Focus Graphite Announces Additional Debt Financing Interest in Lac Knife

OTTAWA, ONTARIO--(Marketwired - Feb. 24, 2015) - Focus Graphite Inc. (TSX VENTURE:FMS)(OTCQX:FCSMF)(FRANKFURT:FKC) ("Focus" or the "Company") is pleased to announce that FLSmidth ("FLS") has expressed its formal interest to further evaluate the Company's Lac Knife Project in order to provide Focus with a "One Source" solution of engineering & technical services and supply of mineral processing equipment.

The initial set of Lac Knife mineral processing equipment being proposed by FLS bears a feasibility study level cost estimate of $12 million. The project scope may include a second component at a later date associated with dewatering, filtration, and conveyance equipment used for the de-watering and dry-stacking of tailings.

Focus included this revised tailings management system in the Environmental and Social Impact Assessment report filed in November 2014 in order to reduce the environmental footprint of Lac Knife's general site layout.

FLSmidth, is a Danish multinational global corporation with annual revenues in excess of 3.6 billion euros, and is a leading supplier of mineral processing equipment and mining services and is specialized in dry-stacked tailings management.

"FLS's Letter of Interest represents another significant potential financing option as the Company develops the Lac Knife Structured Project Financing," said Don Baxter, Focus Graphite President and Chief Operating Officer.

FLS has introduced the Lac Knife project to the Danish Export Credit Agency ("EKF") and the project may be eligible for EKF credit support. An EKF guarantee is backed by the Danish State, and as such, the EKF loan guarantee can be considered as AAA-rated. "Both parties are discussing this financing option with a view to achieving a mutually satisfactory conclusion."

"This potential debt facility represents 7% of Lac Knife's total project financing requirements, raising the total of potential vendor financing to approximately 20%. Terms of a debt facility are to be negotiated and a comprehensive disclosure will be released at a later date."

This announcement follows the Caterpillar Structured Finance announcement on January 6^th, 2015. Focus is continuing project-financing discussions with various stakeholders, investors, and institutional funds in both the public and private sector with the objective of minimizing shareholder dilution through a mix of debt and equity financing.