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

Focus Graphite Inc.

October 20, 2014 16:30 ET

Focus Graphite Confirms Significant Mineralization at Depth Below a Discovery of 88.5 Metres Grading 12.82% Graphitic Carbon at its Lac Tetepisca Project

Metallurgical Results Show an average of 94.7% Total Carbon in Plus 200 Mesh Flake, Including 97.7% Total Carbon for Plus 80 Mesh Flake; Similarities in Carbon Content to Focus' Lac Knife Deposit

OTTAWA, ONTARIO--(Marketwired - Oct. 20, 2014) - Focus Graphite Inc. ("Focus" or the "Company") (TSX VENTURE:FMS)(OTCQX:FCSMF)(FRANKFURT:FKC) is pleased to announce that significant widths of graphitic mineralization ranging from 95 to 110 meters in thickness* were intersected in a new zone at its wholly owned Lac Tétépisca Project ("the Project") southwest of the Manicouagan reservoir in Québec.

Four fences of holes were spaced 200 metres apart, covering a 600-metre strike length of this new zone in a drill program designed to test surface mineralization found in trenches down to a vertical depth of approximately 100 metres.

The "Manicouagan-Ouest graphitic corridor" was discovered by Focus in 2012 and then exposed and channel sampled in two trenches in the fall of 2013. Assays up to 88.5 m @ 12.82 % graphitic carbon ("Cg") and 84 m @ 11 % Cg were obtained. The 2014 drill hole assay results are pending.

Preliminary metallurgical characterization of a 10kg composite sample achieved a carbon content averaging 94.7% total carbon ("Ct") for all flake above 200 mesh, including 97.7% Ct for plus 80 mesh flake - a quality that is critical to the lithium ion battery market. The concentrate was produced by only a three-stage cleaner flotation test. This suggests that the impurities are loosely attached to the surface and perimeter of the flakes and are not embedded within the graphite mineral layers of individual flakes, similar to what has been shown at Lac Knife. The concentrate grades could be further improved through secondary polishing and cleaning as was shown to be the case with the Lac Knife concentrate.

This summer Abitibi Geophysics of Val-d'Or, Québec, completed a combined magnetic-electromagnetic ground IMAGEM geophysical survey that covered 47 km of grid-lines over the "Manicouagan Ouest graphitic corridor". This time domain IMAGEM geophysical system has a high spatial resolution to allow for a more detailed analysis of the EM conductors within the anomalous zone.

The graphitic corridor is outlined by EM anomalies that are very well explained by the trenching and drilling results, and the drill intercepts correlate very well with EM anomaly boundary. The discovery zone that was drilled has a geophysical signature that extends for more than 200 m to the northeast and over 700 m to the southwest for a total strike length of 1500 metres, and it is also open at depth.

Don Baxter, P.Eng., President and COO of Focus Graphite said: "We are very excited about these drilling results that confirm significant widths of mineralization at depth and the potential that this property may hold. Together with the positive, preliminary metallurgical test results yielding high carbon content of medium and fine flakes, our Lac Tétépisca project is very promising. So far it compares favourably in terms of length, width and grade to our Lac Knife graphite deposit."

"Furthermore," Mr. Baxter said, "We are able to apply our operational and metallurgical experience, and what we have learned from developing the Lac Knife spherical graphite to the Lac Tetepisca project. Early indications are that it may produce a similar high quality product. At Lac Knife we have shown that we can take the less desirable finer sized flake concentrates and transform them into a 98% carbon concentrate that is potentially higher valued. This product is in high demand for lithium ion batteries.

"Tetepisca's fine flake fraction shows similar qualities to what we have experienced at Lac Knife. Further tests are warranted, as this gives Focus a second option to enhance the Company's mid-term growth profile and show a potential for a larger quantity of spherical graphite. However, our near term objective remains Lac Knife's project financing and development," Mr. Baxter said.

* Intersections of graphitic mineralization are expressed as core length, however the drill holes crosscut the envelope of the mineralized zone strike and dip at a high angle.

2013 Trenching Program

In the fall 2013 two trenches (MO-TR-01 and MO-TR-02) that measured 175 and 167 m in length respectively, tested a portion of the Manicouagan-Ouest graphitic corridor. Assays results from these trenches are listed in Table 1 below:

TABLE 1: 2013 TRENCHING PROGRAM RESULTS
Trench Azimuth Total
Length
Intercepts From To Intersection
Length
Cg
(m) (m) (m) (m)** (%)
MO-TR-01 N 128 175 Intersection 78.0 162.0 84.0 11.01
Including 78.0 127.5 49.5 15.03
Intersection 39.0 45.0 6.0 6.49
MO-TR-02 N 128 167 Intersection 45.0 133.5 88.5 12.82
Including 69.0 78.0 9.0 16.51
Including 94.5 133.5 39.0 18.04
** Intersections are not true thicknesses but expressed as channel sample lengths. However, the trenches crosscut the strike of the mineralized zone envelope at a high angle. Mineralized Intersections are calculated with Cg > 5% over a minimum of 6 m; maximum internal dilution was 3 m; there is no external dilution considered.

Trenches are perpendicular (azimuth N128) to the EM corridor and spaced 225 m apart. A total of 104 representative, channel samples (1.5 m long), from trench MO-TR-01 and 98 samples from trench MO-TR-02 were collected using a rock saw and shipped to IOS Services Géoscientifiques ("IOS") sample preparation facilities in Chicoutimi, Québec.

The prepared samples were sent to ALS Minerals in Vancouver for graphitic carbon (Cg) and total sulphide analysis using LECO induction. One of every three samples was also sent to ALS for a 48 multi-element analysis using ICP methods.

With respect to the QA/QC program, blanks, standards and duplicates were introduced, representing roughly 15% of the analyses. A map showing the location of the trenches and the drill holes is available on the Company's website at www.focusgraphite.com.

Metallurgical and Mineralogical Studies

With an objective to characterize the mineralization, Focus awarded a contract to conduct preliminary metallurgical characterization to SGS Canada Inc., of Lakefield, Ontario. One 10 Kg composite sample underwent a test program to provide an indication of flake size distribution that can be obtained in a graphite concentrate by means of standard mineral processing methods.

The results were very good taking into account a head grade of 20% graphitic carbon as well as an intermediate combined 3rd cleaner concentrate grade of 91.8 % total carbon analysis and the good metallurgical response after only 3 cleaner stages. Further, the carbon recovery into the 3rd Cleaner concentrate was very good at 94.2%, especially when taking into account that these results were obtained in an open circuit cleaner test and not a locked cycle flotation test with internal circulation of the intermediate cleaner flotation tailings.

Also worth noting is that only a coarse primary grind will be required suggested by the "Rougher" tails yielding a size distribution with a P80 of 340 microns and a combined carbon recovery of 98.1% into the flash and rougher concentrate.

The graphite recovery into combined rougher and flash flotation concentrate is expected to be even higher than 98.1%, as the rougher tails would contain the majority of the carbonate and organic carbon material, which are included in the total carbon assay. Hence, a primary grind of 500 microns or even coarser may be possible without encountering excessive graphite losses and possible flake damage.

The very high carbon content grade achieved in this preliminary cleaner flotation test suggests that the impurities are attached to the surface of the flakes and are not embedded within the graphite mineralogical layers. It is expected that the concentrate grades could be further improved through secondary polishing and cleaning. This was shown to be the case with the Lac Knife concentrate.

TABLE 2: Lac Tetepisca Project: Orientation Metallurgical Results
Size by Size Analysis of 3rd Cleaner Concentrate
Weight Weight Assays Distribution C
(g) (%) % C total %
Product Concentrate total***
+48 mesh (+300 microns) 0.5 0.1 0.0
+65 mesh (+212 microns) 11.0 2.6 95.8 2.8
+80 mesh (+180 microns) 15.9 3.8 97.7 4.1
+100 mesh (+150 microns) 26.9 6.5 96.1 6.8
+150 mesh (+106 microns) 74.0 17.8 96.0 18.6
+200 mesh (+75 microns) 78.4 18.9 92.2 18.9
+325 mesh (+45 microns) 105.3 25.3 89.6 24.7
-325 mesh (-45 microns) 103.7 24.9 88.8 24.1
Total Concentrate 415.7 100.0 91.8 100.0
* All carbon analyses were performed by SGS Canada Inc. ("SGS") and are reported as total carbon ("Ct"). The analytical methods that were used to determine the metallurgical results included total carbon analysis by Leco on the final concentrates.

Focus also had IOS Services Géoscientifiques of Chicoutimi, Québec conduct a petrographic mineralogical study of two trench grab samples from the Lac Tétépisca project, with the objective to characterize the general in-situ content of large graphite flakes within the mineralization. It should be noted that the variability between small samples can be considerable in graphite deposits. Visual observations as well these two separate grab samples indicate good large flake content.

The report included microscopic observations of both samples that contain approximately 25% graphite. The study indicated a high proportion of large and very large graphite flakes (+48 mesh or > 200 microns).

The high large flake content observed in the two samples was 80% and 74% respectively. This contrasts the lower large flake content observed in the concentrate produced by the bench scale (10 kg) preliminary metallurgical tests. This further supports the probability that only a coarse primary grind would potentially be required to liberate the large graphite flakes from the mineralized host rocks. More work will be undertaken in this regard.

2014 Exploration Drilling Campaign

Exploration drilling included 1875 m of drilling in 16 drill holes oriented perpendicular to the strike of the kilometric EM conductor defined by a combined MAG-EM airborne geophysical survey conducted in the spring of 2013. The periphery of the zone was more accurately outlined by ground geophysics using a Beep Mat instrument in the summer of 2013 and the MAG-IMAGEM ground survey completed the following summer in 2014.

IOS supervised the drilling campaign that was performed by Forage Rouillier of Amos, Québec. Drill hole collar locations and information are listed in Table 3 below.

A drill hole location map that includes the EM anomalous zone boundary as well as the trench locations is available on the Company's website at www.focusgraphite.com.

TABLE 3: DRILL HOLE COLLAR LOCATIONS AND ORIENTATION
DRILLHOLE X UTM-NAD83 Y UTM NAD83 Azimuth Plunge Length
LT-14-01 494707 5676091 302 -45 126
LT-14-02 494658 5676122 302 -45 126
LT-14-03 494591 5676169 302 -45 126
LT-14-04 494621 5675912 302 -45 144
LT-14-05 494555 5675946 302 -45 126
LT-14-06 494425 5676047 302 -45 60
LT-14-07 494483 5675991 302 -45 126
LT-14-08 494521 5675737 302 -45 153
LT-14-09 494286 5675859 302 -45 60
LT-14-10 494359 5675838 302 -45 126
LT-14-11 494430 5675795 302 -45 119
LT-14-12 494401 5675579 302 -45 144
LT-14-13 494328 5675624 302 -45 114
LT-14-14 494269 5675650 302 -45 114
LT-14-15 494205 5675699 302 -45 60
LT-14-16 494428 5675629 302 -45 150

About the Lac Tétépisca Graphite Project

The Lac Tétépisca project is wholly owned by the Company and is located to the southwest of the Manicouagan reservoir in Québec. Focus acquired 100% of the Project's mineral rights from a third party in 2011.

The project consists of 102 contiguous map-designated claims ("CDC") covering 5,503.08 ha. The Project is located in the southwest Manicouagan reservoir area, 234 km north-northwest of Baie-Comeau, in the Côte-Nord administrative region of Québec.

The Project is accessible year-round by a network of logging roads that connect to Highway 389 that connects Baie-Comeau on the Coast to the Project area.

The Lac Tétépisca project is located in the Grenville geological Province of Québec. The Manicouagan-Ouest graphitic corridor is located within the Nault Formation of meta-sedimentary rocks and is composed of rocks that are fine to medium grained quartz-feldspar-biotite paragneisses and schists with local occurrences of garnet and kyanite.

Fine to coarse graphite flakes and associated sulphides make up 10% to 20% of the rocks, with more than 50% in strongly mineralized zones.

A map of the Lac Tétépisca project showing the location of the Manicouagan-Ouest graphite bearing corridor is available on the Company's website at www.focusgraphite.com.

Quality Assurance / Quality Control

The entire drill cores were logged at the Lac Tétépisca camp and shipped to the IOS Services Géoscientifiques facilities in Chicoutimi for sample preparation. The HQ-caliber drill core is sawed in two pieces. One of the half core samples is kept for upcoming metallurgical tests. The other half core is sawed in two quarters, one for geochemical analysis while the other quarter is kept as a witness sample. Quarter core samples were dried before processing for density measurement, crushing and grinding at the IOS' sample preparation laboratory.

Once prepared, the samples are sent to the Consortium de Recherche Appliquée en Traitement et Transformation des Substances Minérales ("COREM"), an ISO/IEC 17025:2005 certified facility in Québec-City. IOS introduced standards, duplicates (sawing, crushing or grinding duplicates) and blank samples into the batch of core sample as part of the QA/QC program.

Qualified Person

The scientific and technical content of the news release was either prepared, reviewed and approved by Benoit Lafrance, Ph.D., géo (Québec), Vice-President of Exploration for Focus and a Qualified Person under National Instrument (NI) 43-101 guidelines.

About SGS Metallurgical Services (Lakefield)

SGS Canada Inc. ("SGS") is recognized as a world leader in the development of concentrator flow sheet design and pilot plant testing programs. SGS' Metallurgical Services division was founded over half a century ago. Its metallurgists, hydro-metallurgists and chemical engineers are experienced in all the major physical and chemical separation processes utilized in the recovery of metals and minerals contained in resource properties around the world.

The information pertaining to the metallurgical test program completed by SGS that is presented in this news release has been reviewed and approved by Mr. Oliver Peters, M.Sc., P.Eng, MBA, a consulting metallurgist working for SGS Canada Inc.. Mr. Peters has extensive experience in the development of metallurgical processes and has managed the majority of the graphite testing programs conducted at SGS in recent years and is a Qualified Person under National Instrument (NI) 43-101 guidelines.

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 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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