Focus Metals Inc. is an emerging, mid-tier junior mining company and owner of the high-grade Lac Knife crystalline flake graphite deposit. The Company is fast-tracking the exploration of Lac Knife with the aim of developing and becoming the world’s lowest cost producer of technology grade graphite.

Focus is led by a management and technical team with extensive exploration and mine production experience, who aim to acquire and develop advanced stage industrial minerals projects.

The Lac Knife graphite deposit is located 35 kilometres south of Fermont, Quebec, and contains a historic non NI43-101 compliant resource of 8.1 million tonnes grading 16.7% graphite, making it the highest grade graphite resource in the world. The deposit absorbed 7,600 metres of historic exploration drilling that defined mineralization over 600 metres of strike, and averaged 20 metres in width, and remains open to the south and at depth.

The area hosts excellent infrastructure, with cheap Quebec electric grid power, and nearby access to road rail and port facilities. Lac Knife is also close to the towns of Fermont, Wabush and Labrador City that serve as a base for three iron ore mines in the area.

The current historic resource was discovered and defined by Mazarin Mining in 1989 to 1990. The deposit carries a very shallow overburden of about 6 metres and a strip ratio of about 1: 1. Feasibility studies were completed, but the project never went into production because the economy went sour and graphite prices crashed.

In 2001, Graftech established a joint venture with Ballard Power Systems to develop a new fuel cell application, and considered mining graphite from Lac Knife because of its extremely high grades. The venture fell apart after Ballard experienced financial difficulties and the Chinese dumped graphite on world markets that depressed pricing.

Focus happened to be in the right place at the right time, and acquired Lac Knife from IAMGOLD in 2010, who sold it as it was a non-strategic asset.

Focus updated historic feasibility studies completed in 1990 and 2000 for a conceptualized mine plan with an annualized production rate of 20,000 tonnes of graphite flake grading 95% to 97%. They noted that the very high grade resulted in a cash cost of around $350 per tonne, whereas competitors recorded typical cash costs of $800 to $1,500 per tonne, and reported sales of $2,000 to $2,500 per tonne. Lac Knife has additional potential to produce around 3,000 tonnes per year of high purity graphite grading 99.9% at a cash cost of $1,300 per tonne. This high purity graphite sells for $20,000 to $40,000 per tonne, and is produced to specific customer requirements that are mostly required for battery manufacture.

Ore will be sourced from a shallow, low cost, open pit with a maximum depth of about 125 metres, with a simple process route that involves crushing, floatation, screening, drying and bagging. Capital costs are estimated at around $55 million to produce 20,000 tonnes per year of graphite, and an additional $10 million to produce an extra 3,000 tonnes per year of high purity graphite. Mine life is estimated at more than 40 years.

Annualized revenue potential is estimated at $40 million for sale of 20,000 tonnes of 95% to 97% graphite, and an additional $60 million for 3,000 tonnes of 99.9% purity graphite, for an annualized total of $100 million.

Potential annualized EBITDA is estimated at $30 million for 95% to 97% graphite, and $55 million for 99.9% purity graphite.

This conceptual study produces a total annualized EBITDA that may reach as high as $85 million on a capital commitment of $65 million, requiring a payback of less than 12 months, and attests to the high returns that Lac Knife may be capable of generating.

Lac Knife is currently at the pre-development stage but Focus plans to fast track development and commence annualized production of 20,000 tonnes of 95% graphite in 2013, and commission a secondary enrichment and refining facility capable of producing an additional 3,000 tonnes per year of 99.9% graphite in 2014.

The Company has retained Roscoe Postle Associates to prepare mine design and engineering for Lac Knife, and is headed by Marc Lavigne, who was a key member of the team that completed the first feasibility study in 1989 for Mazarin Mining. The program will cover open pit design, ore production, processing, transportation and infrastructure, administration and mine and environmental management.

Current plans call for new drilling at Lac Knife using large bore machines for testing depths between 250 and 350 metres, which is twice as deep as historic drilling and will probe for additional resources to the south of the currently defined ore body.

Large bore drilling will also provide significant quantities of graphite samples for evaluation by potential off take partners in the United States, Europe and China. Theses samples will be processed to purities of 95% and 99.9% and delivered to meet end user specifications.

Discussions are underway with potential financial backers, production joint venture partners, global distributors, local Innu councils, and governmental authorities for approval and upgrading of infrastructure requirements.

Global consumption of graphite reached 1.1 million tonnes in 2009, with 50% of production coming from mines and 50% from synthetic sources, which are 4 to 5 times more expensive to produce than natural graphite. Graphite is used in steel refining, foundries, lubricants electronics such as IPAD’s and batteries.

Focus Metals intends to become a global consolidator of graphite production through domestic and international expansion and acquisitions.

Demand for technology-grade graphite is anticipated to grow from battery manufacturers worldwide, but particularly in the United States where the number of electric vehicle battery makers has reached the 50% level, pushing out international suppliers.

Lithium Ion batteries require 20 times more graphite than lithium and consumed 37,000 tonnes of graphite in 2010, with demand expected to reach 170,000 tonnes in 2015. Latest generation nuclear reactors also operate with graphite coolant, which replaces water and becomes very relevant in a post Fukushima nuclear world.

Focus is also developing the Kwyjibo rare earth and copper project in a 50/50 joint venture with Soquem. The property is located 10 kilometres north of Lac Manitou, Quebec, and sits within a trend that contains rich IOCG mineralized zones. The property contains significant quantities of neodymium, rare earths and a copper discovery, with the next round of assay results expected in late 2011 or early 2012.

Properties are also held in the Ungava Labrador Trough region of northern Quebec. This includes 13 areas that cover 668 square kilometres that hold potential for gold, platinum, palladium, copper, zinc, and nickel.

Market interest in Focus will remain centered on development of Lac Knife, and assuming that the Preliminary Economic Assessment backs up earlier conceptual studies will provide Focus with a very bullish future.