Categories: Energy
Topics: General Energy

Leading Edge Materials (TSX-V: LEM) CEO Blair Way on Joint Venture with Graphmatech to Develop Graphene Production

Oct. 9, 2018

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

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

Gerardo Del Real: I'm excellent. Yourself?

Blair Way: Oh, just great. In Sweden it’s cooling down a bit and some of the fall colors are starting to arrive.

Gerardo Del Real: I just got back from that part of the world. It was a productive trip. The share price has been under pressure with Leading Edge for the last several months. It's largely due to a sell recommendation from a very influential newsletter writer. Despite that – and this is why I wanted to do the update again, Blair – despite that you've been very busy on the ground. The latest of which showed up in the form of a letter of intent with Graphmatech to develop graphene production, a joint venture in Sweden where you're at now.

I want to start just by briefly addressing fundamentally if there's anything wrong with the company, or if this sell-off is largely due to that sell recommendation. We know that if it's that, that tends to correct itself over the course of time if the company continues to execute, which I believe you're in Sweden doing exactly that. Correct, Blair?

Blair Way: Absolutely. It has been business as usual. The share price has been under pressure, but we have continued to be achieving the progress that we’ve targeted for us, and that's customer engagement. This press release we put out on the Graphmatech LOI is an example of that. And we've spoken many times about the work that I'm able to do on customer engagement. And it takes quite a bit of time to develop those relationships and get to a point where we can actually talk about it.

Obviously, there are other discussions under way, and when we're permitted and able to, we will be able to tell more about what's going on. We have been providing updates on technical progress, because we have also made some great technical progress on our spheronising, on our purification. These are all tasks that we've had laid out in front of us. It really is business as usual and the fundamentals are as good and getting better than it has been prior to this pressure that we've been feeling on the share price.

Gerardo Del Real: I know it's been frustrating for shareholders because I speak and communicate with them quite often. It's been frustrating for you as well I know, privately, to not be able to disclose just how much progress is being made behind the scenes. All things that will come out in due time, I'm sure, but I know there's legalities behind it.

I do want to talk about today's news and what this means, because this is something you actually can talk about, and something, again, that's been many, many, many months in the works. Can we talk about this joint venture in Sweden and what it means?

Blair Way: For sure. Graphmatech is a company that is taking graphene and turning it into commercially relevant products. We've touched on it a few times, talking about graphene and some of its future applications. What we like about Graphmatech and why we see the opportunity to work together is the fact that they're also producing products for real customers.

What this gives us is a link between our graphite that we mine out of the ground, we talk about value-adding processes to make a battery material for battery customers. Well, this is a value-adding process to make graphene for graphene customers.

So Graphmatech needs a reliable consistent source of graphene for their business model, and the opportunity of course to work together to provide that is a strong one. We're certainly very excited to work through this process to develop this JV.

Gerardo Del Real: Fantastic. And of course a large part of why you're able to send this joint venture is the fact that Woxna is one of the few fully built and permitted graphite mines in all of Europe, frankly. Correct?

Blair Way: That is correct. And we have, as we've mentioned before, we've run the plant for some time. We have quite a stockpile of material, and certainly for the quantities of graphene initially we don't actually have to run the plant proper. We have materials that we can work with as part of that joint venture, and define the materials and processes so that we can grow with Graphmatech.

As their demand increase, we can work with them and provide a source of materials, and that saves them having to shop around all over the world to find different sources of graphene and the risks that they would face with different supplies of graphene, may have different characteristics and that can impact on their process. So for us to be their supplier of graphene material for their processes, and provide a Swedish source, a consistent source of material, just makes sense. And as I mentioned, a consistent source of material just makes sense.

Their products are commercially relevant, and that's very important. It's fine for someone to say, "Yeah, we want a few hundred grams of graphene a year." Well, this is not the case, this is something much more commercially significant than that. And that's why we see this relationship being a significant one for us and one that we look forward to developing into this venture.

Gerardo Del Real: In a perfect world I've got to imagine that when a company like this steps up and does a joint venture, that can potentially lead to new potential clients. Right?

Blair Way: For sure. And the people that they're working with, they've got some very significant financial backing, and the opportunities that can grow from that, and just the fact that we have the Woxna graphite mine and we have reserve capacity. So it does open the door or certainly open the intent for other potential customers to see that we are a viable source of materials for their business.

Gerardo Del Real: Fantastic. Blair, anything else you can share as far as progress? You're in Sweden, the Northvolt project is very busy behind the scenes, hoping to secure financing. Can we talk a bit about that aspect of your development there, as it relates to Northvolt? Leading Edge, of course, being a part of the project there, and some significant opportunities in the future I imagine.

Blair Way: Certainly Northvolt seems to be making some great progress. We always work, or are keen to be part of that process, and we'll be able to provide updates on that as that progresses. But certainly we continue to progress things on a technical front, which is critical for us in order to be able to continue the discussions with various customers like Northvolt and others, certainly specifically for battery materials, and we will be able to provide some updates as we keep moving down through the spheronising and purification process.

We have been press releasing some of that over the past few months, and there will be more to follow. Certainly then that links or connects us with what we've spoken about in the past, to produce larger quantities of materials for samples for these customers. That can lead us into more specific or clear relationships with them.

But it really is a complex process as we work through the specific material specifications for each customer, and making sure that the materials that we produce meet those specifications. It is a time-consuming and complex process, but we are making progress through the steps that we have to go through.

Gerardo Del Real: Fantastic. Blair, thank you very much for the update. It's much appreciated.

Blair Way: It's always great to catch up, Gerardo. We've got quite a bit on the move now. We can certainly catch up for another update just to keep everyone informed of how things are going.

Gerardo Del Real: Momentum is good, let's hope it translates into a higher share price. Thank you again, Blair.

Blair Way: Thanks, Gerardo.