Leading Edge Materials' (TSX-V: LEM) CEO Blair Way Provides Update on High Purity Battery Graphite Qualification for End Battery Users
Gerardo: 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 once again.
Blair: Hi, Gerardo. It's good to be speaking again.
Gerardo: Well, I wanted to have you back on because we had some news this morning. The headline reads, "Leading Edge Materials provides update on high purity battery graphite qualification." Can you share the details of the update and where things are going?
Blair: Sure. We've spoken many times before about this qualification process and the many steps that we have to go through in order to satisfy the strict requirements of the lithium ion battery cell manufacturers. This is really just an update, an opportunity to share with investors as we get specific information that we can speak of and let them know how we're working through the process. The results are good. We're seeing surface area, tap density, reversible capacity all well right on target which is what these end users want to see.
The particle size distribution is in a way of demonstration of efficiency and achieving a decent yield for our spheronizing process. These are all things that we're working on in order to ensure that not only can we supply the material but we also optimize the utilization of our flotation concentrate into the purification process.
Gerardo: Excellent. Now, Leading Edge Materials, you're a little bit ahead of the curve because the average junior in the space in order to be successful would have to have a facility to be able to have a commercial graphite flotation concentrate. Is that correct?
Blair: For sure. It's easy for people to lump all the graphite companies together but the rules apply to everybody and the steps that you have to go through in order to be a graphite producer is first, you got drill holes in the ground and make a discovery. You need to work through the various studies until you have a feasibility study, and that gives you the opportunity to permit and then do procurement, detail design and ultimately, construction commissioning and running just of either your basic flotation but also included in that will be the definition of your spheronizing, your purification. There are a number of steps that have to be worked through and they're big steps. There are some big CAPEX involved.
We've got a number of ticks in the boxes down that step and halfway and we certainly have, as we mentioned before, we have the mine. We have a permitted production facility and mine. We're able to produce a flotation concentrate license up to just in excess of 10,000 tons per annum. That flotation concentrate then can be fed into spheronizing and purification, which is the area where we're working right now which is part of our qualification process just to demonstrate that those value-adding processes are suited for the end users.
We still need to get ticks on those boxes but that's really what this press release is about. It's demonstrating how we are getting those ticks and we'll continue to work through and keep investors informed as we achieve those milestones.
Gerardo: I think that's definitely a key differentiator and a heck of a head start. Stepping back a little bit, Blair, and just speaking generally what steps would a junior have to take from this point on assuming that every junior had the facility and that every junior was as far along as you were. What would be next as far as checking boxes off for what would be considered a future catalyst or a successful next step in progressing through this process?
Blair: It certainly is the qualification process. Every junior will have to do it on their product and ultimately, that will culminate in some sort of agreement or relationship or contract with an end user cell manufacturer to be able demonstrate that they have a customer because ultimately producing is one thing, selling is the goal. There will be customers out there. There are some now and there are some forecasts for many more. Every junior competing or working in this space will need to secure those sort of contracts or relationships with end users to ensure they can sell the material that they're producing and ensure that the material they are producing is sellable and qualifies for those various end users.
Gerardo: Now, again, just generally speaking, Blair, would an end user and obviously, you have relationships with lots of people and there's lots of people in the industry that are looking to check those boxes off that you mentioned, but would the average end user entertain an off-take agreement or a supply agreement or even have any relationship that may lead to a production agreement without having the size and scale and the facility that can provide the size and scale that they're looking for?
Blair: Highly unlikely based on our experience and discussions. You need ultimately the qualification processes ends with certainly hundreds of kilograms of material that's provided as a working test samples that these end users will incorporate into their process to ensure that it works. In order to meet that specific milestone, you need to be able to produce meaningful amounts, hundreds of kilograms of materials which without a flotation production facility is going to be pretty tough.
Gerardo: Excellent. Now, I know that Woxna and the graphite is obviously the flagship and where the bulk of the attention goes, but you also have an important lithium project, the Bergby Lithium Project in Sweden and I know that it's anticipated that there may be some drilling in Q1 or early Q2 of this year. Is that still on track?
Blair: Correct. We press released that not that long ago but yeah, we're good. All things are on track and we have the ... It's somewhat reliant obviously on the regulators and normal expectations are that we'll be certainly drilling late ... Certainly in this first half of 2017 and the sooner we get the permit, the sooner we'll get started. The weather is not going to be an issue in the area that we're drilling. Unless there is an enormous snowstorm or something like that, it would be only a few days delay or something like that. All things are certainly on track for that work program.
Gerardo: Excellent. Well, Blair, what can shareholders and potential shareholders expect from Leading Edge Materials here the rest of the year, the rest of 2017?
Blair: I think 2017 is going to be a busy year. I have to be careful about my forward-looking statements on these broad-brush things but there's a number of opportunities that are out there and as our company grows and we expand our capabilities in graphite, lithium, and other type of materials as we explore and what have you there. There's opportunities for many, many different relationships, I guess, we'll call them with other commodities, even other companies to JV a project and any type of activity as well as just continuing to grow our graphite business and ideally have much more to talk about with regards to our high purity graphite for the lithium ion battery market.
Gerardo: Excellent. Blair, I want to thank you very much for your time. Thank you for coming on today and hopefully, we can have you back on again as you continue to check boxes off this list.
Blair: Sounds great, Gerardo. It always great to have a catch-up and tell you a little bit more about how we're doing.
Gerardo: Thank you, Blair.