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

Focus Graphite Inc.

September 24, 2014 09:19 ET

Focus Graphite Launches Project Financing Phase of Lac Knife With First Closing of a $6.5 Million Private Placement

OTTAWA, ONTARIO--(Marketwired - Sept. 24, 2014) -

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Focus Graphite Inc. (TSX VENTURE:FMS)(OTCQX:FCSMF)(FRANKFURT:FKC) ("Focus" or the "Company") announced today the launching of the project financing phase of the Lac Knife development project, with the closing of the first tranche of a non-brokered private placement offering (the "Offering") of up to 13,000,000 units (the "Units") at a price of $0.50 per Unit for gross proceeds of $6,500,000. In total, Focus issued 3,861,000 units for gross proceeds of $1,930,500. Each unit consists of one (1) common share and one (1) warrant. Each warrant entitles the holder to acquire one (1) additional common share of the Company at a price of $0.60 until September 23, 2018.

In connection with the Offering, the Company paid finder's fees totalling $71,470 and issued 142,940 non-transferable warrants with each warrant entitling the holder to acquire one (1) common share of the Company at a price of $0.60 per common share for a period of twenty-four (24) months expiring on September 23, 2016. Furthermore, insiders of the Company have participated in this first tranche for a total proceeds of $202,000. The securities issued under the Offering are subject to a four-month hold period expiring on January 24th, 2015. Focus may raise up to $6,500,000 under the current Offering and expects to proceed with a second closing shortly. The Offering is subject to the final approval of the TSX Venture Exchange.

The net proceeds from the Offering will be used to work towards several milestones associated with the development of the Company's Lac Knife natural flake graphite project, in particular work related to the Detailed Engineering Phase of the project including the Environmental Impact Study, Hydro-Quebec's detailed engineering study to connect power to the mine site, upgrading of the existing main access road to the mine site, geotechnical studies and for general corporate working capital purposes.

Management's emphasis during this development phase is placed on deploying best efforts to advance the potential mine start-up to 2016 from the scheduled 2017 start-up, as forecast in the Lac Knife project Feasibility Study announced on August 8th, 2014 (see news release of the Company for more details).

The Feasibility Study base case financial results show a pre-tax Internal Rate of Return of 30.1% (24.1% post tax), an NPV of $383 million at an 8% Discounted Cash Flow, and a payback period of three years, with a required CAPEX of $166 Million, inclusive of a $17 Million contingency, for mine and concentrator plant construction (for more details, please consult the complete Lac Knife Feasibility Study as well as the news release summaries dated June 25th and August 8th, 2014, both available on the Company's website or on SEDAR at www.sedar.com). The potential of valued added products, including spherical graphite for batteries, is not included in the Feasibility Study, please see the news release dated May 27th, 2014 for spherical graphite test results.

Graphite concentrate prices are largely based on flake size and carbon content. As shown in the Company's Feasibility Study, Lac Knife's concentrates grade 98% carbon content for all size categories coarser than +200 mesh (75 microns) allowing for even the finer concentrate products to produce very competitive, high quality value added spherical graphite products for the lithium ion battery market.

Don Baxter, Focus President and COO said, "This private placement officially launches the project financing phase of Lac Knife's project development following the feasibility study results announced in August. The Company is actively working today with several interested parties to complete a total project financing structure."

Qualified Person

Mr. Don Baxter, P. Eng., President & Chief Operating Officer of the Company, a Qualified Person under National Instrument 43-101 - Standards of Disclosure for Mineral Projects, has reviewed and approved the technical content of this news release.

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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