August 28, 2012
The four months since our AGM have been busy months for Focus Graphite Inc.
We’ve rebranded as Focus Graphite Inc, embarked on drilling campaigns at both Lac Knife and Kwyjibo and continued work on our PEA. As we head into a busy fall, I want to take this opportunity to update you on our activities.
While everything we are doing is neither visible to shareholders nor reflected in today’s market price, our efforts continue to lay the foundation for healthy, long-term shareholder returns.
We are following three broad goals, namely: to de-risk the development of Lac Knife to ensure maximum shareholder return; to deliver a mine-to-market-to-technology strategy, and; to develop Focus Graphite into the #1 graphite company in the world.
When we’re done, we will achieve that. Focus will be the highest-grade, lowest-cost graphite producer with JV participation in the graphene revolution with globally significant partnerships.
Preliminary Economic Assessment
During the course of this summer events occurred which caused a delay in the release of our Preliminary Economic Assessment, or Scoping Study of our Lac Knife graphite deposit.
This delay was purposeful, and, at the end of the day, will align our production operations with customer demand.
The delay occurred because of a need to re-adjust our previously planned production levels and grades due to changes in elevated customer demand. We are now planning substantially increased production that corresponds with that demand.
These changes caused us to revise our economic projections; provoked new requests for quotations from equipment and services suppliers and caused us to revise facilities and infrastructural planning.
Typically, PEA’s are planned with an assumptive margin of error and contingency allowance. Therefore, prudence requires us to be sure our cost information is as accurate as possible. This has caused us to redouble our efforts with our customers to arrive at medium-term market price estimates against the backdrop of current global economic trends.
With recent fluctuations of graphite pricing in the $1,800 per ton range for large flake, it is imperative that we work with all our customers to obtain a better idea of future pricing levels in the years to come.
The revised PEA document should be published within the coming weeks.
Partnering discussions for long term distribution contracts, long term purchase agreements and long term development agreements in addition to project financing and technology development are continuing to take shape as planned.
We expect to be able to announce a number of these agreements during the coming months along with our financing.
99.99% Purity Graphite Production
One of our partners has successfully purified our graphite to the required battery grade of 99.99%. Purification testing is now underway with two additional potential customers. These advances are significant for our future market positioning as a supplier of “technology graphite” materials.
Summer Drilling – Lac Knife and Kwyjibo
I’m pleased to report that we’ve made great progress and in fact, are ahead of schedule with our summer drilling and exploration program at Lac Knife.
We shall be releasing preliminary reports once assays on the first several holes drilled are returned to us. Some 5,000 meters of infill and 2,500 meters of exploratory drilling is planned for this year’s campaign.
Our 4,000 meter drilling campaign at our Kwyjibo rare earths and polymetallic property has began and we look forward to its completion. It will be followed by an NI 43-101 compliant resource calculation.
Grafoid Inc. – Scaling Up
Our efforts in proving the scalability of Grafoid’s graphene manufacturing have been successful. The pilot plant has been operating for some three months now and is producing few layer, that is: bilayer and trilayer graphene in volume.
During the next 90 days, we shall be characterizing the material and developing material specifications and/or graphene application customization procedures.
Labrador Trough Properties and Claims
An updated technical report on our Labrador Trough properties is being prepared and we anticipate receiving it possibly by year end.
Various exploration programs were completed on a number of our newly acquired Quebec claims and properties during the summer. We shall be in a position to define a number of new projects once our Lac Knife project is financed and more advanced towards production.
Thank you for your continued interest and support.
President and CEO
613-691-1091 x 101