FMS: TSX-V

Top 5 Reasons to Own Focus Graphite

1. The company has two properties each containing a strategically important mineral – graphite and neodymium – needed for green initiatives and U.S. national and industrial security.

2. The Lac Knife graphite property has a proven history. Nearly developed in the early 2000s in a joint venture between Graftech and Ballard Power Systems, previous studies are being recast to NI 43-101 standards, and discussions with funding and/or development partners are currently underway.

3. The Kwyjibo REE property has as a strategic partner in the government of Quebec. SOQUEM, the wholly owned subsidiary of SGF, an industrial and financial holding corporation of the government of Quebec, holds 50% of the Kwyjibo property. SOQUEM/SGF are known for their long-term vision and successful development within the Quebec economy.

4. Market applications favour the company. Incremental demand for graphite and neodymium will be driven by green initiatives. Li ion batteries, fuel cells and magnet demand in the next five to seven years have the potential to consume more graphite than all current uses combined. Neodymium is one of three REEs projected to be in deficit supply.

5. Supply conditions favour the company. China controls the current global market in graphite and in REEs. Over 80% of the world’s graphite is produced in China and over 95% of the world’s REE production is in China. China is restricting supply and controlling and manipulating the price.

RECENT HIGHLIGHTS:

The company recently reported pilot plant test results from its flagship Lac Knife high grade flake graphite project located in the Grenville Geological Province of northeastern Québec. This work was performed as part of the ongoing Lac Knife concentrator flowsheet design process. The graphite concentrates generated from the pilot flotation plant will be subjected to further purification tests as part of ongoing metallurgical studies.

Highlights:

• The average grade of the coarse size fraction (+ 80 mesh) was 98.3% Total Carbon* ("Ct") compared with 97.4% Ct in the Phase 2 Locked Cycle Tests** ("LCTs")
  
  
• The average grade of the medium size fraction, less than 80 mesh and greater than 150 mesh in size, was 98.2% Ct compared with 97.4% Ct in the Phase 2 LCTs
  
  
• The average grade of the size fraction greater than 200 mesh was 98.0% Ct compared with 97.2% Ct in the Phase 2 LCTs
  
  
• The average carbon content of the pilot plant campaign was 96.6% Ct compared to 96.4% Ct reported in the Company's July 9, 2013 press release on the final results of the Phase II LCTs. It is important to note that these results were achieved despite the fact that the less than 200 mesh fraction was not subjected to another cleaning circuit in the pilot plant run as was done in the LCTs, meaning the carbon content of the overall sample would likely have been even higher.
  
  
• These results indicate that all three concentrate size fractions may be easier and more cost effective to beneficiate into technology grade graphite due to the high grade carbon content obtained from the pilot plant testing. Higher concentrate grades translates into reduced levels of impurities that have to be removed in the thermal or hydrometallurgical purification processes.

Lac Knife – PEA

This update is based on improved metallurgical results of the recent Pilot Plant test campaign using an optimized flotation and polishing circuit conducted at SGS Lakefield and announced on August 21^st, 2013.

The increase in concentrate grades and associated economic results were updated in the project cash flow summary and were validated by RPA Inc. in consultation with Soutex Inc. of Quebec City. Inputs updated in the financial model included: final concentrate average grade increase from 92% Ct to 96.6% Ct within the new flake size distribution categories, a reduction in operating cost by $367 per tonne milled, due to the elimination of the need to purify the concentrate by a third party and the associated $27,600,000 in working capital requirements. Pricing is based on "run-of mine" prices, without the value added price used in the original PEA financial model. The original report was filed on October 29^th, 2012.

The Lac Knife project has a pre-tax internal rate of return ("IRR") of 36.4% (28.6% after tax) and a pre-tax net present value of $ 316.9 million ($185.3 million after tax) in the base case using a weighted average price of US$1866 per tonne of run-of-mine concentrates. The cost of production is $458 per tonne of concentrate.

Highlights are summarized below:

Operational Highlights:

• Open pit mine life is 20 years, at 300,000 tonnes per year.
• Life of mine production of 6.0 million tonnes (Mt) of mill feed at a grade of 15.66% graphitic carbon (Cgr), based on the initial Mineral Resource Estimate* disclosed on January 19, 2012
• Processing includes crushing, grinding, flotation, magnetic separation, thickening and drying of run of mine to produce 44,300 tonnes of concentrate per annum (tpa), a reduction of 2,300 tonnes of concentrate is essentially due to the higher concentrate grade.
• Sustaining capital average is $996,300 per year
• Life of mine project production of 880,877 tonnes of concentrate at 96.6% Ct

Kwyjibo Property

The 2012 exploration program at Kwyjibo comprised of surface showing and trench re-sampling, core drilling and ground geophysical surveying.

Highlights of the Josette showing and trench re-sampling program include:

• Josette showing: 2.95% TREO, 37.35% REOc* and 1.44 % Cu over 10 m, including a high-grade sub-zone of: 4.59% TREO, 35.58 % REOc*, and 2.62 % Cu over 2m.

• Trench TR-95-30: 4.13% TREO, 36.08% REOc* and 0.23 % Cu over 2 m.

• Trench TR-95-29: 3.58% TREO, 39.90% REOc*and 0.17% Cu over 1.5 m.

Lac Tétépisca property

Focus Graphite Inc. announces the discovery of a new graphite bearing corridor on the Company’s 100%-owned Lac Tétépisca property located to the southwest of the Manicouagan reservoir, 234 km north-northwest of Baie-Comeau, Québec.

• Bedrock sampling has resulted in the identification of a 900 m long by up to 100 m wide graphite bearing corridor on the Property
• 25 grab samples define the graphitic corridor
• 17 of which host graphitic carbon* (Cgr) grades in a range or 5.59% – 45.80% Cgr.
• 8 grab samples which delineate the graphitic trend show Cgr grades below 5.00%

Guinécourt Property

The company reported the final assay results from the summer 2012 reconnaissance exploration program.

A total of 32 grab samples were collected from historical and new graphite-bearing outcrops related to the Graphi-Centre showing area. Twenty-one (21) of the samples returned high-grade graphitic carbon (Cgr*) assays ranging from 6.36% to a high of 45.90% Cgr (high-grade assays are defined as greater than 5% Cgr; Table 1). The historical Graphi-Centre showing was formerly part of the Lac Guéret-Sud property of SOQUEM Inc.-Quinto Technology Inc. Numerous graphite-bearing outcrops showing potential for significant lateral continuity and width are recorded within the 2 km by 3 km area hosting the showing.