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Leading Edge Materials (TSX-V: LEM) CEO Blair Way on More High-Grade Drill Results at Bergby and Utilizing Woxna Project Graphite in Graphene Aeronautic Composite Technology

June 14, 2017

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

Blair Way: Good, Gerardo. How are you doing?

Gerardo Del Real: I'm doing fantastic, thank you so much for asking. You've been pretty busy, you continue to hit near surface, high-grade lithium at the Bergby Project in Sweden. Again, behind the scenes, I know you've been very, very busy working on several different fronts. Can we start by talking about the results at Bergby, because they're pretty impressive.

Blair Way: Bergby is certainly something we're pretty proud of. It's been a very early stage project that we've quickly advanced into brief field work and now into a drill program. The results that we've recently published, some of the drilling programs, certainly show why we're so happy with it. We've seen up to 2.63 lithium oxide in one of the drill holes. Every drill hole we've hit decent numbers for lithium oxide and even tantalum oxide as well. We are very happy with the results we've seen, and we have one more round of the last three drill holes to report. Then we'll be able to talk a bit more about what we feel the next steps will be for this property. Yes, it's been fantastic results. As I said, to drill 15 holes and tag decent numbers of lithium oxide on each hole is a nice outcome.

Gerardo Del Real: The numbers look great. I mean, one of the assays is at 8.8 meters, at 2.63% lithium oxide from 1.1 meters depth. That's pretty impressive. What's the plan moving forward? I know we're waiting on assays. Once you get those assays and kind of regroup, what's the plan moving forward Blair?

Blair Way: Well as you mentioned, the last 3-hole assay data is just coming in now, and there's lots of checking back with the boards. Because as I think people will realize in the last press release, the lab actually went back and retested the first five holes and found that some of their equipment had under read, which was not such a bad outcome for us. We were not overly impressed with the fact they had to give us a re-calc on it because we actually noticed some areas that didn't come up with the numbers we expected. We queried them on it, they went back and retested it.

We'll do a wrap up of the whole 15-hole drill program, and maybe even be able to talk a little bit about what we think is happening underground. As you mentioned, it's shallow, we think we have a better understanding of the structure, and obviously the next natural step with this property would be to do some step out drilling and just understand further abroad from this very targeted drill program that we've done, to better understand its configuration on a larger scale. That's something we'll be talking about down the path over the summer.

Gerardo Del Real: Excellent, well obviously excellent news on the lithium front. The flagship is the Woxna Graphite Project in Sweden, and you recently had news, you're partnering up in a graphene project using Woxna Graphite. Can we talk about that a bit?

Blair Way: Yeah. We've been working with graphene for many years, really, and we haven't necessarily tooted our horn about it, quite as much as others because we still are very commercially driven, and we see this as R&D. As I've mentioned, I think a number of times, either in interviews or even discussions with investors, graphene is an amazing, futuristic technology material. Now, graphite is obviously used for graphene. Graphene is really just one molecule thick graphite. In a way, graphite is just really thick graphene.

Having said that, the applications for graphite and graphene in commercial applications is still very early stage. What we liked about this project that we're undertaking with VINNOVA, is it’s actually using graphene or very skinny graphite, if you want to call it that. It's obviously a graphene composite, so it's using these properties of graphite or graphene in competent materials so it could be used for actual specialty equipment right inside the engines which help both in lightweighting but also give it a longer term, or a longer life, and higher temperature. It has a number of ticks in the boxes for this sort of industry. Basically we're talking rocket ships and jet planes. They all need to be light, they need to be fuel efficient, which lightness is a big part of. They need to last for as long as possible and have lowest maintenance requirements. The concept of using the unique characteristics of graphene in composite technology is certainly very interesting to us.

I think the other thing that's noteworthy is that current composite technology, people are used to their graphite tennis racquets, and graphite in their cars, and the black hash material that shows up in fingerprinting everything we see nowadays. That actually is a composite and that is made from synthetic graphite. Synthetic graphite is used, well, exclusively in these sort of carbon fiber composite. Natural flake graphite is not being used and this is really, again, another one of these seemingly obvious substitutions where naturals like graphite purified or value added in the right manner can become a lower cost, greener substitute, for this sort of, known to be nasty synthetic material.

This project with VINNOVA is something we've been working on in the background. We are working on many other projects, and we've chatted before the interview, it's kind of funny that we're working away like demons in the background, and we can't talk about it until now it's over, and we can talk about it. People go, "Oh, that's interesting." Then move on to the next press release. The amount of work that goes on in the background, behind the scenes in order to get to this stage. When we put press releases out we try to capture the depth of the story for people, and I think certainly that press release does, and we hope people are as excited as we are by the prospects. It really is developing a new product line, and therefore a new customer.

That helps us make our business more viable. We're still obviously focused on battery materials for the lithium-ion battery market, the update for electromagnesium in vehicles, and stationary energy storage. When we do produce a battery grade material, there are by products in graphite that we also want to find markets for. This is an example of one of those areas, it's finer material. That finer material could then be a value added in a manner that would be suitable for this kind of specialty composite. Keep in mind it's still R&D and there's lots of work in order to demonstrate that. This is what this business is about, is finding new markets for our graphite. Then as an example, graphene and there'll be similar type projects over the coming months and years that we'll be working on to demonstrate further markets for our specialty materials.

Gerardo Del Real: Excellent. As much as you could tell me Blair, what's going on behind the scenes with the high purity battery graphite qualification process? What can you share?

Blair Way: Well, we've released the most recent press release on our high purity, where we've done the 18650 cells and those, as I've mentioned before, are the standard format used by Panasonic for the Tesla electric vehicles that we're all very familiar with. That was a big step for us and we are in the process of mapping and working through the next spec. Of course we can't really, well we're not really able to talk that much about it until we have some results. There will be some results coming, and I think, and again this is the type of thing that we get pretty excited about, and hopefully the market will as well. We are advancing down the path that we have to go in order to demonstrate that our materials that come out of our plant, through our value adding process, provides a sustainable supply of specialty graphite materials for this amazing market that's coming.

These customers, or potential customers that we're speaking to are not yet producing the batteries. They are definitely sourcing their raw materials and making sure that all these sort of things are in place. When they do start up their battery cell manufacturing facility, they have that sustainable resource. We have to work with them because each battery cell manufacturer has a different recipe, special mix. It's like Kentucky Fried Chicken version of batteries. They all have their specialty mix and we need to make sure that we can demonstrate that our materials can be used in their special recipe. That really is a process that we're working through month by month as we progress through here. As we do, we provide these, I guess I'll call them snippets of updates, that readers that have been following the story for some time will understand how it's an incremental step to get to the end game of selling our raw materials to these large manufacturers, cell manufacturers.

Gerardo Del Real: Well I know it's been a lot of hard work behind the scenes, Blair. And hopefully we can have you back on soon, as you're able to speak more openly about the progress that's being made.

Blair Way: Oh, for sure. I mean, I enjoy being able to talk to you, Gerardo. As I've mentioned, often investors reach out because I do appreciate their patience and also their frustration sometimes. Because it's not like your traditional drill hole program. Bergby is great because that does follow that same sort of path and people will understand that. It's still obviously Bergby's very early stage and with the flagship, our graphite and Woxna, we are making it as good a progress, but it's not as easy to articulate. From the investors that do reach out I'm quite happy to help them better understand. There is a lot more, that there's more and more information out there.

There actually is some really great data out there. We can, I think send you the story, but it's recently done. It's basically taken apart, taken to pieces a Chevy Bolt, and it was done by UBS and it is riveting reading if you're into batteries and electric cars. Because they've broken it down to every nut and bolt and what the differences are between and EV and a combustion engine vehicle. You can just see companies as large as UBS are putting as much effort into it. You can see that things are definitely happening. We believe we are an important part of this transition or change to electrification of vehicles and stationary storage.

Gerardo Del Real: Well, I read that report and it was pretty compelling. I mean I think the demand for copper and lithium and graphite and cobalt, it's going to be pretty interesting here the next of couple years. I think people that are at the front of the line, such as Leading Edge Materials, companies that are at the front of the line. Patient shareholders are going to be rewarded and hopefully you keep marching on forward there, Blair. I want to have you back on, hopefully in a couple of weeks, as you get the new assays for the Bergby project. Hopefully we can talk about the next step there.

Blair Way: Absolutely, I look forward to giving regular updates and talking more, and we will have some press flow over the coming weeks. I look forward to speaking about that further at the time.

Gerardo Del Real: Excellent. In the meantime I encourage everybody to go to the website, it's LeadingEdgeMaterials.com. A lot of really good information there about the many projects that Leading Edge is working on. Blair, thank you so much for your time, hopefully we'll chat soon.

Blair Way: Thanks, Gerardo. Always great to have a chat.

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