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Leading Edge Materials Corp: THE INVESTMENT CASE

Leading Edge Materials looking today to supply the materials of tomorrow

The firm aims to supply emerging materials for the 'generation, storage and preservation' of low carbon energy.
Leading Edge Materials looking today to supply the materials of tomorrow
INVESTMENT OVERVIEW: LEM The Big Picture
The Woxna mine in Sweden is on prodction-ready status

Despite optimism in many quarters, graphite prices failed to turn a  corner in 2016 but there may be an upswing in 2017 - not least due to the burgeoning growth in lithium-ion batteries.

Paradoxically, these contain more graphite than they do lithium and are essential in modern smart phones and of course electric vehicles, but also energy storage equipment such as solar panels.

The battery sector already accounts for one third of flake graphite demand so there is good potential for a price rises in the sector.

Tesla (NASDAQ:TSLA), the big name in electric vehicles, for example is building a giga-factory in the Nevada desert and  plans to manufacture 35GWh of batteries a year, which could require at least 50,000 tpy (tons per year) of graphite.

Leading Edge Materials Corp (CVE:LEM), which is focused on the Scandinavian region,  describes itself as focusing on supplying emerging materials and metals for the 'generation, storage and preservation' of low carbon energy.

The group was formed in August last year via the merger of Tasman Metals with Flinders Resources.

As well as its Woxna graphite site, the merger gave the new-look group 100% of the Norra Kärr rare earth element (REE) deposit in southern Sweden.

This is one of the world’s main heavy rare earth resources, with an unusual enrichment in the most critical of these speciality metals -  dysprosium (Dy), terbium (Tb) and yttrium (Y).

The firm says Norra has the capacity to supply all of Europe’s heavy rare earth requirements for more than 20 years.

Don't forget Woxna..

Leading Edge says its also the only western producer of natural flake graphite with a fully constructed, permitted and producing plant (100,000-tonne-per-annum feed producing 10,000 tons of over 90%  graphite concentrate).

The Woxna plant was on care and maintenance when the firm bought it in 2011 and operations restarted in 2015 using freshly mined material but falling prices for flake graphite and a downturn in the sector meant operations stopped.

The plant is now on what's called a production-ready basis while higher value graphite products are developed and will not restart until market conditions improves

The mine has a measured and indicated resource of 7.7mln tonnes at 9.3% graphite and recently the firm extended its exploitation licence for 25 years.

Developing high purity

The recent focus has been on developing a high purity graphite from the plant, and optimisng the whole production process so the lithium-ion battery market can be served.

At the same time, it is working with what will be potential end users to make sure the products will meet specifications required.

On January 25 this year, Blair Way, Leading Edge's chief executive, revealed positive progress: "Our recent flowsheet development work has successfully produced high purity spheroidal graphite samples with electrical properties that are on target for use in lithium ion batteries.

"Qualification for lithium ion battery use requires a substantial amount of both test data and product, and with our research partners the company has made substantial progress in both regards."

The work involves samples passing through tests and analysis to identify key characteristics such as graphitic carbon content, tap density, BET surface area, particle size distribution and reversible capacity.

Lithium potential with Bergby

In October last year, the firm's geologists also discovered its first lithium project called  Bergby.

Fifteen samples taken from three outcrop areas returned lithium oxide averaging 1.71% and ranging from 0.01% to 4.6%.

Way said then: "We have been actively searching for lithium projects for some time, and are very pleased to have discovered a prospect with the potential of Bergby very close to our Woxna graphite mine. 

"This project sits well within our strategy of acquiring low holding cost assets while we advance our graphite business model to supply the lithium Ion battery market."

The firm has applied to drill up to 40 diamond holes to test the extent of the lithium pegmatite. It is expected to be completed during the first half of 2017.

The site is close to infrastructure, with major roads, rail and power supply passing immediately adjacent to the claim boundaries.

So, investors can expect to ear plenty of news from the firm over coming months.



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