Focus Metals (CVE:FMS)(OTCQX: FCSMF) said Monday that it has inked a licensing agreement with Hyrdo-Quebec's technology research institute, IREQ, allowing the junior explorer to develop a graphite purification facility and anode production facility for lithium-ion batteries.
The new, Focus-owned facility will transform first-production
graphite sourced from the company's Lac Knife deposit in Quebec to
Shares of the company rallied more than five percent Monday morning, to $1.02.
"This agreement represents a huge and significant milestone for us as
we move through pre-development to production of our Lac Knife
technology graphite deposit," said Focus CEO Gary Economo.
"Moreover, the marriage of Focus's Québec-based, world-class graphite
deposit to the Québec-based global leader in processing technologies -
especially in battery anode production- will leave Focus Metals well-positioned to secure its place as a quality supplier to the fast-growing lithium battery manufacturing sector."
is an emerging mid-tier junior graphite company and is the 100
percent-owner of the highest-grade technology graphite resource in the
world, also known as Lac Knife in Fermont, Quebec.
With a grade of 16%, the company's CEO Gary Economo says it will be
able to produce large and medium flake, battery-grade graphite at the
lowest cost in the world, at just $350 per tonne.
In February, Focus raised another $10 million on top of the $20
million it raised last year, which it plans to use to cover exploratory
drilling costs in 2012. Its Lac Knife project is currently in the midst
of a preliminary economic assessment (PEA), with the report expected to
be published in June.
The licensing agreement announced Monday consists of two parts, the
first of which is related to Focus' development of a graphite
purification process that brings Lac Knife's processed graphite to
99.95% carbon, for use in lithium battery applications.
The processing includes spherical shaping as well as thermal and chemical purification, the company said.
The second part of the deal provides for the production of anodes for
lithium-ion batteries, with IREQ to provide technical support and to
cooperate in future material and processing improvements.
The new purification and production facilities will be built in Québec, and will be owned and managed by Focus Metals.
The purification facility will be designed to produce 15,000 tons of
spherical battery-grade flake graphite at peak by 2015, whereas the
anode production facility will be designed to produce up to 5,000 tons
The exact cost of the facilities and the financing required have yet to be determined, Focus said.
In exchange for the technology license, support and future
commitments, IREQ will receive a licensing fee that will be paid in cash
over a three-year period, representing less than 10 percent of the
current working capital.
IREQ will also get a royalty fee based on a percentage of future sales, the parties said.
"This agreement reinforces our goal of becoming the lowest-cost technology graphite producer in the world," Economo said.
"To have an all-Québec technology agreement with a world leader in
graphite anode development and patenting bodes well for our
Economo also said that the battery-grade process will be incorporated into the Lac Knife PEA, due in June 2012.
The Lac Knife deposit contains 4.9 million tons of measured and
indicated resource grading 16% carbon as graphite (Cgr) and 3.0 million
tons of inferred resource grading 16% Cgr, the bulk of which is intended
for use in technology applications.
IREQ is recognized globally as a technology source for renewable
energy solutions, developing advanced materials for battery
manufacturing. The institute, which partners with private firms,
universities and government agencies in Quebec and abroad, holds more
than 100 patent rights and 15 licenses for battery materials that are
used by some of the world's largest battery manufacturers and materials
"We believe that the high-grade graphite of the Lac Knife property,
associated with our graphite purification and shaping technologies, will
yield a quality product for Li-ion battery applications," said director
of energy storage and conversion at IREQ, Karim Zaghib.
Hydro-Québec is Canada's largest electricity producer, owned solely
by the Québec government. It invests $100 million per year in research.
which also has direct ownership in graphene technologies and
application development, listed 23 months ago, and in that time, its
stock has risen some 1,000 percent.
The junior company holds a 40 percent interest in Grafoid Inc., a
graphene investment, as well as research and development and patenting