FLSmidth Interested in Potential Financing Option for Focus Graphite’s Lac Knife Project

- February 24th, 2015

Focus Graphite Inc. (TSXV:FMS,OTCQX:FCSMF,FWB:FKC) reported that FLSmidth has expressed its formal interest in providing engineering & technical services and supply of mineral processing equipment for the Lac Knife Project. The FLSmidth proposal for the initial set of Lac Knife mineral processing equipment has a cost estimate of $12 million.

Focus Graphite Inc. (TSXV:FMS,OTCQX:FCSMF,FWB:FKC) reported that FLSmidth has expressed its formal interest in providing engineering & technical services and supply of mineral processing equipment for the Lac Knife Project. The FLSmidth proposal for the initial set of Lac Knife mineral processing equipment has a cost estimate of $12 million. FLSmidth is a leading supplier of mineral processing equipment and mining services, with annual revenues in excess of 3.6 billion euros.

FLSmidth has introduced the Lac Knife project to the Danish Export Credit Agency and the project may be eligible for EKF credit support.

As quoted in the press release:

The initial set of Lac Knife mineral processing equipment being proposed by FLS bears a feasibility study level cost estimate of $12 million. The project scope may include a second component at a later date associated with dewatering, filtration, and conveyance equipment used for the de-watering and dry-stacking of tailings.

Focus included this revised tailings management system in the Environmental and Social Impact Assessment report filed in November 2014 in order to reduce the environmental footprint of Lac Knife’s general site layout.

FLSmidth, is a Danish multinational global corporation with annual revenues in excess of 3.6 billion euros, and is a leading supplier of mineral processing equipment and mining services and is specialized in dry-stacked tailings management.

“FLS’s Letter of Interest represents another significant potential financing option as the Company develops the Lac Knife Structured Project Financing,” said Don Baxter, Focus Graphite President and Chief Operating Officer.

FLS has introduced the Lac Knife project to the Danish Export Credit Agency (“EKF”) and the project may be eligible for EKF credit support. An EKF guarantee is backed by the Danish State, and as such, the EKF loan guarantee can be considered as AAA-rated. “Both parties are discussing this financing option with a view to achieving a mutually satisfactory conclusion.”

“This potential debt facility represents 7% of Lac Knife’s total project financing requirements, raising the total of potential vendor financing to approximately 20%. Terms of a debt facility are to be negotiated and a comprehensive disclosure will be released at a later date.”

This announcement follows the Caterpillar Structured Finance announcement on January 6th, 2015. Focus is continuing project-financing discussions with various stakeholders, investors, and institutional funds in both the public and private sector with the objective of minimizing shareholder dilution through a mix of debt and equity financing.

On August 8th, 2014 Focus Graphite published its Lac Knife Project Feasibility Study that included a mine and concentrator operation with a capital expenditure requirement of $165.6 million including a $17.1 million contingency.

Click here to read the Focus Graphite Inc. (TSXV:FMS) press release
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