Update: Caterpillar Financial Services Might Help Finance Focus Graphite's Lac Knife Project
- Focus Graphite just announced that Caterpillar Financial Services is looking at potentially financing 12% of its Lac Knife Project.
- This is a bullish development although I've been confident that the company would be able to get financing.
- Given the advanced stage of Lac Knife, its strong economics, and its prime location I continue to believe that this is the best development-stage graphite company; financing remains a risk.
Update: Focus Graphite Files Environmental And Social Impact Assessments For Its Lac Knife Project
- Focus Graphite just filed its environmental and social impact assessments with the government of Quebec.
- This is a development I had anticipated in my bullish article.
- Focus's Lac Knife Project is the most advanced large flake graphite project in North America, and shares remain undervalued; financing is a concern.
Update: Focus Graphite Enters Into A Pre-Development Agreement With The Uashat Mak Mani Utenam Innu First Nation
- Focus Graphite enters into a pre-development agreement with the Uashat Mak Mani Utenam Innu First Nation (aka ITUM) in order to take the tribe's environmental/social needs into consideration.
- I didn't discuss this with CEO/President Don Baxter in my recent discussion with him.
- This is a positive development given the significance of mining companies cooperating with natives and the consequences for not doing so.
Update: Focus Graphite Discovers Significant Mineralization At Its Lac Tetepisca Project
- Focus Graphite just announced that it discovered >12% graphite mineralization at its Lac Tetepisca Project.
- My emphasis has been on the late-stage Lac Knife Project as Lac Tetepisca is too early in its development to contribute significant value to Focus shares.
- Focus remains highly undervalued and owns the most advanced large-scale high grade flake graphite project in North America, and I would be a buyer here.
Update: Focus Graphite's Partner Grafoid Finalizes Its Acquisition Of Alcereco
- Grafoid, of which Focus Graphite owns just under 20%, just finalized its C$1.2 million acquisition of ALCERECO in an all-stock deal.
- I had not anticipated this in my recent article.
- The deal values Grafoid at $5/share, and if this is accurate, then Focus' stake is worth C$39 million, which is incredibly bullish.
- Of the late-stage Canadian graphite companies, I continue to believe Focus is the best positioned, and its potential liquidity related to its Grafoid holdings reinforces this conviction.
Update: Focus Graphite Announces A C$6.5 Million Private Placement
- Focus Graphite announced that it has planned a private placement worth up to C$6.5 million.
- Given the company's low cash balance as of the end of the second quarter, this was to be expected.
- This should be enough capital to hold the company over until it gets financing for its Lac Knife Project, and I remain bullish.
Why Focus Graphite Is A Winner: My Conversation With President/COO Don Baxter
- Two months after I wrote my bullish piece on Focus Graphite I had an in-depth discussion with President and COO Don Baxter.
- Despite his unavoidable bias he has reaffirmed my conviction in the company both as an undervalued investment on an absolute basis and as a "best-in-breed" late-stage flake graphite company. .
- I summarize our conversation below and add some color commentary. .
- Focus Graphite recently reported its Q2 earnings.
- The company is running low on capital and it will likely have to issue stock if it cannot find financing for its Lac Knife Project.
- My investment thesis--which is two months old--largely depends on the company finding this financing, and it suffers should financing be delayed as it has been.
- With the stock up 15% while the company continues to drain capital I would proceed somewhat cautiously at this point.
Focus Graphite Is Highly Undervalued And Positioned To Profit From Rising Graphite Demand
- Graphite demand is rising, and Focus Graphite is well-positioned to profit given its recent off-take agreement and its promising feasibility study for its Lac Knife Project.
- Graphite demand is set to rise rapidly as it is an essential element of lithium-ion batteries and other burgeoning technologies; supply is limited--coming mostly from China (<2% from North America).
- Given these points Focus Graphite should be able to find favorable financing that doesn't heavily dilute shareholders.
- Consequently, even in a bearish scenario the company's Lac Knife Project is undervalued, and the shares have at least 75% upside, making the shares a "strong buy.".
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