Focus Graphite Inc. (‘Focus’, TSX VENTURE: FMS) (OTCQX: FCSMF) (FRANKFURT: FKC) has signed a Definitive Option Agreement (the “Agreement”) with Lara Exploration Ltd. (‘Lara’, TSX VENTURE: LRA) for the latter’s wholly-owned Caninde graphite project in the northeastern Brazilian state of Ceara. Under the Agreement, Focus, subject to due limitations and for an exploration expenditure commitment of five years, has gained two options to acquire up to 60% of Lara. Focus will act as the official operator of the Caninde project for the extent of the agreement (five years). Lara’s business approach is to generate a prospect and develop it through partner funded joint ventures, which has enabled it to build a diverse portfolio of alliances and deposits. The Canindé Graphite Project is well connected by paved road to Fortaleza, the state capital of Ceara State. Lara’s initial exploration has identified significant flake graphite mineralization in specific areas as well as a long 16 kilometre long stretch of lower grade graphite within the property. Lara reported that eight flake occurrences from the property, during its early exploration efforts, in the spring of 2011, indicated graphitic carbon content reaching of over 40%. This is very high considering that 20% graphitic carbon content in some noted flake graphite producing areas in Ontario and Quebec is considered high.
Brazil is the world’s third largest producer of graphite (China and India precede it) and one of Brazil’s three large graphite producers, Nacional de Grafite, a private company, claims to be the world’s single largest producer of natural crystalline graphite. Brazil is the only producer of graphite in South America and moist of the deposits have been identified in the States of Minas Gerais and Bahia not far from Ceara. Brazil is also an end user for value added graphite products such as electrodes and aerospace composites, thanks to Embraer SA, one of the world’s largest and most advanced aerospace companies. For instance, the third largest manufacturer of refractories – used in the production of steel and other applications requiring high resistance to heat – Magnesita Refratarios has expressed an interest launching a new graphite mine in order to become entirely self sufficient for its graphite sourcing and in order to avoid having to rely on the Chinese graphite supply chain, describing it as ‘unreliable’.
The Lac Knife graphite property in Quebec represents Focus’s principal project, the expansion into Brazil can be considered a strategic move to expand in an important graphite mining and processing region with domestic and international market opportunities. The deal with Lara is a stepping stone to Focus’ aim to strengthen its position in the graphite space. Brazilian graphite value added graphite companies have been increasingly interested in domestic sources of mineral graphite.Alessandro is Senior Editor at ProEdgeWire. He holds a BA, MA. Alessandro has worked for the United Nations in Libya and specialized in Middle Eastern, African, and South American affairs. Alessandro has worked as an industry analyst, lived and worked abroad extensively and is fluent in English, Italian, Spanish and French with a working knowledge of Portuguese, Arabic and German.