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Leading Edge Materials (TSX-V: LEM) CEO Blair Way Talks About the Company's Graphite & Cobalt Progress and Ambitions

November 2, 2016

Gerardo Del Real: This is 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, thank you once again for joining me.

Blair Way: Gerardo, it's a pleasure to be talking again.

Gerardo Del Real: Two big pieces of news here over the past week. The first was Leading Edge Materials engaging European lithium ion battery experts. That's a big deal because it's going to provide a lot of strategic advisory services to the companies in the production of lithium ion batteries. I want to start with that. Can you share the details of the group that's involved and the benefit there to shareholders into the company?

Blair Way: Yes, for sure. We've engaged Taranis, which is a group we've identified out of Germany, and we've been working with in the background a little bit, and realize we need to bring them on board just simply because the expertise they bring to our group. It's important that we are working with the right end users and understand the end user's specifications. We need this technical expertise. Taranis is certainly that expertise. They've been working in the lithium-ion battery market long before people even knew what a lithium-ion battery was. They've been working with cell producers, manufacturing battery packs and cells for a myriad of different industries. This is the type of expertise our organization needs in order to carry us from the mine all the way to the cell manufacturer's table, so as to speak.

Gerardo Del Real: That's excellent. Can you speak a little bit to the progress with Woxna and where things are now? I know we touched on it a little bit last week. Can you just kind of tell us what we can expect here in the next month or two in regards to Woxna and the graphite project there?

Blair Way: Certainly. Our graphite project and the way we have to work through the qualification process for the various cell manufacturers, it really is a stepped process. As we work with the cell manufacturers, both in Europe and also identified some in the USA, where we find out and understand their specifications, then be able to confirm that our specification and material that we're able to produce from our identified flow sheet is suited for them. In some cases, it needs to be tweaked. Each specification is slightly different. That's the benefit of having this sort of expertise within our organization because they can help us work with our processing side to ensure that we are meeting those specifications.

Over the coming months, we'll continue to work through the qualification process for various cell manufacturing organizations. We will be able to provide some updates as we go along. It certainly will be a process that is very rigid. We need to ensure that we've manufactured the correct spec. We're going to have to manufacture test cells. As I've mentioned before when we spoke, we have literally tonnes of material sitting in our shed in order to facilitate this sort of test work. It really does give us an edge against many others that are trying to pre-quality or qualify their materials. We're confident that as we progress through this, we'll be able to give investors updates.

Gerardo Del Real: Excellent. That's a key differentiator you have in the stockpile to actually make it through the qualification process. I think that you engaging Taranis is important as well because of the deep network they have in the lithium-ion battery market. You are one of the few, if not the only junior that I see out there that can actually advance through the qualification process and get into the next stage, which of course would be in a perfect world, supply agreements into that market. Correct?

Blair Way: That's correct. It does benefit us greatly to have our shed full of material that we can use for this pre-qualification process. As I mentioned before, having more than a couple kilos of material is essential as we advance down to making a large number of test cells to demonstrate compliance. As everyone's probably more aware with all the news about the Samsung battery issue, is that the testing is extensive. We need to be able to demonstrate so that they can understand that our material doesn't create any unforeseen problems. We all know what those unforeseen problems do.

The qualification process is critical, but you need to have the material. You need to be able to manufacture literally a thousand battery cells and put them through the test program to confirm that they are compliant. Fortunately, we have that material from when we ran the plant for our refractory grade material. We can run that through a purification process. We have literally thousands of kilos of material that we can utilize.

Gerardo Del Real: Excellent. Now the second bit of news released this morning, and this is a big one, I've described Leading Edge Materials as in the long term positioning itself to become a one-stop shop for critical metals, specifically to the European market. I think the news release from this morning speaks to that a bit. You've staked the Vena Cobalt Project, which has historic work ... When I say historic, I understand it's as far back as the 1700 and 1800's. What can you tell us about the cobalt property? What made that attractive?

Blair Way: Absolutely Gerardo, this is one of those projects that we've been aware of. Over time, we've considered whether it has merit. Of course, we've taken a much closer look this time and believe it does have merit. It's again a Scandinavian project. It's 250 killometers west of Stockholm. It's right again in our neighborhood, an area that we're familiar with. It's also located nearby a significant mine and concentrator, one of Sweden's most significant. This property has recently become available so we were able to stake it. As you mentioned, it's definitely historic. It was known for copper and cobalt back in the late 1700's and even up into the late 1800's, when there was a considerable number of workers on site, doing I guess what you would call a manual or so old school style mining technique. Certainly, we are confident that we can do something with the property. It's still very early stages.

We're very excited to be able to actually stake the cobalt property that could well be a suitable replacement for the current production or current sources for cobalt material. This is where our relationship with the end users, they're going to be familiar with our ability to accommodate their needs for graphite. We've identified a lithium Bergby project that we have. That could well be a solution for the lithium needs. This would just be the next stop in the shop. Here's a possible cobalt solution for them as well.

Early days, but we're comfortable with the history that the property has had in the past. It's just a matter of doing some additional work on the ground and understanding how and what we can do with it in the future. We believe again, a big step forward for us as an organization to become that one stop shop.

Gerardo Del Real: Absolutely. I know Woxna and the graphite is definitely the flagship. It's exciting to see the portfolio projects across multiple commodity types that you're building. It's exciting despite the early stage nature of it to see it develop. I think it's going to be something to watch.

Blair Way: For sure. We are confident of what we're doing with our graphite. As I mentioned before, there's clearly a path laid out for that, but having these other commodities on board and a Scandinavian source, it gives us that opportunity to provide end users when and if they make that call that they need to find or identify a sustainable source of these other commodities. We are in a good position to be able to head down that track whether that's JVing or partnering with possibly the end users or otherwise. No question, there's still a ton of work to do. That's the nature of the game that we're in. Identifying these commodities in a location that could potentially be a sustainable supply, I think is a step in the right direction.

Gerardo Del Real: Excellent. I'm looking forward to having you back on as we get more news, Blair. Thank you so much for your time. Hopefully, we have you back on soon.

Blair Way: Thanks, Gerardo. It's great to chat again.

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