Focus Graphite firms up 10-year Lac Knife offtake deals
2015-09-25 12:11 ET - News Release
Mr. Gary Economo reports
FOCUS GRAPHITE INC. AND GRAFOID INC. FINALIZE TWO DEFINITIVE, 10-YEAR OFFTAKE AGREEMENTS FOR LAC KNIFE GRAPHITE CONCENTRATE
Focus Graphite Inc. has finalized two definitive offtake agreements with Grafoid Inc., a graphene application development company, and a related party.
The first offtake agreement (the graphene offtake, formerly the energy offtake) commits Grafoid to acquire, at its discretion, up to an annual maximum of 1,000 tonnes of high-purity (98.3 per cent total carbon Ct) (1) large-flake (plus 80 mesh) graphite concentrate annually from the Lac Knife project for 10 years, representing up to 6.8 per cent of the projected annual production of 14,606 tonnes of high-purity large-flake concentrate (taken from technical report on the Lac Knife graphite feasibility study).
(1) 98.3 per cent Ct purity is the average of six pilot plant runs. The pilot plant program was completed in 2013 by SGS Canada Inc., located in Lakefield, Ont. See news release dated Aug. 21, 2013.
The second offtake agreement (the polymer offtake) commits Grafoid to acquire, at its discretion, up to 25,000 tonnes of 97.8 per cent Ct (average concentrate grade for all flake sizes) graphite concentrate annually from the Lac Knife project for 10 years, representing up to 56.4% per cent of the projected total annual production of 44,300 tonnes (all flake sizes) (taken from technical report on the Lac Knife graphite feasibility study).
Gary Economo, chief executive officer of Focus Graphite, announced the two companies have finalized terms for two offtake agreements and that Focus has received the first of 12 scheduled payments from Grafoid as per each agreement schedule.
"These agreements are the culmination of Focus Graphite's long-held strategic business vision that looked towards selling Lac Knife's high-grade, high-purity graphite into future high-value technology markets," said Mr. Economo.
"And the future is represented by a small but significant flake graphite mining deposit on the road to development in the Northern Quebec community of Fermont," he said.
"These agreements assure Grafoid with a secure supply of graphite to meet its customer requirements for graphene, while Focus benefits from long-term revenue streams," Mr. Economo said.
Grafoid is a Canadian graphene research and development company that invests in the development of industrial-scale graphene applications and technologies, in partnership with major global corporations and academic institutions. Grafoid's graphene products are developed under the trade name of Mesograf.
Focus holds 7.8 million Grafoid common shares valued at $39-million (U.S.) (2).
(2) Grafoid Inc. is a private company that has raised nearly $20-million (U.S.) and completed acquisitions at $5 (U.S.) a share, as referenced in a company release on the acquisition of ALCERECO and in investment analyst coverage by New York-based JGL Partners LLC.
Graphene offtake agreement
If the Lac Knife project comes into production, the graphene offtake is intended to supply Grafoid's needs for a range of next-generation graphene-based automotive batteries, batteries for consumer electronics and energy storage applications. Customer requirements would come from Grafoid, its subsidiaries, acquisitions and/or joint venture partnerships.
Under the terms of the graphene offtake agreement, Grafoid will pay Focus Graphite $1-million over a 12-month period, with the first payment of $83,333 being on or before Sept. 30, 2015 (received), for the right of first refusal to purchase up to the annual maximum of 1,000 tonnes, and will also give Grafoid the first right of refusal to extend and expand the offtake agreement for an additional 10-year period. The pricing for an additional 10-year period will be set at market price less 10 per cent.
Polymer offtake agreement
If the Lac Knife project comes into production, the polymer offtake is intended to supply Grafoid's needs for a range of graphite-based polymer applications for the automotive and aerospace industry. Customer requirements would come from original equipment manufacturers (OEMs) and Tier 1 or Tier 2 suppliers.
This area of commercial application development holds considerable promise for Grafoid as OEMs are looking for lighter and stronger composite materials to replace expensive carbon fiber, and that ultimately reduce cost, increase fuel savings and build longer life into those components used in transportation industries.
The patented graphite-polymer process was developed by Grafoid's wholly owned subsidiary, Graflow Inc., in partnership with Rutgers University's AMIPP Advanced Polymer Center.
Under the terms of the executed polymer offtake agreement, Grafoid will pay Focus Graphite $1-million over a 12-month period, with the first payment of $83,333 being on or before Sept. 30, 2015 (received), for the right of first refusal to purchase up to the annual maximum of 25,000 tonnes of the projected total annual production of all flake size graphite concentrate. Grafoid will also have the first right of refusal to extend the offtake agreement for an additional 10-year period. The pricing for an additional 10-year period will be set at market price less 10 per cent.
The definitive offtake agreements were approved by the independent directors of Focus. As Mr. Economo and Jeff York are also directors and officers of Grafoid, both agreements constitute transactions with a non-arm's-length party under the rules and policies of the TSX Venture Exchange and are therefore subject to TSX-V acceptance.
"Focus Graphite's supply vision for technology markets has been, and continues to be, the cornerstone of our business mission for creating shareholder value and for the company's future prosperity.
"For example, the various graphene materials produced from Lac Knife's graphite are destined for lightweight, stronger automotive components -- including high energy power supplies -- for next generation electric vehicles.
"The benefits of business innovation far outweigh today's risks of maintaining the status quo during this transitional period of global technological change. In this regard, our strategy leads the way into diverse technology markets on a universal scale," said Mr. Economo.
Additional terms of the agreements
Focus will also divest between one million and two million common shares of Grafoid from the 7.8 million common shares of Grafoid the company currently owns. The proceeds from the sale will be applied to continuing development costs of the Lac Knife project. Under the terms of both agreements, Grafoid has the right of first refusal to acquire those shares (both agreements grant Grafoid a right of first refusal on the sale of Grafoid shares by Focus to a third party with no mention of actual sale of Grafoid shares).
In the event the profit margin is less than 10 per cent for Focus, the parties agree to review and renegotiate the annual quantity and purchase price of the concentrate.
The Lac Knife mineral project
The company continues to advance its $166-million structured project financing for the construction of the Lac Knife mine and concentrator facilities following the positive feasibility study completed in accordance with National Instrument 43-101 (NI 43-101).
The Lac Knife project also enjoys the support of the government of Quebec, as graphite is a priority commodity under its recently revived Plan Nord -- Northern Quebec's economic, environmental and social development program.
Focus Graphite's development milestones include an industry-first offtake agreement. Its Lac Knife project feasibility study highlighted an net present value of $242-million after tax and $383-million pretax, an internal rate of return of 24.1 per cent after tax and 30.1 per cent pretax, and one of the lowest projected operating mining costs in the world at $441 per tonne over a 25-year mine life.
The Lac Knife project permitting process is underway with the environmental and social impact assessment filed with the government in December, 2014.
Our business today is focused on concluding our Lac Knife project financing discussions and front-end detailed engineering required for mine permitting, in preparation for the EPCM phase of the project.
Discussions are currently underway with other potential graphite end-users as part of the company's continuing process of securing financing for the Lac Knife project.
The transformation plant industrial project
In May, 2015, Focus announced the launching of a feasibility study (5) for the construction of a graphite concentrate transformation facility in the port city of Sept-Iles, Que. A portion of the high-purity graphite concentrates from Lac Knife or obtained from other graphite concentrate producers is expected to feed the projected value-added transformation plant. The anticipated value-added graphite products include spherical graphite (SPG), used in lithium-ion batteries, and expanded graphite, used in electronics as graphite foil heat sinks. Focus wants to take advantage of the high-purity benefit of the Lac Knife concentrate (approximately 98 per cent total carbon).
The transformation plant feasibility study for value-added graphite products is in accordance with Quebec stakeholder interests for transformation within the province and with the new Quebec Mining Act which requires that an application for a mining lease be accompanied by a scoping and market study regarding transformation of mine products in Quebec.
(5) The feasibility study for the transformation plant do not concern the extraction of a mineral resource and do not follow the CIM definition standards for feasibility study as defined in NI 43-101 guidelines.
Qualified person
The above scientific and technical information about the exploration activities as defined in NI 43-101 Section 1.1 was prepared, reviewed and approved by Benoit Lafrance, geo/PGeo, PhD (Quebec), vice-president of exploration for Focus Graphite and a qualified person under NI 43-101 guidelines.
http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aFMS-2313422&symbol=FMS®ion=C
Guten Morgen! 
sind neben TGZ,NMI u.a. für mich unentdeckte Diamanten - Managment macht guten Job, Kosten sind runter und Cashlfow ist stabil
