Introduction


Focus Graphite Inc. is a graphite mining company transitioning to the production phase from development.

Focus owns the world-class, high-purity Lac Knife, Quebec large flake graphite project some 27 km south of Fermont, Quebec. In December 2013, Focus announced an historic 10-year offtake agreement with a Chinese industrial conglomerate for the supply of up to 40,000 tonnes per year of high-purity and value-added technology graphite.

The company anticipates the closing of its Lac Knife mine and plant financing during the first quarter of 2014 followed by the submission of its Feasibility Study by summer 2014.

Focus’ goal is to become one of lowest cost producers of technology graphite in the world. By virtue of its offtake agreement with China, the company has positioned itself to compete in any market.

Lac Knife is the company’s flagship property, a crystalline flake graphite resource containing an NI 43-101 compliant resource of 8.1 million tons in all categories grading at 16% graphite. The property has excellent infrastructure, access to low-cost electricity, major roads, airports, two railroads and access to deep water shipping terminals.

The property has a proven history including a 1990 drill program that confirmed 8.1 million tons grading 16.7% graphite. The project lay dormant for many years under depressed commodity prices, but has been revived by Focus Graphite that acquired full ownership from IAMGOLD in 2010.

The Lac Knife project has robust economics and excellent potential for profitability. As a technology-oriented enterprise with a view to building long-term, sustainable shareholder value, Focus Graphite and its shareholders hold an equity stake in Grafoid Inc., a cutting edge graphene technology company invested in the development and production of MesoGraf™ — the global standard for high-energy density, affordable and scalable graphene for industrial and product applications.


2013 Milestones

  • Focus pre-sells up to 40,000 tpy over 10 years in a precedent-setting offtake agreement with China.
  • Updated Preliminary Economic Assessment for Lac Knife released
  • Feasibility Study, Mine Closure Plan and updated resource estimate commissioned
  • Pilot Plant results confirm 98%+ purity for large, medium and small flake using standard flotation and polishing
  • Offtake agreements with other strategic partners and mine and plant financing discussions near finalization

Focus Graphite is partnered with Grafoid Inc., one of world’s leading mass producers of high-purity, affordable, scalable graphene. Grafoid is engaged in industrial and corporate joint venture application development partnerships globally. Its trademark MesoGraf™ was launched in May, 2013.

Grafoid profile

Infill drilling has been completed at Lac Knife. The 2013 infill and exploration drilling program mapped the limits of the graphite deposit and was highlighted by two drill holes that returned results of 67.8 meters grading at 20.1% and 25 meters grading at 30.94% graphite. Some 2,018 meters were drilled to update the current mineral resource to Measured and Indicated categories from Indicated and Inferred.

Management has in depth experience and knowledge of the graphite technology market and is actively developing markets with technology graphite customers and lithium-ion battery manufacturers on a global basis.

Focus continues to develop technologies to further lower its production costs and with its cost-competitive advantage, intends to market its products in any market – including China.


The Lac Knife Graphite Mining Project — Updated PEA


An updated Preliminary Economic Assessment was published in November 2013.

Infrastructure, surface mining and primary processing facility construction activities are planned for completion by late 2015 or early 2016.

  • Life of Mine: 20 years
  • Annual milling capacity: 300,000 tpy
  • Concentrate production: 44,200 tpy with 100% of production assignable to technology grade
  • Focus aims to become one of the lowest cost technology graphite producers in the world at $458/t
  • $317 million pre-tax Net Present Value (NPV) (at an 8% discount rate)
  • 36.4% pre-tax Internal Rate of Return (IRR)
  • $890 million pre-tax undiscounted cash flow
  • Payback period: 2.4 years
  • $126 million initial capital cost, inclusive of a $24 million contingency
  • $68 per ton average unit operating cost at Lac Knife

Lac Knife’s flake distribution is unique in that for the first time, Focus has been able to confirm the market potential for high-purity small flake graphite suitable for purification to in-demand, low-cost battery-grade materials.

Don Baxter, Focus Graphite’s President and Chief Operating Officer described the company’s 2013 pilot plant results as “key to the potential economic viability of Lac Knife.”

He said: “The results show that all flake concentrate above 200 mesh can be produced at 98% Ct thereby eliminating the need to use third party purification proposed in our original PEA study.

“Within the graphite community, most operations produce lower-grade fines that are difficult to sell. Lac Knife holds the potential to open new markets to Focus for small flake technology-grade graphite products.”


Kwyjibo Rare Earth Elements and Copper Project


Focus Graphite owns a 50% interest in the Kwyjibo, Quebec rare earth elements (REE) and copper advanced exploration project being developed in partnership with Soquem, the Quebec Government’s commercial mining corporation, is on a fast-track for development.

The property, located some 10 kilometers north of Lac Manitou, was designated by the Quebec government in 2010 as a priority economic development target. It sits in one of the province’s historically rich iron ore, copper and gold (IOCG) mineralized zones.

Focus Graphite’s 2010 -2013 drilling programs produced significant initial results for rare earths, primarily yttrium, heavy rare earths and neodymium – a critical alloy in super-strength magnets used in hybrid and electric vehicle motors, representing about 20% of total rare earth oxides.

Some 400 historical samples collected during the early 1990s — which had been warehoused for a generation — were assayed in early 2011 and confirmed the REE content dominated by neodymium.

Results from Kwyjibo’s 2013 summer drilling program will be used to create an NI 43-101 resource estimate anticipated for release in 2014. Metallurgical testing to better define potential recoveries was also well underway by late 2013.


Management


Jeffrey York — Chairman and Director

As a co-founder and Chairman of the Board of Focus Graphite Inc., Mr. York is an activist director in terms of shaping the company’s business growth and development. He graduated from Princeton in 1986 with a degree in Economics and obtained his Chartered Accountant designation in 1989. Mr. York is currently Chief Executive Officer of Farm Boy stores, named one of the best managed companies in Canada in 2011.

A chartered accountant, Mr. York began his professional career with Ward Mallette, Chartered Accountants, before joining Giant Tiger Stores, a regional retail chain which he grew into a national, billion dollar company. During his 20-years with Giant Tiger, he served as President and CEO of the company for 10 years. Mr. York is an active member of the Young Presidents Organization and has been involved in that executive network since 2002.


Gary Economo — Chief Executive Officer and Director

Gary Economo is CEO of Focus Graphite, the owner of the high-purity Lac Knife, Quebec large flake graphite deposit. He is also co-founder and President of Grafoid Inc., an emerging global graphene technology development company.

Mr. Economo has a distinguished business career, serving as CEO for a number of public and private high technology companies during the last 20 years. He enjoys a long history of graphite marketing and sales for high-tech applications.

Over the span of his business career, Mr. Economo provided strategic consulting and representation services to technology companies in North America and Asia. In particular, he has a track record of success and expertise in building shareholder value when tasked with bringing discovery companies to market. Born in Greece and raised in Montreal, Mr. Economo lives with his family in Ottawa.


Donald K.D. Baxter, P.Eng. — President

Don Baxter holds a degree in Mining Engineering from Queen’s University, is a Registered Professional Engineer and a Qualified Person under NI 43-101. Mr. Baxter served as President of Northern Graphite Corporation between February 2, 2011 and July 8, 2013 and was responsible for all technical aspects relating to the Bissett Creek graphite project including the bankable feasibility study, metallurgical test work and environmental and mine permitting. He also served as Mine Superintendent at the Kearney Graphite mine when it operated in the 1990s. Mr. Baxter served as a Director of Mining at Ontario Graphite Ltd., has worked for Inco and Noranda Minerals as well as numerous consulting projects for base and precious metals.


Benoit Lafrance — Vice President, Exploration

Dr. Lafrance assumes his responsibilities with Focus Graphite after serving three years as scientific researcher for CONSOREM, an applied research group for mineral exploration. His previous experience includes four years with Cogitore Resources Inc. as senior geologist and five years with the Quebec Government geological survey.


Jeff Hussey — Vice President, Project Development, Lac Knife

Mr. Hussey earned his B.Sc in Geology from the University of New Brunswick and is a consulting geologist with 28 years experience in open pit and underground mine operations.  He holds a Six Sigma Black Belt certification from working with Noranda/Falconbridge in project management, process optimization and quality control, and is based in Montreal. Mr. Hussey’s project management experience includes open pit, surface infrastructure, and water treatment plant management, including optimization projects in the Concentrator and Site Services Departments Xstrata’s Raglan nickel mine.


Judith Mazvihwa-MacLean — Chief Financial Officer

A Vancouver-based geologist and accountant, Ms. Mazvihwa-MacLean has more than 16 years of experience in mineral exploration, mining, management and corporate finance. She is also the Chief Financial Officer at Focus Graphite Inc. Prior to joining Focus Graphite, Ms. Mazvihwa-MacLean was the CFO for Golden Harp Resources Ltd., Logan Resources Ltd., and Acme Resources Ltd (formerly International KRL Resources Corp.).

She also served as a member of the Board for both Logan Resources Ltd., and Acme Resources Ltd. Judith has a significant academic background. She holds a B.Sc. (Geology) from the University of Zimbabwe, a M.Sc. from Brunel University in England and earned her MBA at Simon Fraser University in British Columbia. She was accredited a Certified Management Accountant by the Certified Management Accountants Society of British Columbia.


Francis Pomerleau — Director

A Civil Engineer, Mr. Pomerleau was born and raised in St. Georges, Quebec. He joined the Pomerleau Group of companies in 1991 as an assistant project manager. Currently, Mr. Pomerleau serves as a Director of the Pomerleau Group and is President of Ottawa-based Pomerleau Ontario. He also serves as Co-President Beaubois, an architectural millwork company.

In addition to his day-to-day management responsibilities, Mr. Pomerleau is actively involved with several industry-linked committees and is Chair of the General Contractor Council of the Canadian Construction Association. Mr. Pomerleau holds a civil engineering degree from École Polytechnique de Montréal, and an MBA from the International Institute for Management Development (IMD) in Lausanne, Switzerland.


Chester Burtt — Director

Mr. Burtt is President of Chester Burtt & Associates Ltd. (CBAL), a corporate and public affairs advisory firm that specializes in connecting private and public companies with domestic and international opportunities. CBAL also arranges for the provision and supply of financial services in mergers, acquisitions and joint ventures. Working through an international network and associate firms, CBAL has a 25-year history of offering a full range of services to assist companies with strategy development and decisions to best suit their investor and corporate relations. Mr. Burtt graduated with a BA from Waterloo Lutheran University and MA from Wilfrid Laurier University in Political Science.


Marc-Andre Bernier — Senior Technical Advisor, and Qualified Person

Mr. Bernier is Focus Graphite’s Qualified Person. A geoscientist with more than 26 years professional experience, Mr. Bernier specializes in exploration geochemistry in support of regional and international mineral development initiatives. A resident of Chibougamau, Quebec, Mr. Bernier has directed or managed mining development projects in Canada, the Caribbean, Africa and South America. Mr. Bernier also holds the position of Senior Geoscientist with the Table Jamésienne de Concertation Minière (TJCM) a regional development agency dedicated to promoting sustainable mineral development across northern Québec and an advisor to Makivik Corporation, the economic and political representative of the Inuit of Northern Québec.

He is past-president of Majescor Resources Inc.; a director of SIMACT Alliance Copper-Gold Inc. (Canada) and Daraina Exploration SARL (Madagascar); a director and executive vice-president of SOMINE SA (Haiti); Vice-President and a director of Chibougamau-Chapais SADC and remains an active member of the Association of Professional Geoscientists of Ontario and the Ordre des géologues du Québec, as well as a member of the Canadian Institute of Mining and Metallurgy.


Dr. Gordon Chiu, B.Sci., M.Sci.,MSTP recipient, ND. — Advisor and Chief Scientist

Dr. Gordon Chiu is Focus Graphite’s Chief Scientist and is Vice President and co-founder of Grafoid Inc. Described as an “execution-driven businessman,” Dr. Chiu has combined domestic and international experience in the biomedical, chemical, cosmetic, medical, and technology industries. A lecturer and corporate advisor, Dr. Chiu is engaged in the discovery and research of graphene on behalf of Grafoid and provides advice on project selection with a view to increasing overall shareholder value.

Dr. Chiu is a former research scientist at Pfizer Inc. and Merck & Co., Inc. and has healthcare and marketing experience with strong links to Wall Street and Asia. He holds a B.S. degree summa cum laude in chemistry from Rensselaer Polytechnic Institute; graduated with an M.S. degree in chemistry from Seton Hall University with honors, and is globally distinguished by his acceptance as an MD/PhD candidate under the National Institutes of Health’s Medical Scientist Training Program at the Mount Sinai School of Medicine. He jointly combined his cumulative training with an ND degree in naturopathic medicine from the University of Bridgeport.


Corporate Profile on Stockhouse


Executives:
 Gary  Economo
Gary Economo
CEO

Gary Economo is CEO of Focus Graphite, the owner of the high-purity Lac Knife, Quebec large flake graphite deposit. He is also co-founder and President of Grafoid Inc., an emerging global graphene technology development company.

Mr. Economo has a distinguished business career, serving as CEO for a number of public and private high technology companies during the last 20 years. He enjoys a long history of graphite marketing and sales for high-tech applications.

Over the span of his business career, Mr. Economo provided strategic consulting and representation services to technology companies in North America and Asia. In particular, he has a track record of success and expertise in building shareholder value when tasked with bringing discovery companies to market. Born in Greece and raised in Montreal, Mr. Economo lives with his family in Ottawa.