Mr. Don Baxter reports

FOCUS GRAPHITE REPORTS A 92% INCREASE IN THE MEASURED AND INDICATED MINERAL RESOURCE CATEGORIES AT ITS LAC KNIFE FLAKE GRAPHITE PROJECT-TO 9.6 MILLION TONNES GRADING 14.77% CG

Focus Graphite Inc. has released an update of its National Instrument 43-101 mineral resource estimate for its 100-per-cent-owned Lac Knife graphite project in northeastern Quebec.

The resource estimate is based on both the 2012 and 2013 additional exploration and definition drilling programs for a total of 92 holes, and 9,103 metres that successfully achieved the designed goal to upgrade the quality of existing indicated and inferred resources to the measured and indicated categories. This is in addition to 105 previous drill holes that totalled 9,217 metres.

Measured and indicated resources are now estimated at 9.6 million tonnes grading 14.77 per cent graphitic carbon at a 3-per-cent Cg cut-off grade. Additionally there are 3.1 million tonnes of inferred resources at 13.25 per cent Cg using a 3-per-cent cut-off in this updated resource estimate presented in the associated table.

                    LAC KNIFE MINERAL RESOURCE ESTIMATE
                   AT 3.0% GRAPHITIC CARBON (CG) CUT-OFF

                                 Tonnage           Cg     In situ graphite
                                      (t)          (%)                  (t)

Measured                         432,000        23.66              102,000
Indicated                      9,144,000        14.35            1,312,000
Measured + indicated           9,576,000        14.77            1,414,000
Inferred                       3,102,000        13.25              411,000

(1) Mineral resources are not mineral reserves and do not have demonstrated
    economic viability.

Highlights:

• Measured and indicated mineral resources reported at a cut-off of 3.0 per cent Cg increased in tonnage by 92 per cent to 9.6 million tonnes grading 14.77 per cent Cg compared with the previous estimate of 4.9 million tonnes grading 15.76 per cent Cg reported at a cut-off of 5.0 per cent Cg;
• Upgraded 432,000 tonnes of indicated resources to the measured resource category grading an average of 23.66 per cent Cg using a 3-per-cent cut-off grade;
• The updated resource estimate increased the in situ graphite content by 81 per cent;
• The bulk of the 3.0 million tonnes previously classified as inferred resource was successfully upgraded to the measured and indicated categories;
• Delineation of an additional 3.1 million tonnes of inferred resources that are located within the southwest extension of the Lac Knife deposit.

As shown in the associated table, when comparing at the 5-per-cent preliminary economic assessment (PEA) cut-off, the resource tonnage increased by 92 per cent in the measured and indicated categories from 4.9 million tonnes grading 15.76 per cent Cg in the PEA study to 9.5 million tonnes grading 14.86 per cent Cg in this new update. This translated to an increase of 81 per cent of in situ graphite from 778,000 tonnes to 1.4 million tonnes in the measured and indicated categories.

In the inferred resource category, the tonnage decreased by 2.0 per cent from 3.0 million tonnes in the PEA study to 2.9 million tonnes in this resource update. The inferred-resource-category average grade was reduced from 15.58 per cent Cg to 13.75 per cent Cg, resulting in a reduction of 13.5 per cent of in situ graphite in this category from 467,000 tonnes down to 404,000 tonnes. These changes resulted from converting most of the 3.0 million tonnes of inferred resources in the PEA study pit to the measured and indicated categories, and also by significantly extending the deposit to the south, adding an additional 3.1 million tonnes of inferred resources in the newly delineated South-Central zone, which is still considered open in this direction by Focus.

Another contributing factor was the reduction of the cut-off grade from 5 per cent Cg in the PEA study down to 3 per cent Cg in this update. The reduction in cut-off was driven by a higher selling price and higher concentrate grade.

          SENSITIVITY TO CUT-OFF CHANGE AND COMPARISON WITH PREVIOUS ESTIMATE
                                            
                                    Updated             Oct. 30, 2012
                           mineral resource               PEA mineral
                                   estimate         resource estimate
                           (3.0% Cg cut-off          (5.0% Cg cut-off         Per cent
                                  base case)                base case)          change
          Cut-                 Cg        Cg               Cg        Cg  Tonn-    Grap-
           off     Tonnes       %    Tonnes      Tonnes    %    Tonnes    age     hite

Meas-    Grea-    
ured       ter
          than
            10    428,000   23.81   102,000           0              0
         Grea-    
           ter
          than
             5    432,000   23.66   102,000           0              0
         Grea-    
           ter
          than
             3    432,000   23.66   102,000
         Grea-    
           ter
          than 
             2    432,000   23.66   102,000
Indic-   Grea-  
ated       ter
          than 
            10  7,466,000   15.77 1,177,000   4,533,000 16.43  745,000 64.7%    58.0%
         Grea-  
           ter
          than
             5  9,065,000   14.44 1,309,000   4,938,000 15.76  778,000 83.6%    68.3%
         Grea-  
           ter
          than
             3  9,144,000   14.35 1,312,000
         Grea-  
           ter
          than
             2  9,146,000   14.35 1,312,000
M+I      Grea-  
           ter
          than
            10  7,894,000   16.21 1,279,000   4,533,000 16.43  745,000 74.1%    71.7%
         Grea-  
           ter
          than
             5  9,497,000   14.86 1,411,000   4,938,000 15.76  778,000 92.3%    81.4%
         Grea-  
           ter
          than
             3  9,576,000   14.77 1,414,000
         Grea-  
           ter
          than
             2  9,578,000   14.77 1,415,000
Infer-   Grea-  
red        ter
          than
            10  2,196,000   15.81   347,000   2,861,000 15.92  455,000 -23.2 % -23.7%
         Grea-  
           ter
          than
             5  2,941,000   13.75   404,000   3,000,000 15.58  467,000 -2.0%   -13.5%
         Grea-  
           ter
          than
             3  3,102,000   13.25   411,000
         Grea-  
           ter
          than
             2  3,116,000   13.20   411,000

(1) The rounding of tonnes as required by NI 43-101 reporting guidelines may
    result in apparent differences between tonnes, grade and contained graphite.

Focus Graphite president and chief operating officer Don Baxter stated: "We are very pleased to have further derisked the Lac Knife project by increasing the quality and tonnage of the resource. This updated resource will be incorporated into a mineral reserve estimate in the feasibility study currently under way with Met-Chem.

"This announcement comes on the heels of our historic announcement of the signing of a 10-year offtake agreement with a Chinese industrial conglomerate, just as China announced it was shutting down approximately 20 per cent of its flake graphite production in Shandong province. This further illustrates the need for reliable, low-cost, high-quality graphite flake production outside of China," Mr. Baxter said.

"Again, Focus is showing that it has strong potential to meet these growing needs, and the updated resource indicates the Lac Knife project could potentially produce high-quality graphite flake over a significant mine life," he added.

The updated mineral resource is based on 197 diamond drill holes totalling 18,320 metres of historic and recent drilling. This includes 104 surface diamond drill holes totalling 10,337 metres completed by Focus Graphite since 2010.

Mineral resources have been reported within a constraining pit shell at a cut-off grade of 3.0 per cent graphitic carbon. Details on the mineral resource estimation procedures are given in the notes below.

Notes on mineral resource estimation methodology:

• Mineral resources are estimated in conformance with the CIM mineral resource definitions referred to in NI 43-101 -- Standards of Disclosure for Mineral Projects. Pierre Desautels, PGeo, principal resource geologist of AGP Mining Consultants Inc., qualified person under NI 43-101 who is an independent of the company, has prepared and authorized the release of the mineral resource estimates presented herein. Jeffrey Cassoff, Eng, lead mining engineer of Met-Chem Canada Inc. and qualified person under NI 43-101 has reviewed the technical content of this news release. This mineral resource estimate is an update of the resource estimated by Roche Limited Consulting Group, effective Dec. 5, 2011, and later accepted (with a resource classification update) by RPA Consulting as part of a preliminary economic assessment study dated Oct. 30, 2012.
• All drill holes are composed of diamond drill core that was sampled and assayed over the entire length of mineralized zones by sampling approximately 1.5-metre intervals. A quality assurance/quality control program was introduced during the 2010 drill program, and was expanded during the 2012 and 2013 drill program to include the insertion of standards, duplicates and blanks, and check assays at a secondary laboratory.
• Specific gravities were determined at the IOS laboratory, located in Chicoutimi, Que. A total of 5,133 specific gravity results exist in the database that was collected by IOS since the 2010 drill program. Due to the strong correlation between sulphur and the bulk density estimates, a density model was interpolated with the same parameters used for the sulphur model. The interpolated density model ranges from 2.64 grams per cubic centimetre to 3.05 grams per cubic centimetre averaging 2.81 grams per cubic centimetre.
• Detailed geological logging and sectional interpretations by Focus Graphite led to the development of a three-dimensional (3-D) domain model based on lithology and grade boundaries. The wireframe modelling resulted in outlining three major mineralized zones with eight minor accessory zones. Grade is typically above 3 per cent within the wireframes but was as low as 1 per cent in local lower-grade zones within high-grade domains that were utilized in the variography studies and in the grade interpolation constraints.
• For the treatment of outliers, each statistical domain was evaluated separately, and no top cut was necessary. However, a search restriction of 30 metres by 30 metres by 30 metres was imposed on threshold values of 38 per cent Cg in order to restrict the influence of the highest values during the interpolation process.
• The composite intervals selected were 3.0 metres in length.
• A 3-D geological block model was generated using GEMS software. The block model matrix size is six m by six m by five m. Ordinary kriging was used for all domains with inverse distance and nearest neighbour check models. The interpolation was carried out in multiple passes with increasing search ellipsoid dimensions. Classification for all models was based primarily on the pass number, distance to the closest composite and the krige variance. The measured classification was only retained in the area, in proximity to the bulk sample pits. No adjustment to the classification was made for blocks interpolated primarily with historical holes since these were found to be adequate for resource modelling.
• The reported mineral resources are considered to have reasonable prospects of economic extraction. Met-Chem created a pit shell using the Lerchs-Grossman pit optimization algorithm, and design parameters including costs, sales price and the open-pit mine, and concentrator operating parameters that were derived from the updated preliminary economic assessment (see news release dated Nov. 7, 2013) as well as typical regional cost estimates:
  • Selling price: $2,000 per tonne (free on board Sept-Iles);
  • Mill recovery: 91.089 per cent;
  • Concentrate grade: 96.6 per cent total carbon;
  • Pit slope: 45 degrees;
  • Mining cost: $6 per tonne mined;
  • Processing cost: $40.61 per tonne milled;
  • Transportation cost: $25 per tonne of concentrate;
  • Administration and infrastructure cost: $15 per tonne milled.
• The resulting pit shell encompasses most of the estimated measured, indicated and inferred resources. The rounding of tonnes as required by NI 43-101 reporting guidelines may result in apparent differences between tonnes, grade and contained graphite.
• Mineral resources are not mineral reserves and do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues.
• The quantity and grade of reported inferred mineral resources in this estimation are uncertain in nature, and there has been insufficient exploration to define these inferred mineral resources as indicated or measured mineral resources, and it is uncertain if further exploration will result in upgrading them to the indicated or measured mineral resource categories.

Lac Knife project

The Lac Knife project comprises 57 map-designated claims covering 2,986.31 hectares located in Esmanville township (National Topographic System map sheet 23B/11), 27 kilometres south-southwest of the iron mining town of Fermont, in the Cote-Nord administrative district of Quebec. Focus acquired a 100-per-cent interest in the project in October, 2010. A map showing the location of the Lac Knife project is available on the company's website.

The mineralization at Lac Knife is hosted in biotite-quartz-feldspar paragneiss and schist of the Nault formation, in association with iron formations of the Wabush formation. These are equivalent to the Lower Proterozoic Labrador Trough rocks affected by the Late Proterozoic Grenvillian orogeny. High-grade metamorphism and folding associated with the Grenvillian orogeny have resulted in the formation of important concentrations of graphite dominated by value-enhanced large flakes.

Sampling, assaying and QA/QC

The entire drill cores were logged at the Lac Knife camp and shipped to the IOS facilities in Chicoutimi for sample preparation. Two slabs of about one-fourth of the four-inch-diameter PQ core were sawed parallel on each side of the central axis of the core. One of the slabs was earmarked for geochemical analysis, while the other slab was kept as a witness sample. Centre parts of the core are kept for possible subsequent uses. The samples are mostly 1.5 m in length with variances from 0.5 m to 1.8 m. Slab samples were dried before processing for density measurement, crushing and grinding at the IOS sample preparation laboratory.

Once prepared, the samples were sent to the Consortium de Recherche Appliquee en Traitement et Transformation des Substances Minerales (COREM), an ISO/IEC 17025:2005-certified facility in Quebec City, for graphitic carbon (Cg) analysis using LECO high-frequency combustion method with infrared measurement (internal analytical code LSA-M-B10 for graphitic carbon; ISO 9686:2004). For the measurement of graphitic carbon, the sample is pretreated with nitric acid, placed in a LECO capsule and introduced in the furnace (1,380 degrees) in an oxygen atmosphere. Carbon is oxidized to carbon dioxide. After the removal of moisture, gas (CO2) is measured by an infrared detector, and a computerized system calculates the concentration of graphitic carbon (per cent Cg). Total sulphur was also analyzed by LECO (code LSA-M-B41). For sulphur determinations, the sample is placed in a LECO capsule and introduced in the furnace (1,380 degrees) until sulphur is oxidized to sulphur dioxide. After the removal of moisture, gas (SO2) is measured by an infrared detector, and a computerized system calculates the concentration of total sulphur (per cent S).

Under the QA/QC program, about 10 per cent of the samples were analyzed by COREM for total (code LSA-M-B45), organic (code LSA-M-B58), inorganic (code LSA-M-B11) and graphitic (code LSA-M-B10) carbon as well as for total sulphur. Duplicates of these samples were also sent to Actlabs Laboratories in Ancaster, Ont. (ISO/IEC 17025:2005 with CAN-P-1579) for graphitic carbon (code 5D C graphitic) and total sulphur (code 4F S combustion infrared detection) determinations, and for 35-multielement analysis using ICP methods (code 1E2 aqua regia). IOS introduced standards, duplicates (sawing, crushing or grinding duplicates), and blank samples into each batch of core samples as part of the QA/QC program.

Qualified persons

Benoit Lafrance, PhD, Geo (Quebec), Focus vice-president of exploration, and Don Baxter, PEng, Focus president and chief operating officer, both qualified persons as defined by NI 43-101 guidelines, have reviewed and approved the technical content of this news release. Pierre Desautels, PGeo, principal resource geologist of AGP Mining Consultants Inc., qualified person under NI 43-101 who is independent of the company, has prepared and authorized the release of the mineral resource estimates presented herein. Jeffrey Cassoff, Eng, lead mining engineer of Met-Chem Canada Inc. and qualified person under NI 43-101 guidelines, has reviewed the technical content of the news release.

We seek Safe Harbor.