Focus Graphite Inc. Announces Strategic Offtake Agreements With Grafoid Inc. - Seite 2

Energy Offtake Agreement

Once the Lac Knife Project comes into production, the "Energy Offtake" is intended to supply Grafoid's needs for a range of next-generation graphene-based automotive batteries, batteries for consumer electronics, and energy storage applications. Customer requirements would come from Grafoid, its subsidiaries, acquisitions and/or joint venture partnerships.

Under the initial terms of the Energy Offtake agreement, Grafoid would pay Focus Graphite C$1 million over a 12-month period, with the first payment being on or before September 30, 2015, for the right of first refusal to purchase up to the annual maximum of 1,000 tonnes and would also give Grafoid the first right of refusal to extend and expand the offtake agreement for an additional 10-year period. The pricing for an additional 10-year period will be set at market price less 10%.

Pricing for the offtake is derived from the Technical Report on The Lac Knife Graphite Feasibility Study(3) for high-purity large flake (98.3% Ct) graphite concentrate which is US$1,910/tonne, minus 10%. Accordingly, Focus estimates that the Company could record approximately US$17.2 million in revenue under the first 10-year term of the agreement, if fully exercised.

^{(3) Prices from table 19.3, page 215, NI 43-101 Technical Report On The Lac Knife Graphite Feasibility Study, August 8, 2014, prepared in accordance with NI 43-101 by Met-Chem Canada Inc. Prices in the technical report were from an independent market study carried out by UK-based Industrial Minerals Data, on world supply and demand for flake graphite concentrate that provided a price forecast for the period 2014-2017.}

Polymer Offtake Agreement

Once the Lac Knife Project comes into production, the Polymer Offtake is intended to supply Grafoid's needs for a range of graphite-based polymer applications for the automotive and aerospace industry. Customer requirements would come from original equipment manufacturers (OEMs) and Tier 1 or Tier 2 suppliers. This area of commercial application development holds considerable promise for Grafoid as OEMs are looking for lighter and stronger composite materials to replace expensive carbon fiber and that ultimately reduce cost, increase fuel savings and build longer life into those components used in transportation industries.