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

Focus Graphite Inc.

July 24, 2015 17:21 ET

Focus Graphite Clarifies Certain Prior Disclosures on Its Mineral Development Project

OTTAWA, ONTARIO--(Marketwired - July 24, 2015) - Focus Graphite Inc. (TSX VENTURE:FMS)(OTCQX:FCSMF)(FRANKFURT:FKC) ("Focus" or the "Company") is issuing this news release to clarify certain public disclosure statements on its Lac Knife mineral development project in past news releases, previous annual and interim management discussion and analysis ("MD&A") reports and various postings on its website, following a full review of its continuous disclosure record by the Ontario Securities Commission ("OSC").

The review was conducted under the 51-312 Harmonized Continuous Disclosure Review Program that improve the completeness, quality and timeliness of continuous disclosure ("CD") of many reporting issuers in Canada. These clarifications are as follows:

Proven and Probable Mineral Reserves at Lac Knife

In its news release dated June 25, 2014, the Company reported a Mineral Reserve Estimate without stating whether the mineral reserve is included in, or excluded from, the mineral resource contrary to section 2.2 (b) of the National Instrument 43-101 ("NI 43-101"). The Company also omitted to state the reference point at which the Mineral Reserve is defined contrary to the new version of the CIM Definition Standards - For Mineral Resources and Mineral Reserves adopted on May 10, 2014.The Company is therefore correcting this statement by releasing this clarification:

The Mineral Reserve is included in the Measured and Indicated Mineral Resource of 9,576 kt grading 14.77% graphitic carbon ("Cg") (432 kt of Measured Resource grading 23.66% Cg and 9,144 kt of Indicated Resource grading 14.35% Cg). The reference point for the Mineral Reserve Estimate is the mill feed.

Table 1: Lac Knife Open Pit Mineral Reserves*
Category Tonnage (kt) Cg Grade (%)
Proven 429 23.61
Probable 7,428 14.64
Proven and Probable 7,857 15.13

*The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources modified to produce the Mineral Reserve. The reference point for the Mineral Reserve Estimate is the mill feed.

Use of phrase "NI 43-101 compliant"

In its news releases since January 28, 2014 and annual and interim Management's Discussion and Analysis ("MD&A"), the Company used the phrase "NI 43-101 compliant" when referring to resource estimates, preliminary economic assessments and feasibility study. The Company's intention was to report that such estimates, assessments and study had been completed in accordance with the national instrument. As NI 43-101 is a disclosure rule and not an estimation rule, the phrase "NI 43-101 compliant" is potentially misleading when used to describe mineral resource or reserve estimates, or mining technical studies. The Company is therefore confirming that future disclosure will not describe technical studies, mineral resource estimates, or mineral reserve estimates as "NI 43-101 compliant".

Refiling of annual MD&A and most recent interim MD&A

In the annual MD&A for the financial year-ended September 30, 2014 (filed January 28, 2015), the interim MD&A for the quarters ended December 31, 2014 (filed March 2, 2015) and March 31, 2015 (filed May 29, 2015), the Company reported a Mineral Reserve Estimate without stating whether the mineral reserve is included in, or excluded from, the mineral resource contrary to section 2.2 (b) of the National Instrument 43-101 ("NI 43-101"). The Company also omitted to state the reference point at which the Mineral Reserve is defined contrary to the new version of the CIM Definition Standards - For Mineral Resources and Mineral Reserves adopted on May 10, 2014.

The Company also described related party transactions with companies wholly or partly owned by an unnamed officer and director of the company in the same documents. Form 51-102F1 requires related parties to be identified by name.

Revision of the corporate presentation and the Company's website

The OSC noted that the Company did not comply with the NI 43-101 on is website and in its corporate presentation by: using the terms "bankable" when talking about the Feasibility Study; using the phrase "NI 43-101 compliant"; disclosing the mineral resources and mineral reserves without stating whether reserves are included in resources and the reference point for the Mineral Reserve; and disclosing pre-tax NPV and payback period without disclosing corresponding after-tax results in equal prominence. The Company has revised the corporate presentation and the website accordingly.

About Focus Graphite

Focus Graphite Inc. is an advanced mining development company with an objective of producing graphite concentrate at its Lac Knife deposit located south west of Fermont, Québec. In a second stage, to meet Quebec stakeholder interests of transformation within the province and to add shareholder value, Focus is evaluating the feasibility of producing value added graphite products including battery-grade spherical graphite.

The Lac Knife project hosts a Measured and Indicated Mineral Resource Estimate* of 9.58 million tonnes grading 14.77% graphitic carbon (Cg) (432,000 tonnes Measured @ 23.66% Cg and 9,144,000 tonnes Indicated @ 14.35% 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 concentrate.

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 concentrate producer based on 7.86 million tonnes of Proven and Probable Mineral Reserves** grading 15.13% Cg included in the Mineral Resource (429,000 tonnes Proven @ 23.61% Cg and 7,428,000 tonnes Probable @ 14.64% 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 Spherical Graphite ("SPG") produced from the Lac Knife graphite concentrate. 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 graphite mining development company 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

** The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources modified to produce the Mineral Reserve. The reference point for the Mineral Reserve Estimate is the mill feed.

For more information about Focus Graphite, please visit www.focusgraphite.com.

Qualified Person

The above scientific and technical information about the exploration activities as defined in NI 43-101 s.1.1, was prepared, reviewed and approved by Benoit Lafrance, géo/P.Geo, Ph.D. (Québec), Vice-President of Exploration for Focus and a Qualified Person under National Instrument (NI) 43-101 guidelines.

Forward-Looking Statement

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.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the accuracy of this release.

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