Focus and Lara Sign a Definitive Option Agreement for the Caninde
Graphite Project, Ciera State, Brazil
OTTAWA, ONTARIO -- (Marketwire) -- 01/14/13 -- 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 Caninde
graphite project located in Ceara 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
Caninde 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 Caninde 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 Producao 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
Cote-Nord region of northeastern Quebec. 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
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 www.sedar.com
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.
Mr. Gary Economo
President and Chief Executive Officer
613-691-1091, ext. 101
Press spacebar to pause and continue. Press esc to stop.