FOCUS METALS
Think Graphite Today
Think Graphene Tomorrow
Disclaimer
This presentation 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 www.sedar.com. Focus Metals disclaims any intention or
obligation to revise or update such statements.
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Introduction
Gary Economo
President and CEO of Focus Metals.
• What we are doing and why we are committing our resources and
energy to developing the company
• Why stakeholders are investing in us . .. and what that means in the
future for investors, partners and customers
• We are involved in the development of two world-changing elements
from a single source…
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Graphite Introduction Key
Points
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Rapidly improving pricing environment for Graphite, due to China supply
constraints and increasing demand
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100% owner of the Lac Knife Graphite Deposit, Quebec
– Highest known grade, large flake, graphite deposit known globally
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Excellent infrastructure in great jurisdiction
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Potential for accelerated development and low cost production
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Upcoming NI 43-101 resource and updated scoping study (End 2011)
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Ongoing off-take agreement discussions
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Graphene joint venture – patents, new discoveries and I/P, develop and
commercialize graphene applications.
Two World Changing Elements
Graphite
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In today’s world graphite is a critical
strategic material
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Has been called “the new silicon” - it will
change the way we work and live
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Importance will grow with green
technologies
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The Noble Prize in Physics for 2010 was
awarded to two Russian scientists for their
work in developing graphene
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10-20x more graphite in a li-ion battery than
lithium
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It is an allotrope of graphite (where the
carbon atoms are similar but bonded
differently). Structure is one-atom-thick
planar sheet
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Its properties are revolutionary
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Breaking strength 200x greater than steel
and tensile strength of 19,000,000 psi
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Its applications are profound
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Demand will outstrip supply
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Just for one market – EV cars – demand by
2020 will require more than is produced
globally today.
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Graphene
Then you’ve got the electronics market,
nuclear energy. . . . and Graphene . . . .
The Company
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Focus Metals was formed in early 2010 and market listed in July 2010
Trades on the TSX:V as FMS and in the US through the OTCQX as FCSMF
Began trading at $0.06, reached a high of $1.78 in March 2011,
In April 2011 raised $20m in a bought deal offering
Focus has three properties in its portfolio: our crown jewel - Lac Knife
graphite property, Kwyjibo (REE-neodymium + Copper) and our Labrador
Trough properties (IOGC)
Lac Knife – currently evaluating an expanded drilling program
An updated NI 43-101 will be completed Q4 and scoping study Q1 2012
Kwyjibo – we are embarking on a drilling program after confirming historical
REE results which were published in February (2.4% TREO over 30, 20%
Nd)
Lac Knife property has a proven history
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Project was discovered nearly 25 years ago in a JV between Mazarin Inc. and the town of
Fermont, Que
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Drilling program in 1990 confirmed 8.1m/t grading 16.7% graphite. Two feasibility studies were
conducted for mine development
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Commodity prices went into recession and the project lay dormant for 10 years
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In 2001, Graftech and Ballard Power Systems were looking for graphite for fuel cell batteries in a
JV they had established
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Strathcona Mineral Services did a worldwide search on their behalf and selected Lac Knife as
having the best source of graphite for fuel cell technology
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Again the project sat dormant for a number of years: both Ballard and Graftech suffered corporate
set-backs and Mazarin was purchased by IAMGOLD
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In 2010, Focus Metals acquired Lac Knife from IAMGOLD and began development
Graphite Production
1.1 MM tonnes global graphite consumption
(2009)
~50% natural (mined) graphite
~50% synthetic (manufactured) graphite
India
12%
Brazil
7%
Korea
3%
Synthetic graphite 4 – 5x more expensive than
natural graphite
Only substitutable in certain applications
China is the largest producer of graphite
globally
Majority of production is small flake, low
grade
(2% - 6%) and high cost
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Sources:
- Graphite Market Review; Merchant Research & Consulting, Ltd.; 2010
- AMG Advanced Metallurgical Group
- USGS 2009
Canada
2%
China
71%
Norway
1%
Others
4%
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Graphite Consumption
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Graphite is largely used in steel refining,
foundries, and lubricants
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Other uses of graphite include:
– Batteries
• 20x more graphite than lithium in a
lithium battery
• ~37,000 tonnes consumed in 2010
• ~170,000 tonnes forecast in 2015
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Electronics
• Used for heat dissipation in
electronics
• One IPAD consumes 4 sheets of
graphite
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Latest generation nuclear reactors
• Graphite coolant replacing water
based designs
Sources:
- Graphite Market Review; Merchant Research & Consulting, Ltd.; 2010
- AMG Advanced Metallurgical Group
- USGS 2009
Refractory
24%
Other
58%
Foundry
8%
Brake Linings
7%
Lubricants
3%
Graphite Prices
Types of Natural Graphite
Small Flake (94 – 97%)
$1,800
Medium Flake (94 – 97%)
$1,800 - $2,300
Large Flake (94 – 97%)
$2,000 - $2,500
Large Flake (99.9%)
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Average Price ($/tonne March 2011)
Sources:
- Graphite Market Review; Merchant Research & Consulting, Ltd.; 2010
- Industrial Minerals (indmin.com)
- Independent research estimates
$20,000 - $40,000
What Makes a Good Graphite Deposit?
• There are three key factors for graphite deposits:
1) Flake size
2) Grade
3) Purity
• Flake graphite is a naturally occurring form of graphite that is
typically found as discrete flakes ranging in size small, medium and
large mesh
– Large flake size is needed for high purity graphite
• The Lac Knife deposit has a good distribution of large flake graphite
at an average grade of 16.7% (non NI 43-101 compliant)
– Highest known graphite deposit grade in the world
– Other known global deposits are below 10% and are typically in the 2 6% range
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Lac Knife Graphite Deposit
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8.1 million tonnes grading 16.7% graphite, historical resource (non NI 43101 compliant)
– Highest known graphite deposit grade in the world
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High value, large flake deposit
– Flake size distribution is 41% 35 -100 mesh, 35% 150 -200 mesh and 24% is 200+
mesh
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7,600 metres exploration drilling completed historically
– Deposit extends over 600 metres in length, strikes north-south and dips steeply to the
west
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Averages 20 metres width but may reach up to 100 metres in the nose of folds
– The deposit remains open to the south and at depth
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Excellent infrastructure
– Quebec grid power - ~$0.05 per kWh
– Near rail, port, and over 12,000 people in neighbouring towns
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Wealth of mining talent and infrastructure located in the region
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Fermont, Wabush, and Labrador City serve as a base of operation for three iron-ore miners (Quebec
Cartier Mining, the Iron Ore Co. of Canada and Wabush Mines)
Focus Metal Property Overview
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Lac Knife Property Map
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Lac Knife Site
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Lac Knife Preliminary Development Plan
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Feasibility studies previously completed
(pre NI 43-101)
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Mazarin (1990) and Cambior updated in
(2000)
Targeting ~20,000 tonnes annual
production (95% - 97%)
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Cash costs expected to be ~$350/t
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Potential to add ~3,000 tpa high purity
(99.99%) graphite
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99.9% and 99.99% purity graphite needed
for battery use
Sells for an average of $20,000 up to
$40,000 per tonne depending on customer
specific requirements
Simple graphite ore processing
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Versus $800 to $1,500/t for most
competitors
Crushing, flotation, screening, drying, and
bagging
Conceptual Mine Plan
Resource (Historical):
Production Start:
Mining Method:
Strip Ratio:
Mine Life:
Grade (Historical):
Production:
Total Cash Cost:
Selling Price:
6 metres average overburden thickness
<2 : 1
40+ years
16.7%
~20,000 t (95% – 97% purity)
~3,000 t (99.9% purity)
~$350/t (95% – 97%)
~$1,300/t (99.9%)
$2,000 – $2,500/t (95% – 97%)
$20,000 – $40,000/t (99.9%)
Revenue
Potential:
$40+ MM (95% - 97%)
plus, $60+ MM (99.9%)
EBITDA Potential:
$30+ MM (95% - 97%)
plus, $55+ MM (99.9%)
Initial Capex:
~$65 MM (95% - 97%)
plus, ~$10 MM (99.9%)
Pit limits extend to 125 metres depth
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8 MM t @ 16.7%
2014
(potential to accelerate)
Open pit
Source: Independent research estimates
Note: non NI 43-101 compliant
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Lac Knife Development Timeline
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Fast track permitting potential
– Biodegradable commodity and relatively benign milling process;
– Located in a mining friendly jurisdiction
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Potential to skip feasibility study
– Two feasibility studies historically completed
– Simple mining and processing requirements
Capitalization
Ticker:
Basic Shares Outstanding:
Options Outstanding:
Warrants Outstanding:
87 MM
3 MM
12 MM
($0.35/share, 2012 expiry)
Market Capitalization (F/D):
~C$87 MM
Cash & Equivalents:
~C$22 MM
Debt:
Enterprise Value (F/D)):
Insider Ownership
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TSXV:FMS
$0
~C$100 MM
~25%
Key Management & Board
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Jeffrey York,
Chairman of the Board
Former President and COO of Giant Tiger stores
Gary Economo,
President, CEO, Director
Over 30 years high tech experience, including as President and CEO of SPI technologies selling graphite
products
Marco Gagnon,
VP Exploration, Director
Former President of Quebec Mining Association
President of Adventure Gold
Francis Pomerleau,
Director
Senior VP of Pomerleau Inc. a Quebec based construction company that builds many of the
infrastructure projects in Northern Quebec
Judith Mazvihwa-MacLean,
CFO
CMA and geologist with eight years accounting experience in the mining sector
Tony Brisson
Senior Geologist
25 years geology experience, heavily focused in Quebec and extensive work with graphite deposits
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TBA – VP Exploration and Engineering
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Potential Upside
Graphene
• Occurs naturally in graphite, has unique physical properties
and might be one of the strongest substances known
– 200x stronger than steel and so thin that it is transparent
• The process of separating it from graphite will require some
technological development before it is economically feasible
to use it in industrial processes
– Focus is a 50% shareholder in a new Joint Venture to develop
and acquire patent applications, secure intellectual property and
develop graphene applications
Kwyjibo Project
• Rare Earth Elements and Iron Oxide, Copper, Gold (IOCG)
Deposits
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Graphene
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Graphene Applications
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Avionics applications
Bio Devices
Anti-Bacterial Applications
Ultra Capacitors
Transistors
Solar Cells
Semiconductors
Flexible and Foldable Displays
Military Applications
Infrastructure
Entertainment
Dr. Gordon Chiu - Chief Scientist
Focus Metals is 50% shareholder in a new
Joint Venture which is headed up by Dr.
Chiu
The JV will develop and acquire patent
applications, secure Intellectual property
and develop applications for Graphene
used in the mentioned areas
Dr. Gordon Chiu has 15 years combined
experience in biomedical, chemical,
cosmetic, medical and technology
industries, he started his career as a
research scientist with Pfizer Inc. and
Merck & co.
B.S. Degree summa cum laude in
chemistry from Rensselaer Polytechnic
Institute and a M.S. degree in chemistry
from Seton Hall University
Summary
To take advantage of the situation:
• We hold a world class graphite property
• We hold another property with significant copper potential and one
of the two needed REEs
• We’ve no debt, money in the bank, and financing options for mine
development
• We’re in a mine friendly jurisdiction and the Government is our
partner
• Technological innovation is moving our way
• Strategic global forces favor our advancement
• And the economics couldn’t be more attractive
• Rising demand and prices
• Low production costs because of “Factor 17”
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Conclusion
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I indicated at the start that Focus was not a normal mining company because we
were involved in the development of two world changing elements
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Graphite and graphene . . . . and we are also bring neodymium and copper to the
table
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Our key focus at the moment is our Lac Knife property development, but we are
looking at ways to unlock the potential of Kwyjibo and moving that project forward as
well
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We look forward to the challenge before us and hope you will join us in our journey.
Thank you.
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Gary Economo gary@focumetals.ca
Tel: 613-691-1091 Ext. 101