Québec Shows Support for Focus Graphite
Focus Graphite Presents at the Québec Government’s Relaunch of the Plan Nord
The Québec Government’s revival of its 20-year economic and social development blueprint for Northern Québec — Plan Nord — bodes well for Focus Graphite Inc. shareholders as we prepare to move into the final stages of financing discussions for our Lac Knife Project.
Focus Graphite President and Chief Operating Officer, Donald Baxter and Vice President, Project Development, Jeff Hussey present at the relaunch of the Plan Nord in Montréal (photo: Focus Graphite Inc.)
Focus Graphite was honoured by the invitation to present alongside Osisko Gold Royalties and Glencore Plc at the Québec Government’s relaunch of Plan Nord in Montréal, following a day hosted by Québec Premier Philippe Couillard. The two-day event was held at the historic Dalhousie Station in Old Montréal April 8th and 9th. As the only junior mining company asked to participate in the Plan Nord ceremonies, I am extremely pleased by the high level of interest Focus Graphite has received from all levels of government in Québec. From Premier Couillard and senior members of his cabinet, to the Mayor of Fermont, Martin St-Laurent and the Innu First Nation of Uashat mak Mani-Utenam Director, Jean-Claude Therrien Pinette, one thing is clear — Québec supports our flagship Lac Knife Graphite Project and, as we announced at the event, our plans to build a transformation plant for Focus Graphite’s value-added graphite products in Sept-Îles, Québec.
Focus Graphite's Donald Baxter and Jeff Hussey with Québec Premier Philippe Couillard (photo: Focus Graphite Inc.)
Confidence in Québec has increased within the mining investment sector as a result of Plan Nord. The Fraser Institute recently ranked Québec as the number 6 mining jurisdiction in the world for mining investment, up from 18 last year. Graphite is one of the commodities identified as having "enormous undeveloped potential" in the Plan Nord Priority Action Plan. Among the government’s related announcements was the creation of a one-stop provincially appointed agency mandated to facilitate the process of permitting applications and other regulatory easements for mining developments, falling within the Plan Nord boundaries. In particular, Plan Nord creates the Mining and Hydrocarbon Capital Fund (le fonds Capital Mines Hydrocarbures), established specifically to invest in mineral mining development.
Donald Baxter announces Focus Graphite's plan to build a transformation plant for value-added graphite products in Sept-Îles, Québec (photo: Focus Graphite Inc.)
As evidenced by the Québec Government’s invitation to Focus Graphite’s management to attend Premier Couillard’s Plan Nord announcement, we anticipate a long-term, mutually beneficial relationship with the province; and as importantly, with the Innu First Nation of Uashat mak Mani Utenam, and the towns of Fermont and Sept-Îles, where we plan to develop our mining and secondary processing operations.
On April 9, 2015 at a news conference organized by l'Association minière du Québec (the Québec Mining Association), Focus Graphite announced a Feasibility Study was underway for the construction of a value-added graphite transformation facility — to be located in Sept-Îles — to produce spherical graphite for lithium-ion (Li-ion) batteries and other high-purity graphite products, including graphite foils used as thermal management for electronics, such as smart phones, tablets, laptops, and flat-screen televisions.
Focus Graphite's Jeff Hussey answers questions from the media (photo: Focus Graphite Inc.)
The Feasibility Study will define the capital and operating costs required for the Sept-Îles facility. We intend to build both the Lac Knife and Sept-Îles facilities concurrently.
Advancing to Production
In May 2014 and February 2015, we published our exceptional battery test results performed with Lac Knife spherical graphite which led to Focus Graphite’s decision to proceed with a formal evaluation of a high-value graphite production plant.
L to R: Focus Graphite President and Chief Operating Officer, Donald Baxter; COREM Executive Director, Claire Lavallée; Focus Graphite Vice President, Project Development, Jeff Hussey; Minister of Mines, Luc Blanchette; Minister of Energy and Natural Resources, and Minister Responsible for the Plan Nord, Pierre Arcand; Minister of the Economy, Innovation and Exports, Jacques Daoust; Glencore Mine Raglan Vice President, Kristan Straub; Osisko Gold Royalties President, Bryan A. Coates (photo: Focus Graphite Inc.)
The Sept-Îles Project would leave us well positioned to compete for end-user supply contracts with any lithium-ion battery manufacturer in the world. Work to date indicates a cost-competitive, environmentally sustainable process to produce coated spherical graphite for direct use in the anodes for lithium-ion batteries.
Currently, tests of the Company’s value-added materials are ongoing with potential customers. Focus Graphite has also completed positive low-temperature thermal purification tests and other physical sizing and shaping methodology tests that form the basis for the value-added graphite plant Feasibility Study, now in progress.
Donald Baxter and Jeff Hussey with Innu First Nation of Uashat mak Mani-Utenam Director, Jean-Claude Therrien Pinette (photo: Focus Graphite Inc.)
Following completion of the graphite transformation Feasibility Study, we shall make a definitive schedule for the mine project and transformation plant. UK-based Industrial Minerals Data and Benchmark Mineral Intelligence estimate the price of spherical graphite produced from natural flake graphite at USD$8,000 per tonne. Focus Graphite’s unique strategy to develop a value-added processing facility is essential, given the anticipated growth in global demand for low-cost, high-quality, environmentally sustainable battery materials. Given our projected low costs of production from Lac Knife’s operations, we see the application of our in-house purification and shaping technologies as a means of securing a highly competitive advantage in the technology graphite commodities sector from our proprietary value-added processes.
We continue to advance our $166-million structured project financing for the Lac Knife mine development project and discussions to secure offtake agreements for the Li-ion battery industry and other potential markets are ongoing.
Focus Graphite President and Chief Operating Officer, Donald Baxter meeting with the Minister of Energy and Natural Resources, and the Minister Responsible for Plan Nord, Pierre Arcand (photo: Focus Graphite Inc.)
In August 2014, Focus Graphite published its positive Feasibility Study of the Lac Knife mine and concentrator operation, and submitted its Environmental and Social Impact Assessment (ESIA) with the Québec Government in November 2014.
As one of the best mining jurisdictions in the world, Québec recognizes the significance of the investments Focus Graphite intends to make in and around the Fermont and Sept-Îles communities, in terms of our job-creating and technology-rich projects. More immediately, however, we believe that demonstrating our social, economic and environmental values and objectives, with Québec decision-makers, will be helpful during the permit approval process for both our projects.
The Lac Knife Graphite Project has strong support from the local communities and a pre-development agreement with the Innu First Nation of Uashat mak Mani-Utenam (ITUM) was announced in October 2014. Focus Graphite met with local communities and key stakeholders during the mine Feasibility Study to be able to adjust the project to address concerns. These meetings will continue throughout the life of the mine.
Meeting Future Demand
The renewable-energy sector and battery manufacturers in particular, are wholly dependent on an abundant supply of high-purity, low-cost graphite to meet rising global demand.
Donald Baxter and Jeff Hussey with Martin St-Laurent, Mayor of Fermont, Québec, at the relaunch of the Plan Nord in Montréal (photo: Focus Graphite Inc.)
As the North American leader in graphite development, Focus Graphite sees sustainable growth in demand coming not only from companies such as Tesla Motors and its battery partner Panasonic, but from a host of other manufacturers including BYD, a Chinese automaker ramping up its battery-making capacity to rival that of Tesla-Panasonic’s production over the next five years. This will divert Chinese battery-ready graphite to domestic use, leaving the West to source supply elsewhere. Meanwhile, the trend in demand growth from the consumer electronics sector mirrors that of the auto industry. Foxconn, the Taiwanese maker of Apple’s iPhone, announced its intentions to invest $800 million to expand its battery-making business. Apple has demonstrated interest regarding batteries and electric vehicles. If Apple enters the space, as many analysts anticipate, the world's largest company (by market capitalization) may very well be held accountable for the environmental footprint of the company's input materials.
Focus Graphite's Donald Baxter and Jeff Hussey with the Honourable Luc Blanchette, Minister of Mines (photo: Focus Graphite Inc.)
The world’s top-10 battery makers saw sales grow by 56% in 2014, with Panasonic, AESC, LG Chem, and BYD controlling 79% of the global market. The following companies have electric or fuel-cell powered vehicles in production or under development, all of which require technology graphite: Tesla, Nissan, GM, Toyota, Ford, BMW, Honda, Mitsubishi, Mercedes-Benz, Volkswagen, Audi, Hyundai, and Kia Motors.
The growing global demand for Li-ion batteries from electric vehicles and energy-storage markets (e.g. utility-storage batteries, making solar and wind energy economical) creates vast market opportunities for Focus Graphite and our value-added graphite products. Additionally, market demand for graphite foils used to dissipate heat in portable electronic devices, such as cell phones, computers, tablets, and laptops is also growing.
Simply put, we see no shortage of potential customers for Focus Graphite’s manufactured graphite products for the foreseeable future.
A Proud Moment for Focus Graphite
Focus Graphite's Donald Baxter and Jeff Hussey with the Honourable Pierre Arcand (photo: Focus Graphite Inc.)
I’ll conclude by stating that Focus Graphite was very proud to be recognized by Québec Premier Philippe Couillard and members of his cabinet. We saw an appreciation — at the highest decision-making level in Québec — of Focus Graphite’s development vision to become a global leader in the green technology revolution and because our Lac Knife and planned Sept-Îles projects bring much-needed resource diversification and jobs to the towns of Fermont and Sept-Îles. Furthermore, Focus Graphite’s activities, its social, environmental and economic endeavors fit squarely within the parameters of Québec’s far-reaching plans to develop its northern territory.
As a stakeholder in Plan Nord, we look forward to contributing to the future economic development of Northern Québec and wish to congratulate Premier Couillard, his ministers and officials on the successful relaunch, and thank them for including Focus Graphite at the event.