Focus Graphite Inc.
TSX VENTURE : FMS
OTCQX : FCSMF
FRANKFURT : FKC

Focus Graphite Inc.

February 24, 2015 14:03 ET

Focus Graphite Announces Additional Debt Financing Interest in Lac Knife

OTTAWA, ONTARIO--(Marketwired - Feb. 24, 2015) - Focus Graphite Inc. (TSX VENTURE:FMS)(OTCQX:FCSMF)(FRANKFURT:FKC) ("Focus" or the "Company") is pleased to announce that FLSmidth ("FLS") has expressed its formal interest to further evaluate the Company's Lac Knife Project in order to provide Focus with a "One Source" solution of engineering & technical services and supply of mineral processing equipment.

The initial set of Lac Knife mineral processing equipment being proposed by FLS bears a feasibility study level cost estimate of $12 million. The project scope may include a second component at a later date associated with dewatering, filtration, and conveyance equipment used for the de-watering and dry-stacking of tailings.

Focus included this revised tailings management system in the Environmental and Social Impact Assessment report filed in November 2014 in order to reduce the environmental footprint of Lac Knife's general site layout.

FLSmidth, is a Danish multinational global corporation with annual revenues in excess of 3.6 billion euros, and is a leading supplier of mineral processing equipment and mining services and is specialized in dry-stacked tailings management.

"FLS's Letter of Interest represents another significant potential financing option as the Company develops the Lac Knife Structured Project Financing," said Don Baxter, Focus Graphite President and Chief Operating Officer.

FLS has introduced the Lac Knife project to the Danish Export Credit Agency ("EKF") and the project may be eligible for EKF credit support. An EKF guarantee is backed by the Danish State, and as such, the EKF loan guarantee can be considered as AAA-rated. "Both parties are discussing this financing option with a view to achieving a mutually satisfactory conclusion."

"This potential debt facility represents 7% of Lac Knife's total project financing requirements, raising the total of potential vendor financing to approximately 20%. Terms of a debt facility are to be negotiated and a comprehensive disclosure will be released at a later date."

This announcement follows the Caterpillar Structured Finance announcement on January 6th, 2015. Focus is continuing project-financing discussions with various stakeholders, investors, and institutional funds in both the public and private sector with the objective of minimizing shareholder dilution through a mix of debt and equity financing.

On August 8th, 2014 Focus Graphite published its Lac Knife Project Feasibility Study that included a mine and concentrator operation with a capital expenditure requirement of $165.6 million including a $17.1 million contingency.

Qualified Person
The technical information in this news release was prepared, reviewed and approved by Mr. Don Baxter, P. Eng., Focus President & Chief Operating Officer, and a Qualified Person as defined by NI 43-101 guidelines.

About FLSmidth

Established in Denmark in 1882, FLSmidth supplies the minerals and cement industries globally with engineering, single machines and complete processing plants, maintenance, support services and operation of processing facilities. Its core strengths are reflected in its market-leading product range, its ability to implement, manage and maintain projects, and its operation of minerals and cement processing plants worldwide. FLSmidth employs some 15,000 in more than 50 countries, including Canada.

About Focus Graphite

Focus Graphite Inc. is an emerging mining development company with an objective to produce value added products initially for the lithium ion battery market from the Lac Knife graphite deposit located south west of Fermont, Québec. The Lac Knife project hosts a NI 43-101 Measured and Indicated Mineral Resource Estimate* of 9.6 million tonnes (432,000 tonnes Measured and 9,144,000 tonnes Indicated) grading 14.77% graphitic carbon (Cg) as natural flake graphite with an additional Inferred Mineral Resource Estimate* of 3.1 million tonnes grading 13.25% Cg. Focus' goal is to assume an industry leadership position by becoming a low-cost producer of technology-grade graphite. The Feasibility Study filed with SEDAR on August 8, 2014 for the Lac Knife Project indicates the project is economically viable and has the potential to become a low cost graphite producer based on 7.86 million tonnes (429,000 tonnes Proven and 7,428,000 tonnes Probable) of Proven and Probable Reserves grading 15.13 Cg. On May 27, 2014 the Company announced the Potential for High Value Added Sales in the Li-Ion Battery Sector following battery coin cell tests performed on Lac Knife Spherical Graphite ("SPG"). Testing measured the performance metrics and confirmed Focus' capability to tailor lithium ion battery anode grade graphite and value added products to meet the most stringent customer specifications. Focus Graphite is a technology-oriented enterprise with a vision for building long-term, sustainable shareholder value. Focus also holds a significant equity position in graphene applications developer Grafoid Inc.

* Mineral resources are not mineral reserves and do not have demonstrated economic viability

Forward Looking Information

This News Release contains "forward-looking information" within the meaning of Canadian securities legislation. All information contained herein that is not clearly historical in nature may constitute forward-looking information. Generally, such forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: (i) volatile stock price; (ii) the general global markets and economic conditions; (iii) the possibility of write-downs and impairments; (iv) the risk associated with exploration, development and operations of mineral deposits; (v) the risk associated with establishing title to mineral properties and assets; (vi) the risks associated with entering into joint ventures; (vii) fluctuations in commodity prices; (viii) the risks associated with uninsurable risks arising during the course of exploration, development and production; (ix) competition faced by the Company in securing experienced personnel and financing; (x) access to adequate infrastructure to support mining, processing, development and exploration activities; (xi) the risks associated with changes in the mining regulatory regime governing the Company; (xii) the risks associated with the various environmental regulations the Company is subject to; (xiii) risks related to regulatory and permitting delays; (xiv) risks related to potential conflicts of interest; (xv) the reliance on key personnel; (xvi) liquidity risks; and (xvii) the risk of potential dilution through the issue of common shares. Forward-looking information is based on assumptions management believes to be reasonable at the time such statements are made, including but not limited to, continued exploration activities, no material adverse change in metal prices, exploration and development plans proceeding in accordance with plans and such plans achieving their stated expected outcomes, receipt of required regulatory approvals, and such other assumptions and factors as set out herein.

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information. Such forward-looking information has been provided for the purpose of assisting investors in understanding the Company's business, operations and exploration plans and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking information is made as of the date of this News Release, and the Company does not undertake to update such forward-looking information except in accordance with applicable securities laws.

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