Sunday, July 3, 2011

Focus Metals continues in their attempt to unlock more value for shareholders

Focus Metals (TSXV:FMS) has released news on June 30, 2011 that shows the determination with which management is striving to unlock the most value for shareholders.
While some people may view this negatively, this is exciting news for long term investors in Focus Metals. The desire to attract long term off-take agreements with some of the companies globally, that provide the potential for bringing the most value to Focus Metals, and ultimately the shareholder, stands out prominently in this news release.

As Focus Metals President and CEO Gary Economo stated in the release,  that unlike precious metals, the true economic value of technology grade graphite is dependent on the specifications of the end users. Focus Metals is currently in negotiations with several undisclosed companies regarding off-take agreements. It should only be considered normal due diligence, on the part of the companies that Focus Metals is conducting negotiations with, to request samples of an appropriate size so that the grade of the graphite can be studied to determine if in fact it meets their specifications. This whole process is obviously paramount to finding companies, that the graphite meets or exceeds their requirements. What we must bear in mind is that graphite of a certain grade may be extremely desirable to one company, but may for another company be unusable.

In addition to requiring a specific grade of graphite, companies that may potentially sign off-take agreements with Focus Metals, will most likely be interested in the amount of graphite that meets their specifications. As Mr. Economo also pointed out, the grade of the Lac Knife deposit varies from 8% to 40% grade and can be mined more efficiently when a more complete data picture from drilling is completed this summer. This in my opinion displays the complete professionalism and dedication this management team is delivering as they attempt to progress this project towards the goal of Focus Metals, and that being to bring this project to a mine to market position. The current steps to conduct further drilling will only serve to help in the designing of a mine and ultimately to unlock the most shareholder value over the long term.
This expansion of drilling will facilitate a more thorough understanding of the deposit, which in turn, will give the company an even better understanding of the Lac Knife deposit. Looking forward this decision is not only a positive decision from the off-take agreement issue but we should not ignore the basic fact, knowledge is power. The more knowledge Focus Metals can obtain from further drilling, will in turn bring more potential value to the company, since this will only strengthen their position in on going negotiations and also possible future negotiations. It also tends to serve the company well in terms of aiding in determination of the best mining scenario to capture the most value from the project on a whole.

It would be my opinion that this expansion of drilling seems to be fuelled more by potential customers requests than from a lack of understanding in regards to Lac Knife deposit. As such, this truly leads me to believe that this could unlock untold value for Focus Metals. Potential customers who may be willing to sign off-take agreements will be in a position to critique the samples and thus help the management of Focus Metals in their decisions concerning the actual mining of this deposit. There is an extensive amount of information regarding Lac Knife deposit available to management, albeit non 43-101 compliant at this point, which has already been stated by Roche Consulting Group Ltd, that they believe to be very consistent with the information supplied to them for the purpose of issuing a
43-101 document. At last report, Roche had advised Focus Metals that they could expect little to no change from the historical data, in regards to size and grade of the Lac Knife deposit. Here is a quote from a presentation made by Gary Economo at the Cambridge House Critical Materials Investment Symposium, "Early indications from our consultant preparing our 43-101 resource calculation
are that we shall see no inconsistencies or variations from previous non-43-101
estimates that our property contains a 17% pure carbon content. We recently filed those indications with the securities regulator.

Once again I view Mr.Economo and the entire Focus Metals team, displaying their desire to not only consider Focus Metals future, but to wholeheartedly consider how they might bring shareholders even more value as this project progresses. Considering how fast technology is advancing, it is with little difficulty, that we can easily see graphite use being applied to an ever-increasing amount of products and applications. This is something that will bring an inordinately high value to Focus Metals, however this will only be the beginning. The graphene market has only started to become a part of this whole equation. Once graphene really begins to gain momentum with more and more positive results coming from current and future research, graphene could conceivably bring untold value to Focus Metals. One of the main facts that positions Focus Metals to benefit from this aspect of the graphene side of things, is the joint venture the company has entered into regarding graphene research and the licensing of  intellectual property rights to such graphene applications and then work to commercialize
such applications through license arrangements with industry.

graphene will undoubtedly change the world as we know it, and this in turn opens the potential for investors of Focus Metals to invest in a company that could change our world from a financial standing. I would suggest for those who find Focus Metals as an appealing investment possibility, please do your own due diligence, and at the very least I would suggest putting Focus Metals on your watchlist. The company website can be found at and this would be an appropriate place to start.

For disclosure purposes I have received no compensation of any kind for this post. I do own shares of Focus Metals and have intentions of adding to my position from time to time as I see appropriate.

1 comment:

  1. Another excellent effort, thanks