Monday, June 6, 2011

Focus Metals and a look at the who what where and when

I would like to bring more familiarity to Focus Metals (TSXV:FMS). This company has so much going for it at this point it is almost overwhelming to know where to start. For instance the fact that the company had a share float consisting of 76,244,000 shares as of Feb.21, 2011. Focus Metals has since closed a C $20M financing which closed on May 12, 2011,, this now brings the fully diluted share float to 107,444,000. From this perspective this company is grossly under-valued. When we look at the historically defined deposit, which has nearly gone into production not once but twice, and consider the sources of the interpreted data, it is without much difficulty that we foresee the NI 43-101 and scoping study, forthcoming in the upcoming weeks, as being more of a formality than as something that may contain surprises. Historically according to studies done to define the deposit in the past, Lac Knife holds 8.1MT grading at nearly 17% carbon content.

The much anticipated NI 43-101 is fully expected to prove this part up, but now let me tell you what really makes this a unique project. The Lac Knife project could hold potentially much more than the expected 8.1MT. This deposit is open in several directions and at depth. It would only be reasonable to believe that there is no doubt much more graphite to be discovered by continued drilling on this project. Obviously this leaves Focus Metals in possession of a world class deposit, and that this deposit could have potential to grow significantly, but what about the grade. Most graphite deposits around the world have a carbon content of between 2% and 5%. Lac Knife has historically been graded at nearly 17%.  Our 17% concentration of graphite means we need six tons of resource to process a ton of graphite compared to 40 tons for a competitor at 2.5% concentration. Not only do we benefit from that factor in production quality and costs, but also our shareholders ultimately benefit in value. As you can see this leaves Focus Metals in an excellent position to take advantage of the leverage available from a profit standpoint. The market will establish prices for large flake graphite, so that is a given. Where we excel on a competitive basis is the cost-mitigating nature of graphite concentration. In our worst-case scenario, we foresee profit ratios in the 80-85% range at today’s market prices.

At $2500 to $3000 per ton for 95% pure flake today, we see a blue sky investment opportunity based on price. I think most people would have to agree this is truly a most unique investment opportunity, but what if I was to tell you that graphite that has been purified to 99% plus currently fetches a very appealing price of $50,000 at the retail level. This is graphite that has undergone further processing to bring it to 99% plus, and is what is required for use and research in the technological applications. As you can see this could turn Focus Metals into an extremely profitable company. Further to all the above noted positive details, might I add that Focus Metals has already released news that they have formed a joint venture, with the purpose of researching graphene application possibilities. This was announced by a news release dated March 2, 2011,

Graphite and graphene have been called "a product that could change an era". In a literal sense this would appear to be very true. Graphite demand has risen sharply and is forecast to continue to fall into a deficit in regards to availability. The amount of research being initiated by so many companies, as well as numerous governments, in respect to an almost endless list of possible applications or uses, definitely leaves one in expectation that this truly could be a product that will define an era. Much like steel had a similar effect on the world at the time of its invention, and plastic also had this effect, graphite and graphene in my opinion most likely will become the next era forming product.

Focus Metals, as I pointed out at the start of this article, has a little over 100 million shares fully diluted. This number may cause concern for some but I would offer this in answer to those concerns. Focus Metals currently has C$25M plus in the till, so they are well funded going forward. Focus Metals has tremendous potential in my opinion, and what will add much to the companies value, as well as shareholders value, is the fact that the company has claimed they are fully committed to becoming a mine to market business. This added to the possible potential arising from the JV, in regards to licensing any graphene products that come to fruition from the JV, leaves one nearly overwhelmed at just how huge the potential really is for Focus Metals. I think that in order to get a good feel, for just what the potential is, people should check out the latest presentation Focus Metals CEO gave this last weekend at the Cambridge House Critical Materials Investment Symposium, With management displaying nothing short of complete dedication to bring this company to the next level, it is noteworthy to mention that Jefferey York has purchased shares on the open market,
It is also important I believe to mention that none of the management has sold any shares, excluding ex-management. This is a true show of faith in Focus Metals.

Kwyjibo. Kwyjibo is a rare earth project with some assay results back. With 8 rare earth elements, iron, and copper it will be quite interesting to see further drilling results from this property.

Focus Metals is such a unique company in so many aspects. The profit potential here is highly uncommon,I would suggest to those who are interested in this company to do some due diligence and make your decisions accordingly. The companies website would be an excellent starting point, and can be found at Focus Metals has started to garner a lot of attention that it previously did not seem to have. As this continues it could cause some abnormal trading patterns at times, but at this point I foresee Focus Metals bringing some extra-ordinary profits to those who are invested.

For disclosure purposes I have received no compensation of any kind for this post. I own shares in Focus Metals.


1 comment:

  1. A good report as to what has been happening with Focus. I agree with you and I also own shares. It is an good read, the presentation given by Gary Economo the CEO this past weekend is very very encouraging.