Mr. Eric Krafft reports

LEADING EDGE MATERIALS REPORTS QUARTERLY RESULTS TO JANUARY 31, 2024

Leading Edge Materials Corp. has released results for the fiscal period ending Jan. 31, 2024. All references to dollar amounts in this release are in Canadian dollars.

Highlights during and after the quarter

During the three months ended Jan. 31, 2024:

• On Dec. 14, 2023, the company announced it has received further positive assay results for cobalt-nickel-gold from Gallery 7. This second batch of 104 samples prolongate the zone of Co-Ni-Au occurrences by about 250 metres to a total length of roughly 400 m north-northwest-south-southeast, and constitute the central-southern part of G7 at the Bihor Sud project in Romania. Highlights include 6.7 per cent Co, 13.0 per cent Ni, 7.5 grams per tonne Au.
• On Dec. 21, 2023, 314,286 warrants were exercised at an average price of 10 cents per share for gross proceeds of $31,428.
• On Dec. 28, 2023, 3,375,000 warrants were exercised at an average price of 10 cents per share for gross proceeds of $337,500.

Results of operations

Three months ended Jan. 31, 2024, compared with three months Ended Oct. 31, 2023

During the three months ended Jan. 31, 2024 (Q1 2024), the company reported a net loss of $685,928 compared with a reported net loss of $387,343 for the three months ended Oct. 31, 2023 (Q4 2023), an increase in loss by $298,585, the increase in loss mainly due to share based compensation expenses of $159,472 (Q4 2023 -- $46,683), foreign exchange gain $35,971 (Q4 2023 -- gain $125,700) and net mark to market adjustment loss of $86,074 (Q4 2023 -- gain $42,550).

Three months ended Jan. 31, 2024, compared with three months ended Jan. 31, 2023

During the three months ended Jan. 31, 2024, the company reported a net loss of $685,928 compared with a net loss of $637,135 for the three months ended Jan. 31, 2023, an increase in loss of $48,793, the increase in loss mainly due to research, development and general exploration expenses of $117,350 (Q1 2023 -- $32,797).

Financial condition/capital resources

During the three months ended Jan. 31, 2024, the company recorded a net loss of $685,928 and, as of Jan. 31, 2024, the company had an accumulated deficit of $47,536,228 and working capital of $2,316,098. The company is maintaining its Woxna graphite mine on a production-ready basis to minimize costs and is conducting continuing research and development to produce higher-value specialty products. The company is also evaluating a potential restart of production at the Woxna graphite mine. The company anticipates that it has sufficient financing to meet anticipated levels of corporate administration and overheads for the ensuing 12 months; however, it will need additional capital to provide working capital and recommence operations at the Woxna graphite mine, establish a production facility for the Anode project, to finance future development of the Norra Karr property or to complete exploration activities in Romania. There is no assurance such additional capital will be available to the company on acceptable terms or at all. In the longer term the recoverability of the carrying value of the company's long-lived assets is dependent upon the company's ability to preserve its interest in the underlying mineral property interests, the discovery of economically recoverable reserves, the achievement of profitable operations, and the ability of the company to obtain financing to support its continuing exploration programs and mining operations.

Outlook

The company continues to see European policy initiatives increasingly taking shape as industrial policy, hardly seen in the Western World since the Second World War. The object of improving European competitiveness is clear. Leading Edge has in previous notes followed how this has developed via the general climate agenda, the Critical Raw Materials Act and the Net-Zero Industry Act. Relevant to the company is that one of the fundamental starting points is access to raw materials and process technologies of these.

Woxna graphite mine

Leading Edge maintains its built and permitted Woxna graphite mine and plant on care and maintenance, while monitoring market signals to consider a restart of graphite concentrate production, as the first step to developing a downstream anode business. Despite the looming demand-supply deficit, flake graphite prices have remained weak this past year. Increased capacity in Chinese synthetic graphite production has been an important factor. It is estimated that China accounts for 92 per cent of global anode production. This is important as it leads to constraints and impairs competitiveness for European auto industry.

Of course, this offers Sweden a great opportunity as a producer, and Woxna a first-mover advantage to help address this.

Norra Karr heavy rare earth project

At the Norra Karr development project, Leading Edge is working fully focused on its mining lease application. It aims to have this submitted within 12 months from now.

As this is done based on the new 2021 design of this project, the company is benefiting from authorities and other stakeholders evaluating the merits of the project based on recent plans that substantially reduce the potential for environmental risk. During this year Leading Edge plans to establish an office near site from which this work and the important initiatives around social licence and stakeholder engagement will be carried out.

Norra Karr, as one of the largest HREE deposits globally, and the most advanced one in the European Union, has the potential to be a cornerstone supplier to Western magnet producers.

Additionally, with Sweden recently having joined NATO, the company feels the importance of Norra Karr may become more pronounced also outside the EU.

Bihor Sud nickel-cobalt exploration project

Since having obtained permission to enter the company's underground galleries last year, this project has been advancing rapidly. As it has reported during the past year, Leading Edge encountered and assayed high grades of Co-Ni-Au and copper-zinc-lead-silver mineralization over large distances underground.

These results confirm the company's belief that this is a high-prospective exploration project with potential for both scale and high-grade mineralization.

Leading Edge has retained possession of an underground drill, which is being prepared to be put to work in areas from the inside of the G4 and G7 galleries.

During spring the company plans a surface drill program on 50 to 100 m deep geophysical anomalies and to explore the depth extent of G7 Co-Ni-mineralization.

Additionally, the company has entered its next target, Gallery 2, for which it has high expectations.

As far as exploration projects go, Leading Edge feels that this is an exceptional one, and it is hopeful for plenty of news flow during the coming quarters.

Financial information

The report for three months ending April 30, 2024, is expected to be published on or about June 21, 2024.

About Leading Edge Materials Corp.

Leading Edge Materials is a Canadian public company focused on developing a portfolio of critical raw material projects located in the European Union. Critical raw materials are determined as such by the European Union based on their economic importance and supply risk. They are directly linked to high-growth technologies such as batteries for electromobility and energy storage and permanent magnets for electric motors and wind power that underpin the clean energy transition toward climate neutrality. The portfolio of projects includes the 100-per-cent-owned Woxna graphite mine (Sweden), Norra Karr HREE project (Sweden) and the 51-per-cent-owned Bihor Sud nickel-cobalt exploration alliance (Romania).

We seek Safe Harbor.