The Newly-Formed Leading Edge Materials (TSX-V: LEM) Is a One-Stop-Shop in the Critical Metals Space
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is CEO president and director of the newly formed Leading Edge Materials (TSX-V: LEM), Blair Way. Mr. Way has over 25 years of management experiences within the resources and construction industry throughout Australasia, Canada, the United States, and Europe. Leading Edge Materials was formed in August 2016 via the merger of Tasman Metals with Flinders Resources. The company has significant critical metals assets in Europe. Assets which include the fully permitted 100% owned Woxna Graphite facility. Blair, thank you very much for joining me today.
Blair Way: Thanks for having the time to chat with me, Gerardo.
Gerardo Del Real: Absolutely. Now Blair, we had the pleasure of speaking a few months ago during the quiet period where details of the merger between Tasman and Flinders, now Leading Edge Materials, were still being finalized. That deal has now closed and the result is a company with a very tight share structure and a very experienced team with significant contacts and first mover advantage in Europe. That has allowed the company to bring several important critical metals projects under the Leading Edge banner. Now I'd like to talk about those projects shortly, but before we do, can you share with us a little background about the team that is now in place at Leading Edge Materials?
Blair Way: Certainly. The merging of the two companies have brought together a team ... build a team, bringing together extensive experience in Europe and North America by taking the knowledge built by the two companies and being able to utilize both the skills from our production and manufacturing graphite, as well as the rare earth's marketing and capabilities that have been brought in from the Tasman merger, so we have a very strong team with a broad skill set across the range of critical materials that's becoming more and more demand in today's challenged market for these type of materials.
Gerardo Del Real: That's great. I think it's the quality of the team, obviously, has allowed for you to bring in several of those important critical metal assets that you now have under the Leading Edge banner, but my understanding is that the focus right now is on developing the 100% owned and fully permitted Woxna Graphite facility in Sweden. For those that aren't familiar with graphite and its importance, would you give us a brief overview on why graphite is so important to the future and what sets Woxna apart from the many graphite projects out there?
Blair Way: Certainly people have probably heard the buzz about graphite, but certainly graphite is becoming more and more critical and important in this transition we're seeing ... or this disruption between the petroleum based mobility and our greener energy storage, lithium ion batteries, and the like that people are seeing and embracing electric vehicles. Graphite is a critical component in these vehicles and graphite currently, almost exclusively, comes from China. We're in a unique position with our Woxna Graphite facility in Sweden, which is fully permitted and operational ready, that we're able to supply into this growing demand. There are battery plants popping up all over the world, especially North America, and Europe.
We are positioning ourselves by qualifying our product, not only for the traditional markets, which was refractory and brakes and pencils that people are familiar with, but now these emerging markets, which is lithium ion batteries and all the various machinations of them from your regular personal mobility such as phones and drills and the like, to the higher tech and higher value added and higher quality materials in the batteries for electric vehicles with 5 and 10 year life expectancies. Woxna Graphite is in a position to supply that graphite now as that market is growing and we're able to become qualified for many of these up and rising battery producers that are now setting up shop outside of China.
Gerardo Del Real: All right. Now, Blair, you mention something very interesting. You mention qualifying your product. The last time that we spoke, we talked a bit about the high purity graphite research advances that you were making. How is that progressing?
Blair Way: It's progressing very well. As always, for a qualification process, you need to work through multiple, or many, steps to get to the customer's confidence that you can not only produce the product, but also produce it consistently and also both quality and can supply. When we last spoke, we were working through producing smaller amounts of high purity spherical graphite for lithium ion batteries. We've gone through first rounds of testing and confirmation and certainly our Woxna Graphite is more than suitable for this market. As we keep advancing through it, we'll continue to keep our investors updated. Obviously there are some confidentiality issues during this qualification process that we need to respect and we will disclose as we're permitted throughout this process. We expect some very exciting news over the coming months as we progress through this qualification process for not just one, but for a number of potential customers who would be targeting this type of material and actually seeking, certainly, an alternative source to the current sole source, which is China. This is customers both in Europe and North America.
Gerardo Del Real: That's exciting. Just generally speaking ... because just out of respect for confidentiality agreements ... but generally speaking, the Teslas of the world and the Panasonics of the world ... This high purity graphite, that is the material that they're seeking, generally speaking. Is that correct? Do I understand that right?
Blair Way: Yes, that's correct. I mean, when we talk about battery grade graphite, even though technically it's all battery grade graphite, there's higher grade material that is for these high end batteries that go into automotive technology whereas the ones most people are familiar are cell phones, your portable drill or other devices, even iPads and the like. Most of the mobility electronics, we call them ... That material is a lower grade material because they're only 2 year batteries. Certainly the material that we're targeting for our facility is the higher-end material because that's the stuff that's really going to become in great demand for automotive manufacturers as they are producing vehicles that will have a green footprint, they need to be able to demonstrate that footprint from cradle to grave. Certainly when the material's exclusively coming from China, there are obvious issues with some of that cradle to grave life cycle.
Gerardo Del Real: Excellent. Now we talked about graphite and Woxna. That is clearly a project that is advancing at a really rapid pace, which of course is the reason that Woxna is the main focus, but Leading Edge has also positioned itself very well in other emerging high value markets. Can you briefly go over some of the other critical raw material assets that could be very important in the future under the right market conditions?
Blair Way: Absolutely. That's a key part of our Leading Edge Materials strategy where we're focused on our flagship asset, which is our graphite production, but at the same time, many of the customers that we're speaking with make inquiries about other commodities, specialty materials, critical materials that we may be able to help them with, and examples of those ... obviously part of the merger was we brought in the rare earths asset Norra Karr from with the merger with Tasman Metals and that's a magnificent asset that has huge potential, but as we find the right market and customers, that has incredible potential to be a value add as well.
We're also working with other critical materials such as cobalt, nickel, lithium, that all fit within this niche, that we say, of specialty materials, which is the strategy of Leading Edge Materials and how we want to become that shop ... that go to shop or go to organization that can provide those solutions for end users to find the materials right from the mine in the ground all the way through the value-add and specialty technology process to where they actually have that value-added material to feed into their production facilities for batteries or other specialty type manufacturing.
Gerardo Del Real: That's very interesting. You know, I've said before that you're positioning yourself to be a one stop shop in the critical metals space. It's exciting. It's exciting to participate at this early a stage. What can shareholders and potential shareholders expect from Leading Edge Materials in the near future?
Blair Way: I think, as I mentioned earlier, that the near future's certainly going to be focused and demonstrating the focus on our graphite and taking our graphite and building a sound business model that our investors will understand, the value-adding to take our product from just a normal refractory type material and value-added to be able to supply the high tech market, the energy storage and the news flow that will follow on from that. Also, as we're growing the company and growing our assets, to demonstrate not only just the graphite flowing in and demonstrating that business model, but additional business models I can add into the already existing infrastructure that we put in place with regards to technology processing, mining, marketing, and relationships established with customers for our flagship graphite project.
Gerardo Del Real: Excellent. Well, Blair, we'll definitely be keeping an eye on how things develop. Is there anything you'd like to add?
Blair Way: No, I think we've covered all the hot spots. The biggest differentiator for us as an organization is the fact that we are a graphite producer. We're not a graphite explorer that has an asset that one day we hope to put into production. This is in production. It is permitted for 10,000 tonnes of production per annum. We are targeting that material to a higher value-add. We're taking it down the technology path ... processing technology path that will enable us to accommodate these myriad of battery cell manufacturing companies that are starting up in both Europe and North America and are very clearly targeting to find alternative sources to the sole source right now, which is China. We believe that is a really exciting position to be in.
Gerardo Del Real: Agreed. I know there's a lot of work going on behind the scenes, Blair, so I want to thank you very much for your time. Hopefully we can have you back on soon.
Blair Way: That sounds great, Gerardo. I'll look forward to telling our story a bit further as we have more and more news to share with our investors and thanks very much for your time.
Gerardo Del Real: Thank you.
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