Agoracom Blog

Focus and Lara Sign a Definitive Option Agreement for the Caninde Graphite Project, Ciera State, Brazil *Client*

Posted by AGORACOM-JC at 11:31 AM on Monday, January 14th, 2013

OTTAWA, ONTARIO–(Jan. 14, 2013) – Focus Graphite Inc. (TSX VENTURE:FMS)(OTCQX:FCSMF)(FRANKFURT:FKC) (“Focus” or the “Corporation“) is pleased to announce that it has signed a Definitive Option Agreement (the “Agreement”) with Lara Exploration Ltd. (“Lara”)(TSX VENTURE:LRA) regarding Lara’s wholly-owned Canindé graphite project located in Ceará State, northeastern Brazil.

The definitive Agreement

Under the terms of the Agreement, Lara through its wholly-owned British Virgin Islands subsidiaries Lara (BVI) Ltd. and Pan Brazilian (BVI) Ltd. which collectively own 100% of the mineral rights to the Canindé property (the “Property”), has granted Focus two separate options to acquire a total 60% undivided interest in the Property, subject to an Underlying Royalty to a third party on 11 Exploration Licenses (2% of gross revenue from production sales to a lifetime maximum of R$750,000), in consideration of a staged exploration expenditure commitment over 5 years, the issuance of 500,000 common shares of Focus to Lara on or before the third anniversary of the Agreement and the reimbursement of Lara for certain claim acquisition costs. Focus will act as the Operator of the Canindé project exploration program throughout the duration of the Agreement.

Under the First Option, Focus can earn a 51% interest in the Property by: (i) paying R$30,000 to a third party for claim acquisition costs on or before the date of this Agreement; (ii) issuing 500,000 common shares to Lara (100,000 shares upon signing of the agreement and 400,000 shares by the third anniversary thereof) and (iii) carrying out exploration on the Property (including 2,000 m of drilling and an electromagnetic survey of the entire Property) totalling $2.5 million by the third anniversary of the Agreement based on the following schedule: $500,000 each in years 1 and 2; and $1.5 million in year 3.

Under the Second Option, Focus can earn an additional 9% interest in the Property by carrying out additional exploration work including a further 5,000 m of drilling and by completing a positive Preliminary Economic Assessment (“PEA”) as defined in National Instrument 43-101 (“NI 43-101”), for a total expenditure of at least $4.5 million by the fifth anniversary of the Agreement. Focus shall also be responsible for paying R$200,000 due to a third party upon the definition of a graphite deposit on the Property which qualifies as a mineral reserve under NI 43-101 and the approval thereof by the Departamento Nacional de Produção Mineral of Brazil (“DNPM”), whether such reserve is established during the Option Period or after Focus has exercised the First Option or Second Option.

If Focus elects not to exercise the Second Option, or elects but fails to exercise the Second Option, Lara and Focus will enter into the Joint Venture with Focus holding a 51% interest and Lara holding a 49% interest in the Property. If Focus exercises the Second Option, Lara and Focus will enter into the Joint Venture with Focus holding 60% interest and Lara holding 40%. Upon the execution of the Joint Venture Agreement, both Parties will proportionately fund the exploration program and the party holding majority interest will be deemed the operator of the Joint Venture. If a Party’s interest is reduced to less than 10%, its interest in the Joint Venture shall be converted into a 2% production royalty.

About Focus Graphite

Focus Graphite Inc. is an emerging mid-tier junior mining development company, a technology solutions supplier and a business innovator. Focus is the owner of the Lac Knife graphite deposit located in the Côte-Nord region of northeastern Québec. The Lac Knife project hosts a NI 43-101 compliant Measured and Indicated mineral resource of 4.972 Mt grading 15.7% carbon as crystalline graphite with an additional Inferred mineral resource of 3.000 Mt grading 15.6% crystalline graphite. Focus’ goal is to assume an industry leadership position by becoming a low-cost producer of technology-grade graphite. On October 29th, 2012 the Company released the results of a Preliminary Economic Analysis (“PEA”) of the Lac Knife project which demonstrates that the project has robust economics and excellent potential to become a profitable producer of graphite. As a technology-oriented enterprise with a view to building long-term, sustainable shareholder value, Focus Graphite is also investing in the development of graphene applications and patents through Grafoid Inc.

Forward Looking Statements – Disclaimer

This news release may contain forward looking statements, being statements which are not historical facts, and discussions of future plans and objectives. There can be no assurance that such statements will prove accurate. Such statements are necessarily based upon a number of estimates and assumptions that are subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected. Important factors that could cause actual results to differ materially from the Company’s expectations are in our documents filed from time to time with the TSX Venture Exchange and provincial securities regulators, most of which are available at Focus Graphite disclaims any intention or obligation to revise or update such statements.


Neither 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 adequacy or accuracy of this release.

Contact Information:

Mr. Gary Economo

President and Chief Executive Officer

613-691-1091, ext. 101

[email protected]

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