Leading Edge Materials Corp. (Leading Edge Materials) has announced completion of the internal corporate strategic review (the Strategic Review) announced 7 January 2019, and updated 4 March 2019. The review was led by company Chairman Michael Hudson and Filip Kozlowski, an independent director.
Following the recommendation of the Strategic Review, the Board has resolved to initiate the transition of its Swedish subsidiary Woxna Graphite AB into a freestanding company. It is expected that the freestanding structure will enable Woxna Graphite AB to execute more effectively upon a high value graphite materials business plan by undertaking strategic financings independent of Leading Edge Materials, and allowing the local team to be expanded with an increased focus on customer and stakeholder relationships. Furthermore, it is anticipated that Woxna Graphite AB will be in a stronger position to benefit from Swedish and European public funding opportunities that are developing in the battery materials sector.
Based on the findings of the Strategic Review, the Board is of the view that the proposed strategy will be the least dilutive to existing Leading Edge Materials shareholders, while enabling the Woxna graphite project to access the funding necessary to further develop the materials, technology and corporate profile required to become a leading European supplier of high value graphite products. With more secure funding, the fully built Woxna graphite mine will maintain its early mover status in the European natural graphite market, and be best positioned to gain offtake agreements for battery anode materials through installation and operation of the proposed battery anode demonstration plant.
The transition process will be initiated immediately and the Board is now identifying the appropriate leadership and other resources required to enable swift progress. The Board will communicate these findings as they become available.
Subject to a range of technical, financial and market interest milestones being achieved, an Initial Public Offering (IPO) on a Swedish public market may be considered in the future for Woxna Graphite AB.
Mark Saxon, Interim President and CEO, stated "Despite the widespread evidence of rapid growth in the lithium ion battery and electric vehicle markets, North American mining markets remain subdued with limited funding opportunities. Through the Strategic Review we have identified potential funding pathways in Europe that are open for direct project investment. The Board strongly believes direct funding of Woxna Graphite AB, shall be the least dilutive way to finance the Woxna graphite mine through to production of high value graphite products."The Board emphasises that Leading Edge Materials will continue to hold significant exposure to the success of the Woxna graphite mine as a future graphite materials supplier. Meanwhile, the Board will continue to execute on other assets within the company's portfolio in the Nordic region and Romania. Interest in the company's portfolio of assets is demonstrated by the recent focus on rare earth element supply security following speculation of trade conflict between USA and China.
The proposed restructure is subject to the receipt of all necessary regulatory approvals that are customary for a transaction of this nature.
Update on developments in the European battery industry
The Leading Edge Materials Board remains confident in the strategy to focus on the supply of high value materials to the European lithium-ion battery market. Lithium-ion battery and electric vehicle (EV) markets are showing very rapid growth through the aligned interests of battery manufacturers, the automotive industry and the European Commission.
Volkswagen AG have expressed their ‘Strategy 2025’ ambition, to ‘build cars for millions, not millionaires’ with more than 50 EV models planned by 2025, requiring 6 lithium-ion battery factories equivalent to Tesla's Nevada giga-factory alone. Daimler's recent ‘Ambition 2039’ statement outlines the aim to have plug-in hybrids or all-electric vehicles comprise more than 50% of its car sales by 2030 and CO2-neutral production in Europe as of 2022.Support for battery and battery materials production within Europe are at unprecedented levels, with emerging Swedish lithium ion battery manufacturer Northvolt receiving a €350 million loan from the European Investment Bank ("EIB") during May 2019.
The European Commission's Vice President for the Energy Union, Maroš Šefcovic stated after a recent EU Battery Alliance meeting: "Our goal is to see European champions take the lead in the global arena. Batteries are a key strategic sector for the future of mobility and decarbonisation of our economy."Furthermore, Šefcovic commented: "We must also show that we mean business when filling the remaining gaps in the value chain, notably mining and refining. EU companies need to be better supported to invest in sustainable mining and refining of raw materials – both in EU and third countries. We plan to launch a European Raw materials investment facility with the EBRD and the EIB – hopefully at the end of the year."
Further information can be found at http://europa.eu/rapid/press-release_STATEMENT-19-2337_en.htm.
The proposed ‘European raw materials investment facility’ backed by the European Bank for Reconstruction and Development (EBRD) and the EIB is anticipated to provide financial support for accelerated exploration and development of critical raw materials including graphite, lithium, cobalt and rare earth elements within the European Union, to increase supply security and sustainability of the lithium-ion battery and automotive industries.
Read the article online at: https://www.globalminingreview.com/mining/28052019/leading-edge-materials-completes-strategic-review-for-woxna-graphite-mine/