Focus Metals and Hydro-Québec’s IREQ sign graphite purification technology agreement and anode production agreement for lithium-ion batteries

Focus Metals Inc. (TSX-V: FMS; OTCQX: FCSMF; FSE: FKC) and Hydro-Québec’s world-leading Institut de recherche d'Hydro-Québec (IREQ) announced today the signing of a licensing agreement enabling Focus Metals to develop a graphite purification center as well as a graphite anode production facility for Lithium-Ion batteries.

A new, Focus-owned facility will transform first production graphite sourced from Focus Metals’ Lac Knife, Québec high-grade deposit to battery grade material.

Focus Metals President and CEO Gary Economo said the licensing agreement is in two parts.

The first part is related to Focus Metals’ 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, thermal and chemical purification.

The second part of the licensing agreement provides for the production of anodes for lithium ion batteries.

IREQ will provide technical support and cooperate in future material and processing technology improvements.

Mr. Economo said the new purification and production facility will be built in Québec and will be owned and managed by Focus Metals. The new purification facility will be designed, subject to positive economic analysis, to produce 15,000 tons of spherical battery grade flake graphite at peak, by 2015, and the anode production facility will be designed to produce up to 5,000 tons of anodes. The specific cost of the facilities and the financing required is yet to be determined.

In exchange for the technology license, technology support and future processing improvements, IREQ will receive a licensing fee which will be paid in cash, over 3 years, representing less than 10% of the current working capital, as well as a royalty fee based on a percentage of future sales.

“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,” Mr. Economo said.

More, he said, the marriage of Focus’ Québec-based, world class graphite deposit to the Québec-based global leader in processing technologies - particularly 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.

“In particular, this agreement reinforces our goal of becoming the lowest cost technology graphite producer in the world,” Mr. Economo added. “To have an all-Québec technology agreement with a world leader in graphite anode development and patenting bodes well for our shareholders.”

Mr. Economo added that the battery grade process will be incorporated into the Lac Knife Preliminary Economic Assessment due in June 2012.

Focus Metals is the 100% owner of the Lac Knife deposit containing 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 (see NI 43-101 compliant Technical Report on the mineral resource estimate filed on SEDAR), the bulk of which is intended for use in technology applications.

IREQ is recognized globally as a leading technology source for renewable energy solutions.

“We believe that the high grade graphite of the Lac Knife property associated with our graphite purification and shaping technologies would yield a quality product for Li-ion battery application,” said Karim Zaghib, Director, Energy Storage and Conversion Department, Hydro-Québec’s research institute.

About IREQ

Hydro-Québec’s research institute, IREQ, is a global leader in the development of advanced materials for battery manufacturing and creates leading edge processes from its state of the art facilities. IREQ holds more than 100 patent rights and 15 licenses for battery materials used by some of the world’s most successful battery manufacturers and materials suppliers. Its areas of expertise include energy storage and is a lead partner with private sector companies in Québec to build EV and HEV charging stations in support of its technology developments. Its material development contributions are helping to develop safe, high-performance lithium ion batteries that can be charged more quickly and a greater number of times. IREQ promotes open innovation and partners with private firms, universities, government agencies and research centers in Québec and abroad. Its partnerships allows IREQ to develop, industrialize and market technologies resulting from those innovation projects.

About Hydro-Québec

Hydro-Québec is Canada’s largest electricity producer among the world’s largest hydroelectric power producer and a public utility that generates, transmits and distributes electricity. Its sole shareholder is the Québec government. It primarily exploits renewable generating options, in particular hydropower, and supports the development of wind energy through purchases from independent power producers. Its research institute, IREQ, conducts R&D in energy efficiency, energy storage and other energy-related fields. Hydro-Québec invests more than $100 million per year in research.

About Focus Metals

Focus Metals Inc. is an emerging mid-tier junior mining company, a technology solutions supplier and a business innovator. It is the owner of the highest-grade (16%) technology graphite resource in the world. The company's goal is to assume a dominant industry leadership position by becoming the lowest-cost producer of technology-grade graphite. As a technology-oriented enterprise with a view to building long-term, sustainable shareholder value, Focus Metals is invested in the development of graphene applications and patents through Grafoid Inc

Forward Looking Statements

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