AGORACOM Small-cap Investor Relations Blog

The Following Story Was Produced By MetalsNews.com

Gary Economo, CEO of Focus Metals

Focus Metals Inc. (V.FMS TSX-V), with rare earth elements and extensive deposits of flake graphite is pursuing production to bring their high quality graphite project to market.

The Company is a mid-tier, junior explorer and producer of critical technology rare earth elements and flake graphite from its two Quebec-based resource properties.

Both mineral assets – with graphite at the pre-development stage – hold the potential for rapid growth as current and anticipated global industrial demand outpaces supply. China’s recent moves to restrict supplies figure prominently in Focus’ development planning.

“As someone with a high technology background, a natural fit exists in management terms with our industrial minerals and minerals that are used in high-tech applications, especially in the nuclear energy, steel and automotive industries,” said Gary Economo, CEO of Focus Metals.

He said while there are numerous graphite deposits throughout the world, few if any compare to Focus Metals’ unique, Lac Knife, Quebec resource. The problem is that less than a handful exist as a source for technology-grade demand.

“The benefit to us, our investors, financial backers and operating partners is that our Lac Knife property holds one of the richest, purest graphite sources in the world,” Mr. Economo said in an interview with us recently in Vancouver.

“Most global producers hold amorphous graphite which is used in other applications like skis and tennis raquets, but large flake graphite, which Lac Knife holds in abundance is needed for high-tech applications,” Mr. Economo added.

For example, large flake graphite is used in the production of lithium ion batteries

Having an abundance of the large flake graphite is what has made Mr. Economo and his management team excited about the Lac Knife deposit.

“We were quite fortunate with the Lac Knife deposit as it starts at a 17% concentration, where in China, for example, they generally have a concentration of 3% to 4%.”

Focus Metals acquired Lac Knife after a string of companies had owned it, but never developed it. Mr. Economo explained: “Mazarin Inc., in partnership with the Quebec government found the graphite deposit and almost brought it into production until the prices of graphite plummeted.

“Ownership passed on to several companies with no interest in graphite until Focus Metals Inc. purchased it in mid-2010,” he said. “We’ve been moving toward production since then.”

Why Graphite?

Graphite is used in a variety of high-tech applications, which makes its future demand likely for growth.

“Traditionally, graphite has been used for the refractory industry and the steel industry, because it has such a high temperature tolerance. Graphite is electrically conductive, it’s thermally conductive, and it is actually very, very strong,” Mr. Economo said.

“Graphene, if you’ve been following events in physics during the last five years, is a product of flake graphite at the molecular level. Its some 200 times stronger than steel and is also remarkably conductive at room temperature

“As an example, because graphite’s thermal properties, what happens is that nuclear reactors operating around the world will use tons of graphite as a neutron moderator at extremely high temperatures versus the heavy water-moderated reactors we use in Canada,” Mr. Economo said.

Another application in the high-tech industry is with electronics such as the iPad. The iPad has more computing power than a typical PC, yet it features a paper-thin design. According to Mr. Economo, that is because of the use of graphite.

“The reason is that they use sheets of graphite to spread and remove the heat from sensitive components without fans,” he said.

With the high-tech industry currently looking for more portable products, graphite is sure to continue to be a needed item in production.

Other areas of application for graphite are in anodes and in automotive graphite ion batteries. Right now, Mr. Economo believes there is insufficient high-grade graphite to satisfy growing demand.

“Over the next few years, the automotive industry will require a few more deposits like Lac Knife with the levels of graphite needed for lithium ion batteries, as some 20 times more graphite is required in a lithium battery than lithium.”

With that growing need, Focus Metals Inc. is positioned to take advantage of the growing demand in the automotive industry as well as in high-tech.

Other Graphite Applications & Investor Outlook

Currently, Focus Metals Inc. is working toward production on the Lac Knife project.

Mr. Economo said: “Our graphite project has gone through the feasibility stage and is almost ready to go into production. So, we can actually put this project into production in a very short period of time.”

The benefit of working in mining-friendly Quebec, Mr. Economo said, is that it makes moving forward “easier than in some other provincial jurisdictions.”

Graphite is one of two minerals Focus Metals Inc. plans to develop.

“As a company, we have two key strategic resources – rare earth elements in addition to graphite, Mr. Economo said.

Focus Metals Inc. holds 50 million (fully diluted ) and closely-held shares.“We have a $26 million market capitalization and a 50-cent share price at this time,” he said.

And Mr. Economo considers his company to be undervalued by the market relative to its international competitors.

Focus Metals Current and Future Status

Recognizing the need for graphite and moving forward on their projects is key to the future of Focus Metals Inc., Mr. Economo said.

“We’re in the middle of a graphite scoping study right now. We do have a pre-43-101 resource calculation which indicated a deposit of more than eight million tons. The distribution is approximately 30% small, 33% medium and 33% large flake.

“In current terms, we’re sitting on a $2.2 billion resource. And we’re just about to complete drilling that will bring Lac Knife to 43-101 resource conformity,” Mr. Economo said, adding that Focus Metals will need to invest approximately $65 million to process its ore.

Focus Metals is actively moving forward into an area that most other companies aren’t – rare earth elements, especially neodymium, and graphite. And with growth in future needs for large flake graphite for industrial and high-technology graphite, Focus Metals Inc. is well-positioned to exploit that demand.

For More Information, Please Contact

Gary Economo –

President & Chief Executive Officer

613-691-1091 • Ext.101

[email protected]

http://www.focusmetals.ca/