Focus Graphite Announces Benchmark Feasibility Study Update for its Lac Knife Graphite Project, Québec Results position Focus Graphite as a potentially unique North American supplier of high-purity natural flake graphite concentrates for use in high-performance Li-Ion batteries
Focus Graphite Announces Benchmark Feasibility Study Update
for its Lac Knife Graphite Project, Québec
Results position Focus Graphite as a potentially unique North American supplier of high-purity
natural flake graphite concentrates for use in high-performance Li-Ion batteries
Kingston, Ontario, March 6, 2023 – Focus Graphite Inc. (OTCQX: FCSMF) (FRANKFURT: FKC)
(“Focus” or the “Company”) is pleased to announce the results of its Feasibility Study Update (“FSU”) for
the Lac Knife Project (the “Project”), its 100% owned, high-grade crystalline flake graphite deposit located
about 27 kilometres south-southwest of Fermont in the Côte-Nord administrative region of Québec. The
Project is located on the Nitassinan (ancestral lands) of the Innu community of Innu Takuaikan Uashat mak
Mani-utenam (ITUM).
The FSU was prepared by DRA Global Limited with assistance from various independent technical
consultants.
The FSU is based on a 27-year mine life and produced a Pre-tax Net Present Value (“NPV”) of $500.9
million calculated at a discounted cash flow (“DCF”) rate of 8%. Pre-tax, the financial model has an Internal
Rate of Return ("IRR") of 28.7% and a capital payback period of 2.8 years.
The after-tax financial model has an NPV of $285.7 million calculated at a DCF rate of 8%, and with an IRR
of 22.4% and a capital payback of 3.3 years.
Results from the FSU indicate that the Project is viable economically with a Base Case scenario that
includes a concentrator production line rate of 47,781 tonnes of flake graphite concentrate annually at an
average mill feed rate of 365,320 tonnes per year of Mineral Reserves over a 27-year mine life. A
concentrator availability of 93% was used for the FSU. The Project’s additional Measured, Indicated, and
Inferred Resources will continue to be evaluated to develop the mid- and long-term growth profile for the
Company.
Table 1 - Lac Knife Updated Feasibility Study Financial Highlights
Pre-Tax NPV @ 8% discount rate ($M CAD) $500.9
After Tax NPV @ 8% discount rate ($M CAD) $285.7
Pre-Tax IRR (%) 28.70%
After Tax IRR (%) 22.4%
Life of Mine (LOM) (years) 27
Pre-Tax payback period (years) 2.8
After Tax payback period (years) 3.3
Initial Capital Expenditure (Capex) ($M CAD) $236.5
Operating Expenses (Opex) (Average over LOM $M CAD) $25.9
Average sales price of graphite concentrate 2022 (USD/t) $1,679
Unless otherwise noted, all monetary figures presented herein are expressed in Canadian Dollars with a
USD/CAD conversion rate of 1.35.
Table 2 -Lac Knife Feasibility Study Operational Highlights
Annual average ROM to the concentrator (tonnes) 365,320
Annual average production of graphite concentrate (tonnes) 47,781
Mineral processing plant graphite recovery 86 to 91%
Cautionary Note: There is no certainty that the economic forecasts will be realized.
“This feasibility study update marks a new significant milestone in the development of the Lac Knife Project,”
said Marc Roy, President and CEO of Focus Graphite. “It confirms that the project hosts a graphite deposit
with an average graphitic carbon (Cg) grade of 99.7% in +80 mesh flake concentrate, which is exceptional
in this industry. With the FSU in hand, Focus is ready to take the next step, which is to complete the
environmental and social impact assessment (ESIA) study for Lac Knife and then move the Project through
the Québec Government environmental review and public consultation process towards mine permitting.”
Mr. Roy added, “During these next steps, we plan to continue to consult the Indigenous and other local
communities that could be impacted by the development of the project, to explain the results of the feasibility
study to them, to listen to their concerns and expectations, and to offer them an opportunity to participate
in project steering committees. We will also consult the Government of Québec about potential incentives
and initiatives that could help facilitate the development of the Project and achieve social acceptability,
particularly incentives provided under its Plan for the Development of Critical and Strategic Minerals 2020-
2025. At the same time, we intend to continue exploring the remainder of the Project for other significant
flake graphite occurrences.”
The FSU for the Lac Knife project comes at a time when interest in developing a secure, North American
source of high purity large flake graphite is on the rise. North American and European electric vehicle (EV)
markets are set to expand significantly over the next two decades in an effort to get road emissions to
carbon neutrality by 2050 and as governments enact industrial policies aimed at domestic development of
EV supply chains. Furthermore, new EVs will be powered by batteries that require significant amounts of
high-quality graphite.
The Project is designed as a stand-alone business operation to produce a line of high purity flake graphite
concentrates destined mainly for the North American and European battery anode materials industry and
for other specialty applications using natural flake graphite from Québec. The updated Project feasibility
study positions Focus to become a leading supplier of these graphite concentrates to EV battery
manufacturers.
Lac Knife is unique in that all natural flake graphitic concentrates produced with flake size above 200 mesh
(75 microns) size are more than 98% Cg. This allows Focus to divert finer sized products that would typically
be difficult to sell due to their flake size to higher value-added products such as spherical graphite for
batteries, due to the high carbon content of 98% carbon.
Although the Lac Knife mine will be a conventional open-pit mining operation using diesel-driven equipment,
Focus is determined to utilize all electric mobile equipment as soon as it becomes economically available*
in order to make the Project a carbon-free operation, powered by low-cost hydroelectricity readily available
in the area from Hydro-Québec*. In an effort to improve environmental mine safety, Focus is planning a dry
tailings system instead of the originally planned tailings pond and reclaim system along with new mitigation
measures designed to minimize the risks of acid mine drainage.
* Under NI 43-101 regulations, Focus cannot offset estimated costs in the FSU to include the proposed Canadian and
United States financing programs for critical minerals projects, nor the recently announced Canadian federal
government 30% tax credit on the purchase of electric mining equipment, both of which could significantly improve the
economics of the Project.
Technical Report
A technical report detailing the FSU and completed in accordance with National Instrument (NI) 43-101
guidelines, will be filed and available on SEDAR with 45 days of this release.
Updated Mineral Resources
The Updated Mineral Resource Estimate (MRE) prepared by DRA shows that the Lac Knife Project has
12.0 Mt of Indicated resources grading 15.34 % Cg for an estimated content of 1.7 Mt of in-situ natural flake
graphite, and 0.6 Mt of Inferred resources grading 16.90% Cg for an estimated content of 0.1 Mt of in-situ
natural flake graphite. A cut-off grade (COG) of 4% was used to determine the MRE as shown in Table 3.
This updated MRE follows infill and exploration drilling completed on the Project since the Feasibility Study
(FS), which was published in 2014. A total of seventy-five (75) holes, with a cumulative length of 11,204 m,
were drilled between 2014 and 2018, since the effective date of the previous MRE.
Of these 75 holes, a total of sixty-five (65) holes, for a total meterage of 8,072 m, were drilled in 2014, of
which twenty-six (26) holes were exploration holes and thirty-nine (39) were definition drilling to tighten up
the FS resource definition area. A total of ten (10) holes, for a cumulative length of 3,132 m, were later
drilled in 2018 to test the graphite potential in the deep western side of the open pit shell footprint as defined
in the 2014 Feasibility Study.
The MRE is based on the integration of geological, structural and grade information included in the resource
drill hole database received and recorded solely from diamond core.
Table 3: Updated Mineral Resources Statement (at 4.0% Cg Cut-Off)
Classification Tonnes
(Mt)
Graphitic
Carbon
(%)
Concentrate
(Mt)
Measured 1,2,3 ⁻ ⁻ ⁻
Indicated 1,2,3 12.0 15.34 1.7
Total Measured and Indicated 12.0 15.34 1.7
Inferred 1,2,3,4 0.6 16.90 0.1
1. Mineral Resources are inclusive of Mineral Reserves.
2. The Mineral Resources were estimated following the Canadian Institute of Mining, Metallurgy and
Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines
prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council
3. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.
The estimate of Mineral Resources may be materially affected by environmental, permitting, legal,
title, taxation, sociopolitical, marketing, or other relevant issues.
4. The Inferred Mineral Resource in this estimate has a lower level of confidence that that applied to
an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably
expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated
Mineral Resource with continued exploration.
5. Resources are constrained by a Pseudoflow optimized pit shell using HxGn MinePlan software. Pit
shell is defined using 45-degree slope, $CAD 1,475/t concentrate sales price, $CAD 5.91/t ore
mining costs, $CAD 34.42/t processing costs, $CAD 10.53/t G&A and $CAD 265.00/t for concentrate
transportation costs, 90.7% process recovery, 97.8%concentrate grade and an assumed 50,000 tpy
concentrate production.
6. The Effective Date is March 6, 2023.
7. Numbers may not add due to rounding.
Mining
The mining activities will be performed by open pit methods using a conventional shovel and haul truck
operation. The mining production schedule is based on one shift of 10 hours, 7 days a week. The mine life
is scheduled to be 27 years with total ore mined of 9,310,000 tonnes grading 14.97% Cg.
Updated Mineral Reserve Estimate
The open pit design includes 9,310 kt of Probable Mineral Reserves at a grade of 14.97% Cg. To access
these reserves, 4,719 kt of overburden and 19,073 kt of waste rock must be mined. This total waste quantity
of 23,775 kt results in a stripping ratio of 2.6 to 1. Table 4 presents the mineral reserves for the Lac Knife
deposit.
Table 4 – Updated Lac Knife Mineral Reserves
Category Tonnage
(kt)
Cg Grade
(%)
Proven - -
Probable 9,310 14.97
Proven & Probable 9,310 14.97
Notes:
1. Estimate of Mineral Reserves has been estimated by the Reserves QP.
2. The Mineral Reserves are reported in accordance with the CIM Standards on Mineral
Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing
Committee on Reserve Definitions and adopted by the CIM Council.
3. The effective date of the estimate is March 6, 2023.
4. Mineral Reserves are included in Mineral Resources.
5. Pit shell was developed using a 45-degree pit slope, concentrate sales price of $1,375$/t
concentrate, mining costs of $5.91 /t ore, $5.40 $/t waste, and 3.71$/t overburden, processing
costs of 34.42 $/t processed, G&A cost of $10.53 $/t processed and transportation costs of
265 $/t concentrate, 90.7% process recovery and 97.8% concentrate grade and an assumed
50,000 tpa concentrate production.
6. The Mineral Reserves are inclusive of mining dilution and ore loss.
7. The open pit Mineral Reserves are estimated using a cut-off grade of 5.1 % Cg.
8. The strip ratio for the open pits is 2.6 to 1.
9. The Mineral Reserves are stated as dry tonnes processed at the crusher.
10. All figures are in metric tonnes
11. Totals may not add due to rounding.
The pit optimization analysis was completed using the MSOPit module of HxGN MinePlan®. The optimizer
uses the Pseudoflow algorithm to determine the economic pit limits based on input of mining and processing
costs, and revenue per block. In compliance with NI 43-101 guidelines regarding the Standards of
Disclosure for Mineral Projects, only blocks classified in the Measured and Indicated categories drive the
pit optimization. Inferred resource blocks are treated as waste, bearing no economic value.
The pit that has been designed for the Lac Knife deposit is approximately 1,130 m long and 400 m wide at
surface with a maximum pit depth of 150 m. The total surface area of the pit is roughly 319,000 m 2. The
open pit design incorporates 10 m high benches and follows the pit slope recommendations from the 2014
geotechnical investigation.
Graphite Sales Price Assumption
The graphite concentrate sales price used for the FSU was established at US$ 1,679 /tonne which is a five-
year average as the projections over the life of the mine. The selling price was determined using pricing
information and calculations from the Benchmark Mineral Intelligence (Benchmark) Flake Graphite Price
Index. Benchmark is an independent credible source who compiles international graphite prices for various
commercial size fractions and concentrate purities. The Lac Knife graphite concentrate value was
calculated based on the weighted average of each size fraction and purity obtained during metallurgical
testing. Table 5 presents graphite concentrate values in US$ for various size fractions value obtained
through Benchmark Mineral Intelligence.
Table 5 – Price by Size Fraction
Size Fraction Weight
(%)
Purity
(%Cg)
Production
(tonnes
/year)
Average
Price
($US/t)
+48 mesh product 10.0 99.7 5,000 $2,040
-48+48 mesh product 23.0 99.7 11,488 $1,868
-80+150 mesh product 31.3 99.4 15,655 $1,762
-150+400 mesh product 31.3 97 15,638 $1,579
-400 mesh to tailings (not
in weighted average) 4.4 86.8 2,219 $0
Weighted Average 100 98.2 47,781 $1,679
Economic Evaluation
The capital cost estimate, summarized below, covers the development of the mine, ore processing facilities,
and infrastructure required for the Lac Knife Project. It is based on the application of standard costing
methods of achieving an FSU which provides an accuracy of ± 15 % and follows AACE Class 3 Guidelines.
The operating cost covers mining, transportation, processing, tailings and water management, general and
administration fees, as well as infrastructure and services.
The Capital Expenditures in Table 6 outline what is required to construct the mine, processing plant, power
line and all associated infrastructure that is estimated at a total of $236.5 million.
Table 6 – Lac Knife Capital Expenditure ($ CAN M)
Area
Initial Cost Sustaining
Cost LOM Cost
Mine Development 8.07 13.71 21.78
Mine Equipment and Facilities 19.66 6.11 25.77
Crushing and Concentrator 99.24 0.50 99.74
Tailings Management 22.73 30.21 52.94
Infrastructure 32.50 0 32.50
Indirect Costs 29.30 0 29.30
Contingency 25.00 0 25.00
Total Capital Expenditure 236.50 50.53 287.03
The operating cost per tonne of concentrate produced is $540.48 as indicated in Table 7. One key variable
that allows for low production costs is Lac Knife’s project location, which benefits from relatively easy access
to low-cost hydroelectric power from Hydro Québec at the intersection of the access road and Provincial
Highway 389.
Table 7 – Lac Knife Operating Expenditures (27 Year Average)
Area $/Tonne of
Concentrate
Mining 129.76
Processing Costs 310.56
Tailings Costs 4.38
General Administration Mine Site 95.78
Total Operating Costs 54 0.48
Next Steps
Work on the Environmental and Social Assessment (ESIA) study is scheduled to resume in March and be
completed by the end of 2023, while the Mine Closure Plan is planned for submission in the fall of 2023.
Focus continues to communicate, meet, and listen to local communities and will be stepping up these efforts
now that the feasibility study is completed, and the scale and impacts of the Project are better understood.
DRA’s financial model does not include potential value-added, purified, spheronized, and coated battery-
grade graphite in its financial and operational calculations.
The exchange rate used is $0.736 US Dollars per Canadian Dollar. Table 1 provides the Net Present Values
calculated at various discounted cash flow rates for the Base Case production scenario of 47,781 tonnes
of graphite concentrate produced annually. The financial analysis in the FS study used a five year average
price of US$1,679 per tonne, which is a weighted average for the various graphite concentrates that are
classified by flake size and valued by their carbon content.
Qualified Persons
The technical information within this news release was approved by Daniel Gagnon, P. Eng., Vice President
Mining, Ghislain Prevost, P. Eng., Lead Mining Engineer, Jordan Zampini, P. Eng., Senior Process
Engineer, and Claude Bisaillon, P.Eng., Senior Geotechnical Engineer, from DRA Global Limited, and all
individuals that are Qualified Persons (“QP”) under NI 43-101 guidelines and all independent of the issuer.
DRA consultant Schadrac Ibrango, P.Geo. (QC), PhD, MBA, is responsible for estimating the mineral
resources and has reviewed and approved the contents of this press release. Mr. Ibrango is a Qualified
Person ("QP"), independent of Focus Graphite, within the meaning of NI 43-101 – Standards of Disclosure
for Mineral Projects of the Canadian Securities Administrators.
Leon C. Botham, MSCE, P.E., P.Eng. (SK/BC/ON/NT/YT) from NewFields Canada Mining & Environment
ULC was responsible for the filtered tailings storage system as well as the water management system, and
has reviewed and approved the contents of this press release. Mr. Botham is a Qualified Person ("QP"),
independent of Focus Graphite, within the meaning of NI 43-101 – Standards of Disclosure for Mineral
Projects of the Canadian Securities Administrators.
Denys Vermette, géo. (QC)., M.Sc., M.Sc.A. from IOS Services Geoscientifiques was responsible for the
section on environmental studies presented in the Technical Report and has reviewed and approved the
contents of this press release. Mr. Vermette is a Qualified Person ("QP"), independent of Focus Graphite,
within the meaning of NI 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities
Administrators.
Mr. Marc-André Bernier, géo. (QC), P.Geo. (ON), M.Sc., Senior Geoscientist for Table Jamésienne de
Concertation Minière, a consultant to the Company and a Qualified Person (“QP”) as defined under NI 43
– 101 Standards of Disclosure for Mineral Projects has reviewed and approved the non-technical content
this news release.
About DRA Global Limited
DRA Global Limited (ASX: DRA | JSE: DRA) (DRA) is a multi-disciplinary consulting, engineering, project
delivery and operations management group predominantly focused on the mining and minerals resources
sector. DRA has an extensive global track record, spanning more than three decades and more than 7,500
studies and projects as well as operations, maintenance, and optimisation solutions across a wide range
of commodities.
DRA has expertise in mining, minerals and metals processing and related non-process infrastructure
including sustainability, water and energy solutions for the mining industry. DRA delivers advisory,
engineering and project delivery services throughout the capital project lifecycle from concept through to
operational readiness and commissioning as well as ongoing operations, maintenance, and shutdown
services.
DRA, headquartered in Perth, Australia, services its global customer base through 20 offices across Asia-
Pacific, North and South America, Europe, Middle East, and Africa.
About Focus Graphite
Focus Graphite Inc. is an exploration and development company that seeks to produce flake graphite
concentrate at its wholly owned Lac Knife and Lac Tétépisca flake graphite projects located in the Côte-
Nord administrative region of Québec. As part of its mission to build long-term, sustainable shareholder
value, Focus is also evaluating the feasibility of producing value-added specialty graphite products,
including battery-grade spherical graphite. Focus Graphite is a technology-oriented graphite development
company with a vision for building long-term, sustainable shareholder value. Focus also holds an equity
position in graphene applications developer Grafoid Inc. Focus is committed to operating in a socially,
environmentally and ethically responsible manner.
For more information about Focus Graphite and the Company’s Lac Tétépisca and Lac Knife projects,
please visit Focus’s website at www.focusgraphite.com or contact:
Kimberly Darlington
Communications, Focus Graphite
Judith Mazvihwa-MacLean
CFO, Focus Graphite
(613) 581-4040
Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of
the TSX-V) accepts responsibility for the adequacy or accuracy of this news release.
Forward-Looking Statements
This press release 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, including references to the plans and project of the Company such as proceeding with
production at the Company’s Project, proceeding with permitting and environmental studies at Lac Knife,
and other plans outlined in this press release. Generally, such forward-looking information can be identified
by the use of forward-looking terminology such as “potential”, “high-potential”, “expected”, “optimistic”,
“looking forward”, “moving forward”, or variations of such words and phrases or state that certain actions,
events or results "may", "could", "would" or "might". Forward-looking information is subject to known and
unknown risks, uncertainties and other factors that may cause the actual results, level of activity,
performance or achievements of the Company to be materially different from those expressed or implied
by such forward-looking information, including but not limited to: (i) volatile stock price; (ii) the general global
markets and economic conditions; (iii) the possibility of write-downs and impairments; (iv) the risk
associated with exploration, development and operations of mineral deposits; (v) the risk associated with
establishing title to mineral properties and assets; (vi) fluctuations in commodity prices; (vii) the risks
associated with uninsurable risks arising during the course of exploration, development and production;
(viii) competition faced by the issuer in securing purchasers, off-taker markets, clients and experienced
personnel and financing; (ix) access to adequate infrastructure to support mining, processing, development
and exploration activities; (x) the risks associated with changes in the mining regulatory regime governing
the issuer; (xi) the risks associated with the various environmental regulations the issuer is subject to; (xii)
risks related to regulatory and permitting delays; (xiii) risks related to potential conflicts of interest; (xiv) the
reliance on key personnel; (xv) liquidity risks; (xvi) the risk of litigation; and (xvii) risk management.