and the demand for specialty materials for those cells in Europe supplied by European producers. So yeah, I know at times it's frustrating for investors and I see the share price bouncing around, and that's often a reflection of many things be it needing to make a car payment or maybe tax loss selling or something like that, or they're just losing interest. And I certainly appreciate that our key investors are patient and sticking with us and belief in our story.

Gerardo Del Real: I absolutely anticipate an exciting year in 2018 for Leading Edge, and I think speculators and shareholders that are in the story now or can get, initiate a position and get an entry point at these prices are going to do pretty well for themselves.

Do your own due diligence, go to the website, it's leadingedgematerials.com. Blair, thank you so much.

Blair Way: Thanks Gerardo, it's always great to provide an update and I look forward to speaking again.

Gerardo Del Real: Well we got assays from Bergby coming soon, so hopefully we can have you back on.

Blair Way: Yeah for sure, and hopefully we can talk more about the dual listing and how that's progressing because it's probably going to line up quite nicely for having something to talk about.

Gerardo Del Real: Excellent. Thanks again, Blair.

Blair Way: Thanks, Gerardo.

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