Response from company re: offtakes/financeHey guys, sent an e-mail to Focus a few weeks ago regarding timelines for offtakes and financing. Nothing new or earth shattering but thought I would share the response nonetheless. GLTA
"We are just excited as you are with the most recent developments. Unfortunately I can’t elaborate anymore on the financing and offtake discussions that is not already public information. Regarding financing; FMS is currently in discussion with vendors to define financing packages for equipment. This will result in a reduced up front capital and add to the basket of financing options currently being investigated. Another financing option currently under due diligence is Supply Chain Financing (“SCF”) based on an offtake agreement signed in December 2013 for a minimum of 50% of Lac Knife’s production. SCF is a non-dilutive alternative to equity financing and is not as encumbering as traditional debt, or royalty financing. Future off-take agreements will contain a financial component as well. This project-financing alternative could include equity and low interest debt as well as a signing bonus to execute an offtake agreement.
Regarding other offtake agreements; only us(FMS) and NGC have the ability to talk to battery manufactures on potential offtake agreements. On May 27th, Focus Graphite announced it “Succeeded in Producing Extremely High-Performing Coated Spherical Graphite for Lithium Ion Batteries”. The results from testing performed on Lac Knife Spherical Graphite (“SPG”) produced outstanding performance metric results.
· The benchmark products have a typical irreversible capacity loss (“ICL”) of 6-10% ICL.
· Lac Knife SPG showed two ICL test results measuring 1.01% and 1.44%, truly remarkable results.
· Essentially these battery performance tests illustrated that the Irreversible Capacity Loss (“ICL”) was reduced by 75% compared to the benchmark products available in the market today.
These tests confirm Focus’ capability to tailor lithium ion battery anode grade SPG and value added products to meet the most stringent customer specifications
Lac Knife anode SPG is unique in having such a low ICL performance metric, this could be credited to the unique properties of the Lac Knife high carbon content concentrate that grades 98% C, even in the finer flake size concentrate products down to 200 mesh (75 microns) that are usually the most difficult products to sell. This holds the potential to allow Focus market access to significantly higher margin value added products with a finer grade lower cost product creating a unique opportunity."