Part of the Stock Digest group of websites: Visit Tech Stock Digest  

Leading Edge Materials (TSX-V: LEM) CEO Blair Way on Excellent Graphite Battery Test Results

April 7, 2017

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 for joining me this afternoon.

Blair Way: Hi Gerardo, it's great to catch up.

Gerardo Del Real: I wanted to catch up. I know it's been a couple of weeks and you've actually been in Europe and I wanted to get an update there, but you also had some pretty important news. The headline reads, "Leading Edge Materials provides update on high purity battery graphite qualification." And as we've discussed before, Leading Edge Materials is the only company with a permitted facility and with the stockpile to actually be able to get through the qualification process, so I wanted to speak to you and hope that you can touch on how that's coming along.

Blair Way: For sure. We're really happy to get this news out and as I've suggested in previous discussions, that this is a process that we go through where we work through larger and larger quantities of material. This round of test work is working with almost five kilograms of material. We've made the anode material, we've then made the actual 18650 cells and we work through testing these cells. There's still more results to come but these first results were too good to sit on or to hold until we did one big press release. We're seeing all the numbers that we want to see. The reversible capacity is increasing as we get better and better at this material and refinement. The other things like first cycle efficiency and certainly the most satisfying was our purity. We've almost got our purity up to 100%.

Now, that's a huge number and it's also something that we believe will help us in our endeavors to demonstrate that natural graphite can be used as an alternative to synthetic graphite in the future. There's still work to do there but this is the type of thing that we're demonstrating through these tests. We hope certainly to be able to demonstrate the ability to exchange some of the synthetic graphite for natural. But over time, my long-term goal is that we'll see more and more natural graphite used instead of the synthetic, which is both a cost and environmental benefit to these battery cell manufacturers.

Gerardo Del Real: Absolutely, and you touched on a little bit of the answer to my next question which is can you please explain why it's so important, why the high purity is so important for the types of markets that you're looking to reach in the future?

Blair Way: It's a good question, Gerardo, and there's a lot of confusion in the space, because graphite is produced at different levels of purity. There's the moderate or modest purity of about 99.9 or even 99.95, and that sort of material is used currently in consumer electronics, but if you use that grade of material in automotive grade batteries, it just isn't going to cut the mustard. We have not focused on our raw material on the consumer electronics batteries, the likes with phones and computers and portable grills and what have you. We're focusing on the automotive batteries, that's where we see the big demand coming up.

We also see that as not only just a market that's created by the demand in more batteries required for more automobiles getting made, but also they're not exclusively, but almost exclusively synthetic graphite at present, and the opportunity for us to displace that synthetic graphite with what we'll call an ultra or extra high purity material for these automotive grade batteries. We're seeing, as I said, we've seen some great results from our thermal purification which is something that is not done in China currently. They use chemical leaching to purify their material which is in use for these consumer electronics.

Thermally treating natural flake graphite is a similar process to the way synthetic is made, albeit less energy intensive because it doesn't need to be graphitized and also used in a facility that has green energy rather than coal fired energy. There's a much greener footprint.

Gerardo Del Real: Excellent, excellent. Now, to that point, there's been big news out of Europe and particularly possibly Sweden. I know that there's been talk about a possible European Gigafactory. Can you touch on that a bit?

Blair Way: Oh, for sure. We just spent the last two weeks in Europe and there is an actual fact, it is in the works shall we say, is in the order about 10 Gigaplants, be it Daimler or Samsung, LG, Tesla, Volkswagen Group, Jaguar, Land Rover, BMW, Nissan, Renault. There's a stack of them in the works. Whether they all come to fruition is another question but we are certainly focusing on Europe and the discussions that we're having with investors there, as well as potential customers, has been very, very positive, and we just continue to work those. There is a timeline in this, that many of these, obviously these facilities aren't built yet, so we do need to align our production to meet up with the demand.

It's no point getting in production tomorrow, shall we say, and then the market or the customers aren't buying graphite for another year or two. There is that alignment with this future market, but certainly this last trip to Europe was very satisfying.

Gerardo Del Real: Excellent, excellent. Well, Blair, I want to thank you very much for your time. Is there anything else that you'd like to add? Observations from your recent time in Europe, the reception that you've gotten?

Blair Way: No, probably nothing other than summing up the story that we've been telling. The reception that we've received is simply tied to the fact that we have the only production ready graphite facility in the European market that's really ready or low capital cost to actually start producing the high purity battery grade materials for automotive battery cell manufacturers, and being located in Sweden, with this facility, just puts us right on the doorstep of these emerging markets. And of course, we've had the exploration upside of this mix of lithium, cobalt, and rare earth which can further benefit those relationships in the future.

Graphite is obviously our flagship, and the fact that we can not only produce to a reasonable standard now of volume with our current license, but we have the opportunity to expand in our graphite that we've identified in the ground permits that as well. We have a number of ticks in the boxes to accommodate this emerging market, and that's really what has been so positive in these discussions I've had over the last few weeks in Europe.

Gerardo Del Real: Well that's exciting. You mentioned the possibly of maybe 10 Gigafactories, and if even one of those is in Sweden, and we know that obviously there's a lot of behind the scenes chatter as to that, I've got to imagine that Leading Edge Materials is going to be at the front of the line to have a seat at the table there.

Blair Way: Well, as the only source of graphite other than China right now, as you can well imagine we are in a pretty healthy spot.

Gerardo Del Real: Fantastic. Blair, thank you so much for your time and hopefully we can have you back on soon as we get further developments.

Blair Way: Thanks, Gerardo. Always great to catch up.

View Interview Archive

Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.

MARKET SUMMARY

INDICES

Name Last Change
DOW 26115.70 1.24%
S&P 500 2802.56 0.93%
NASDAQ 7298.28 1.02%
TSX 16326.70 0.17%
TSX-V 884.96 0.00%

Resource Commodities

Name Last Change
Gold 1337.80 0.86%
Silver 17.03 0.23%
Copper 3.20
Platinum 1001.00 0.10%
Oil 63.73 0.89%
Natural Gas 3.13 2.27%
Uranium 24.25 N/A
Zinc 1.55 0.00%

@RSDigest ON TWITTER

Part of the Stock Digest family of websites
Small Cap Stock Digest