Categories: Base Metals / Energy
Topics: General Base Metals / General Energy

Leading Edge Materials (TSX-V:LEM)(OTC: LEMIF) CEO Filip Kozlowski on Helping Establish A European Critical Metals Supply Chain

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of one of my favorite critical metals plays in the entire space. It's Filip Kozlowski from Leading Edge Materials. Filip, how are you this morning?

Filip Kozlowski: Hi, good morning, Gerardo. Doing good. Thanks.

Gerardo Del Real: You've had a lot of company specific news that I want to get into here briefly, but before that I have to get your take on the overall rare earth space and critical metal space as it relates to Europe. Here in the U.S. we've seen a big push by several companies to expedite establishing a critical metals supply chain, a domestic one, and I know that Europe has had an urgency about it for years on end, but it does seem like it's picking up steam. What's your take, you being there, being involved, having your finger on the pulse, how do you see things playing out there?

Filip Kozlowski: It's very active in Europe as well. We have the monthly meetings within the forum of the European Raw Materials Alliance, discussing all parts of the value chain, how to address the main objectives of the European Raw Materials Alliance. Which is, how do we solve the primary source of raw materials for Europe, for the permanent magnet and rare earth value chains. And the two main topics are regulatory bottlenecks, how do we unlock them and financial bottlenecks, how do we unlock them. So provide the framework to enable new projects to get online, and provide the funding for those, and those discussions are very much ongoing. There's a huge political support for what we discuss and to support solutions that we suggest. So it's just a matter of time before we see things materialize from that.

Gerardo Del Real: Excellent. I mentioned that there is a lot going on company specific wise, your most recent release, the headline was “Leading Edge Materials to Commence Testing of ALD Coatings for Lithium Battery Anode Materials.” That's quite a headline and I know that it was very technical in nature, so I can imagine that for a large part of the audience, it's probably a lot to get into detail wise, but it was a very important release for Leading Edge Materials, and I would love for you to provide some context, because I think it's important work. You and I know that in the rare earth space, and the lithium space and the critical metal space, there's two types of companies, right? There's companies that jump on the bandwagon and ride the trend higher, and then there's companies like Leading Edge that are actually doing real work, that could be very consequential here in the near future. Can you give us just a brief overview of the release and the important points there?

Filip Kozlowski: Yes. It is technical, and it comes down to, are you a company that is looking to produce a precursor material, whether that's in the rare earth space where you want to sell a mineral concentrate or do you want for battery metals manufacture, or graphite anode producer. Do you want to sell the graphite concentrate or how many steps of the downstream are you taking, because for each additional step you take for downstream, it does get more technical, but there's also an exponential curve in terms of the value-add you put into your business.

I think that's what we're looking to do now, where over the last few years, we developed all the... We already have a graphite mine, so that part is more or less solved on our side. And then over the last years, we've developed a downstream processes, how to value-add that material to something that is spherical purified graphite material.

It's very hard to decide on pricing for materials since China controls 100%, but best market intelligence provides pricing which is around $3,000 per tonne, of spherical purified graphite. However, the spherical purified graphite is not an anode material. You'll hear a few companies saying they're an anode producer, but they only really had the strategy for how to produce anode precursor material.

So the last final step, before you can turn the natural graphite material into an anode material, that can actually sit in the battery cell, and work to the standards that are required by the big battery manufacturers, and the big electric vehicle manufacturers, is a coking process. And the coking process enables a few critical characteristics.

So you have this little graphite particle in the battery. You have the lithium ions going in and out of that particle. What happens then, is you actually have some disturbance in that particle, so you want to protect that particle, to keep its pristine shape as long as possible, to work as good as it was working in the beginning. So summarizing that, the coking increases the lifetime of the battery, it increases the performance through being more conductive, and also increases the safety of the material, because you don't have any breakage in the shape of the particle. So that's why it's critical to have that step, to sell an active anode material.

And there's a number of various technologies that are used for this: carbon coating; chemical vapor deposition technologies; and then this more advanced one, which is atomic layer deposition, which is a variant of CVD.

And funnily enough, the AMD technology in its original form, was from what I've heard, developed in Finland, so our neighboring country. But now we've come into contact with this a U.S. based company called Forge Nano. And what they've done very skillfully is take this technology, but find the path of commercializing that technology. So they're not doing anode materials themselves, they're providing the technology, and the IT to add this extra value-added step. And they're well funded, they clearly have some very smart people working there, and the technology that works. Volkswagen invested in them a few years ago, MG Ventures from Korea invested in them. So it's a technology that we've been looking at, and we're very happy that we now have the opportunity to start testing our material with them. And it'll be great to provide some results from that testing when we have it in a few months.

Gerardo Del Real: Speaking of results, you're in the midst of completing two studies, one for Woxna, the graphite project of course. And the second for the Nora Karr rare earth project. How are those studies coming along, Filip?

Filip Kozlowski: Yeah. Those two reports, the first quarter of this year hasn't been nice to anyone in relation to development of the COVID pandemic, and it's taking a bit longer time. That's one side of it. Another side of it is that we find a number of opportunities as we go along, and they're so significant, so we want to incorporate them into the reports.

I think after the last time we spoke, we announced that we're doing the life cycle assessments on the Woxna graphite project, so we're looking to incorporate that carbon footprint. So we're a bit delayed terms of putting more things on, and on the other hand, we've been slightly impacted by the COVID pandemic and people not being able to work as efficiently. So we're in the midst of the final stages and we should have results out within the next month.

Gerardo Del Real: Excellent. Well, I know both of those are major catalyst for the company. It's exciting times in the space, the critical metal space in general, a lot going on. Is there anything else that you'd like to add Filip?

Filip Kozlowski: No, I emphasize what you just said. As a company, we're still in the turnaround phase after having a new board in place last year, myself taking over as the CEO. And these reports are really the foundation of the next steps for the company, both in terms of development, but also in terms of being able to communicate to the investor community. This is the investment case for our Woxna graphite anode project. And this is the investment case for our heavy rare earth project in Sweden, that can supply Europe with many of the rare earths needed for the permanent magnet industry.

So being able to have those reports will shift gear for us, into something where going from an internal phase, to an external phase. Talking with various stakeholders, whether it's the local people living next to the project, being able to demonstrate this is how the project looks like, this is what to expect going forward; national regional level politicians, these are the projects that we have, this is how they look like, this is what they could enable for the European Union and more importantly to the investment community, saying this is the investment opportunity with the projects that we have. So it's transformational, it's taking a lot of time, taking a lot of effort, but super optimistic about rest of the year, with having these reports and the outlined steps for what happen next.

Gerardo Del Real: I'm looking forward to the numbers. I'm looking forward to having you back on. Thank you again, Filip.

Filip Kozlowski: Thanks Gerardo. You take care. Have a nice weekend.

Gerardo Del Real: All right. Chat soon. Stay safe out there.

Filip Kozlowski: Bye-bye.