Slide 1: It's All About the Numbers
IT’S ALL ABOUT LHE NUMBERS JUNE 2014
Slide 2: Disclaimer
Disclaimer This presentation 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 identifi
Slide 3: Fast Facts on Focus Graphite
Fast Facts on Focus Graphite Trades: TSX – V:FMS; OTCQX: FCSMF; FSE:FKC • 100% owner of Lac Knife • One of the lowest quartile cost graphite deposit in Quebec producers at $458/t • A mining friendly jurisdiction Offtake Agreement/First in the with excellent regional industry: infrastructure • Reaf
Slide 4: Lac Knife Location
Lac Knife Location. _ ERE Quebec Fermont ©. Lac Knife Graphite Project Port of Sept-tles © New York BYariiiig Page 3
Slide 5: What is Natural Graphite?
What is Natural Graphite? • One of the most versatile non-metallic minerals • One of two natural forms of carbon; the other is diamonds • Electrical and thermal conductivity are main characteristics • Highest natural strength and stiffness of any material • Melting Point: 3,650 oC; Produced in three
Slide 6: Global Graphite Consumption
Global Graphite Consumption • Graphite is mostly used in refining steel in refractory applications; steel foundries, lubricants, automotive brakes, clutches and gaskets • Future demand is being driven by green technologies (The Carbon Age) – Lithium batteries, fuel cells, electronics, construction m
Slide 7: Electric Vehicle Demand
Electric Vehicle Demand Page 6
Slide 8: Spherical Graphite (Battery Ready Product)
Spherical Graphite (Battery Ready Product) Focus Graphite has successful produced spherical graphite(SPG). This involves sizing, shaping, purifying and coating our Lac Knife flake graphite. • FMS has tested our SPG in batteries . The results have exceeded the benchmark commercial grades of SPG. • Po
Slide 9: Global Graphite Production
Global Graphite Production • China controls the market • The largest Chinese producer is calling for the state to impose same controls as REEs – restrict supply, consolidate production, impose export controls - better management of resources, labor and environmental impact • US has no graphite mines
Slide 10: Graphite Prices
Graphite Prices Source: Industrial Minerals Page 9
Slide 11: Production Costs and Price
Production Costs and Price Low Production Costs Mining and milling costs are estimated at $458/tonne of concentrate Hydro electric power, 4¢/kWh Competition’s costs range from $390 - $1,300 + Will be able to weather downturns as a sustainable producer The selling price used in the Updated
Slide 12: Updated Preliminary Economic Assessment
Updated Preliminary Economic Assessment Revenue Estimates Financial Results Annual Milling Capacity 300,000 tpy Initial Capital Cost $126 M Concentrate Production 44,200 tpy Net Present Value Cost per tonne of Concentrate $458/tonne • 8% discount rate $317 M Annual Operating Costs $20.0 M • 10% disc
Slide 13: Capital Structure
Capital Structure Tickers: TSX-V:FMS; OTCQX:FCSMF; FSE: FKC Basic Shares Outstanding: 107 MM Options Outstanding: 9.4 MM Warrants Outstanding:($0.91 - $1.30, 2015expiry) 0.7 MM Market Capitalization: ~C$64 MM Cash & Equivalents: ~C$6 MM Debt: $0 Enterprise Value: ~C$58 MM Insider Ownership & Managem
Slide 14: Lac Knife Milestones
Lac Knife Milestones Upcoming Milestones: Current Developments • Project financing: Evaluating NI 43-101 Mineral Resource options… Estimate: 9.6 Mt Measured and Indicated grading 14.77 Cg at a • Building an Operation Team: Mining Engineer, Production 3% Cg cut off grade and 3.1 Mt Geologist, Envir
Slide 15: Key Management
Key Management • Don Baxter, P.Eng., President and COO- Over 20 years of mining experience including operational experience in graphite mining and metallurgical flow sheet optimization • Judith Mazvihwa-MacLean, CFO, CMA and geologist with eight years accounting experience in the mining sector • Jef
Slide 16: Board of Directors
Board of Directors Jeffrey York, Chairman, Director • CEO of Farm Boy stores, former President and COO of Giant Tiger Stores Gary Economo, CEO and Director • Over 30 years’ experience in high technology, including President and CEO of SPI technologies selling graphite products to the electronics ind
Slide 17: Comparison Chart
Comparison Chart. : _EOCUS e wat OFF-TAKE ANG. PRODUCTION FLAKE COMPANY AGRE DIENT SENG Costs DISTRIBUTION 76%(+80) at 95% Cg NORTHERN $1800 $795 5%(+100) at 97% Cg GRAPHITE INC 19%(-.00) at 95% Cg 40%(+80) at 95% Cg FLINDERS $1199 $662 28% +440) at 92% CE INC. 329%(-140) at 88% Cg MA 55 29% (+80) a
Slide 18: High Quality Graphite Concentrate: Flake Size & Purity
High Quality Graphite Concentrate Lac Knife: Flake Size & Purity Pilot Plant Tests, SGS, • 11.1% large flake +48 at 98.8% Cg. The larger the flake and the higher the purity, the greater the value. • High grade carbon by flotation translates into more high growth applications and very cost effective
Slide 19: General Flake Purification Process
General Flake Purification Process Flotation Concentrate 96% minimum carbon crystalline flake graphite Run of mill Product ($458/t) Continuous Thermal Concentrate Purification 99.98% + after polishing Carbon 98.3% + Carbon Page 18
Slide 20: Lac Knife Location
Lac Knife Location • The property consists of 57 claims covering 3,000 ha/7500 acres • Located in northern Quebec, Canada, 27 km south-west of Fermont . • 500 km north of Baie- Comeau along the all season Highway 389 • About 60 km to the Wabush commercial airport • Near 2 railways lines connected to
Slide 21: Mineral Resource Estimate
Mineral Resource Estimate Total 191 drill holes = 18,320 metres Lac Knife Open Pit: 600 m Long 400 m Wide 200 m Deep **Mineral Resources, which are not Mineral Reserves, have not demonstrated economic viability. Page 20
Slide 22: Mineral Resource Estimate
Mineral Resource Estimate Lac Knife Mineral Resource Estimate @ 3.0 % graphitic carbon (“Cg”) cut-off Tonnage Cg In situ Graphite (t) (%) (t) Measured 432,000 23.66 102,000 Indicated 9,144,000 14.35 1,312,000 Measured + Indicated 9,576,000 14.77 1,414,000 Inferred 3,102,000 13.25 411,000 **Mineral R
Slide 23: Mine Infrastructure - Layout
Mine Infrastructure- Layout Page 22
Slide 24: Lac Knife Development Plan
Lac Knife Development Plan Page 23
Slide 25: Project Financing
Project Financing • $126 M initial CAPEX requirement, including $24m contingency. • Combination of equity and debt is being discussed, and maybe tied to strategic partnerships based on an offtake agreement. • Supply chain financing based on offtake. • Financing not dependent on outcome of FS. • Disc
Slide 26: bie SUA EEA BOM
bie SUA EEA BOM LHE NUMBERS