Focus Graphite and SOQUEM Confirm the High Content of Critical Rare Earth Elements

Focus Graphite Inc.

TSX VENTURE : FMS
OTCQX : FCSMF
FRANKFURT : FKC

February 06, 2013 11:52 ET

 Focus Graphite and SOQUEM Confirm the High Content of Critical Rare Earth Elements at Kwyjibo with 2.95% TREO and 1.44% Cu Over 10 m at Surface

OTTAWA, ONTARIO--(Marketwire - Feb. 6, 2013) - Focus Graphite Inc. (TSX VENTURE:FMS)(OTCQX:FCSMF)(FRANKFURT:FKC) ("Focus" or the "Corporation") and partner SOQUEM Inc. ("SOQUEM") are pleased to provide an update of their 2012 exploration program at the Kwyjibo polymetallic Iron-Rare Earth Elements-Copper-(Gold) (Fe-REE-Cu-(Au)) Property ("Kwyjibo" or the "Property"), located in the Côte-Nord administrative district of Québec. The 2012 exploration program at Kwyjibo comprised of surface showing and trench re-sampling, core drilling and ground geophysical surveying.
Highlights of the Josette showing and trench re-sampling program include:

• Josette showing: 2.95% TREO, 37.35% REOc* and 1.44 % Cu over 10 m, including a high-grade sub-zone of: 4.59% TREO, 35.58 % REOc*, and 2.62 % Cu over 2m.

• Trench TR-95-30: 4.13% TREO, 36.08% REOc* and 0.23 % Cu over 2 m.

• Trench TR-95-29: 3.58% TREO, 39.90% REOc*and 0.17% Cu over 1.5 m.

*The ratio of critical rare earth elements ("REOc") is defined by The U.S. Department of Energy ("DOE") as the sum of Nd+Eu+Tb+Dy+Y oxides divided by total rare earth oxides (TREO) : REOc = ((Nd2O3+Eu2O3+Tb2O3+Dy2O3+Y2O3)/TREO)*100. The REOc ratio is the expression of the importance of those REEs sought by the industry without considering the technological challenge to recover the REE and all the costs related to a mine development.

The new 2012 analytical results highlight the increasing total rare earth content of the mineralization related to the assaying of heavy rare earth elements in comparison to the 1995 analytical results. In 1995, only La, Ce and Sm were analyzed out of the suite of 17 rare earth elements at the Josette showing and in trenches TR-95-30 and TR-95-29.

In 2012, 10 new channel samples were collected at the Josette showing, two new channel samples were collected from trench TR-95-30 and one chip sample was taken from trench TR-95-29. The 13 samples were analyzed for the complete range of rare earth elements (Table 1). The 2012 results confirm the high heavy rare-earth elements ("HREE") content of the mineralization at Kwyjibo as well as the high ratio of critical rare earth elements (REOc) which ranges from 32.34% to 41.14%.

A map of the Kwyjibo property showing the location of Josette showing, trench TR-95-30 and trench  TR-95-29 is available on the Company's website at www.focusgraphite.com.
Table 1. Results of the re-sampling program at the Josette showing and at Trenches TR-95-30 and TR-95-29:

Sample	Length	TREO	HREO	REOc	Nd2O3	Eu2O3	Tb2O3	Dy2O3	Y2O3	Fe2O3	P2O5	Cu	F	Mo	Au
	m	%	%	%	%	%	%	%	%	%	%	%	%	ppm	g/t
Josette showing
181151	1	3,55	33,37	41,14	0,518	0,013	0,019	0,117	0,794	69,30	4,50	0,66	1,43	283	0,02
181152	1	4,55	27,42	37,54	0,722	0,024	0,021	0,124	0,819	52,40	3,51	3,40	4,49	791	0,18
181153	1	4,64	22,43	33,63	0,729	0,019	0,016	0,099	0,695	43,30	2,95	1,84	7,33	2820	0,14
181154	1	2,79	29,81	39,56	0,440	0,008	0,012	0,077	0,569	65,60	3,55	1,22	2,04	227	0,08
181155	1	3,48	29,77	39,29	0,538	0,014	0,016	0,098	0,703	51,50	2,92	1,44	6,79	775	0,10
181156	1	1,99	32,13	40,65	0,296	0,005	0,009	0,059	0,440	69,50	3,24	1,19	2,43	136	0,08
181157	1	1,97	19,28	32,34	0,342	0,004	0,006	0,038	0,246	78,50	2,52	0,48	1,14	28	0,03
181158	1	1,99	26,45	36,83	0,312	0,008	0,008	0,050	0,353	53,00	1,99	1,67	5,10	217	0,15
181159	1	2,68	24,90	35,59	0,426	0,009	0,011	0,065	0,443	50,80	2,55	1,78	5,20	363	0,08
181160	1	1,86	26,58	36,97	0,301	0,006	0,008	0,049	0,325	70,90	2,46	0,76	1,75	23	0,07
Composite	10	2,95	27,21	37,35	0,462	0,011	0,013	0,077	0,539	60,48	3,02	1,44	3,77	566	0,09
Composite 2*	2	4,59	24,93	35,58	0,725	0,021	0,019	0,112	0,757	47,85	3,23	2,62	5,91	1805	0,16
TR-95-30
181163	1	5,49	21,34	34,06	0,956	0,016	0,019	0,114	0,765	58,30	4,31	0,18	1,44	151	n.a.
181164	1	2,78	26,92	38,11	0,472	0,009	0,012	0,074	0,491	66,60	4,27	0,28	0,96	40	n.a.
Composite	2	4,13	24,13	36,08	0,714	0,013	0,016	0,094	0,628	62,45	4,29	0,23	1,20	96	n.a.
TR-95-29
181166	1,5	3,58	29,30	39,90	0,611	0,012	0,017	0,105	0,683	66,80	4,86	0,17	0,79	16	n.a.

n.a. = not analyzed

(*) Composite of 2 meters from samples 181152 and 181153

TREO : Total rare earth oxides = La2O3+Ce2O3+Pr2O3+Nd2O3+Sm2O3+Eu2O3+Gd2O3+Tb2O3+Dy2O3+Ho2O3+Er2O3+Tm2O3+Lu2O3+Y2O3

HREO : Relative content (%) of heavy rare earth oxides = ((Tb2O3+Dy2O3+Ho2O3+Er2O3+Tm2O3+Lu2O3+Y2O3)/TREO)*100

REOc : Ratio of critical rare earth elements = ((Nd2O3+Eu2O3+Tb2O3+Dy2O3+Y2O3)/TREO)*100

The results of the rare earth elements assay program are expressed as total rare earth oxides (TREO), including yttrium oxide and ratio of critical rare earth elements (REOc*). Values of TREO (REE₂O₃) presented are the sum of all rare earth oxides of the lanthanide series and yttrium oxide; strictly not a rare earth element, yttrium is included in the total amount of REE because of the chemical behaviour and uses that are similar to the lanthanides.

The Josette showing was re-sampled in a composite of ten (10) one-meter long channels, cut parallel to the 1995 channels. For trench TR-95-30, a new two-meter long channel was cut parallel to the trench blasted in 1995 while for trench TR-95-29, chips samples were taken over 1.5 meters intervals. The total length of the 2012 sampling channels in both trenches (TR-95-29 & TR-95-30) is less than in 1995 by 5.4 m due to destruction of portions of the original outcrops caused by the blasting done in 1995, and also because of the subsequent infilling of the trenches by blocks of rocks and dirt and the strong weathering of the outcrop in trench TR-95-29.

Quality assurance / Quality control
The channels were cut with a rock saw perpendicular to the main foliation of the iron-rich rock (magnetitite). All the channels are one meter long by 2.5 cm wide and vary in depth from 10 to 15 cm. For each channel, the rock samples were broken into pieces and then placed into a plastic bag. In the case of Trench TR-95-29, chips samples of 5 to 10 cm long, by 5 to 10 cm wide and 1 to 5 cm thick were collected from the weathered outcrop over 1.5 m intervals and then placed into a plastic bag. A numbered tag from the ALS laboratory was inserted into the bag prior to the sealing of the bag with a tie-wrap. The sample bags were carried to the camp by helicopter then loaded onto a float plane to Sept-Îles and sent by a carrier to ALS Laboratories ("ALS") in Val-d'Or (a certified laboratory; ISO 9001:2008 and ISO/IEC 17025:2005 for standards).

The samples were analyzed for all rare earth elements, most traces and major elements. Due to the limited number of channel samples analyzed, no standard or blank were introduced except the one used by the laboratory. Rare earths and trace elements were analyzed using lithium borate fusion of the sample prior to acid dissolution and analyzed by ICP-MS (Induced-Couples Plasma Mass Spectrometry). This method is best suitable for minerals resistant to acid digestion, like some REE-bearing silicates. For REE high grades samples, a re-analysis of the pulp was performed using high sample to volume ratios in addition to Class A volumetric glassware. ALS laboratory used certified high grade rare earth reference materials as part of their standard protocol. Major elements were analyzed using a lithium borate fusion of the sample prior to acid dissolution and analyzed by ICP-AES (Induced-Couples Plasma Atomic Emission Spectrometry). REE, traces and major elements were analyzed at ALS laboratories in Vancouver. For sulphide-bearing samples, copper, lead, silver, zinc and sulphur were digested in aqua regia, then analyzed by AAS technique (Atomic Absorption Spectrometry). Gold was analyzed by fire assay and AAS with a 50g nominal sample weight. Base metals and precious metals were analyzed at ALS in Val-d'Or.

2012 core drilling program
Thirty-one (31) holes (4,207 m) were drilled at Kwyjibo in 2012 with the aim of validating grades, thicknesses and continuity of the REE-Fe-Cu mineralization in the northeastern portion of the Josette horizon, where the best drilling intersections were obtained in 2011 from hole 10885-11-57 with 2.40% TREO over 48.8m and hole 10885-11-60 with 3.61% TREO over 33.1m (see Focus Metals press release dated March 13^th 2012).

A map of the Kwyjibo property showing the location of the 31 drill holes is available on the Company's website at www.focusgraphite.com.

A total of 1,333 samples (1,249 half NQ drill core samples; 23 duplicates; 29 standard samples and 32 blank samples) were sent to ALS in Val-d'Or and Vancouver, for total rare earth elements, base metals, major elements and trace element analysis. The results from the 2012 core drilling program are pending.

Surface and borehole TDEM geophysical surveys
A ground time-domain electromagnetic ("TDEM") geophysical survey and a borehole Pulse-EM survey were completed by Abitibi Geophysic Inc. from Val-d'Or (Québec) in early October. A total of 75 km of lines were surveyed on five different loops that covered all significant VTEM anomalies from the 2006 survey and all known occurrences of the iron formation on the Kwyjibo Property.
Thirty (30) drill holes (5.492 m), were surveyed with borehole Pulse-EM on three loops. Eight (8) holes from the 1994 to 2011 core drilling programs were also surveyed for a total of 1,219 m for the most northeastern Grabuge - Gabriel showings loop. A total of 2,089 m from 11 drill holes (1994 to 2012) were surveyed on loop that straddled the Fluorine and Josette showings grids. Finally, 2,184 m from 11 holes (1995 to 2012) were surveyed in the loop that covers most of the Josette horizon and the Josette grid.
The new ground and borehole geophysical data are currently being processed and interpreted by MB Geosolution of Québec City. High-priority geophysical targets from the 2012 surveys will be followed-up though drilling in 2013.
Metallurgical tests and mineralogical study
A first round of metallurgical tests is planned at Kwyjibo this year. The testing will be performed on two representative samples of the mineralized iron formation (magnetitite) and the mineralized breccia in the aim to produce concentrates for critical rare earths, copper and iron. The first sample will be comprised of 80kg composite of mineralised rock from Josette showing. The second sample will consist of a 230kg composite from quarter-drill core samples from seven holes drilled below trenches TR-95-29 and TR-95-30. The contract to carry out the metallurgical testing has been awarded to COREM of Québec-City. In conjunction with the metallurgical testing, a mineralogical study will be undertaken in order to characterize the distribution of the REEs in the different REE-bearing minerals. Results from both studies are expected in the third quarter of 2013.
Property Location
The Kwyjibo polymetallic Iron-Rare Earth Elements-Copper-(Gold) (Fe-REE-Cu-(Au)) property, totalling 118 mining titles and covering 6,278 ha, is located 125 km northeast of Sept-Îles, in the Côte-Nord administrative district of Québec. The property is also located 25 km east of the Québec North Shore and Labrador railway line and is accessible by air from Sept-Îles.
Terms of the Agreement
On August 3, 2010, the Company announced the signing of an option agreement with SOQUEM Inc., a wholly-owned subsidiary of the Société générale de financement du Québec ("SGF") (in April 2011, the SGF merged with Investissement Québec), to acquire a 50% interest in the Kwyjibo property.
Under the terms of the agreement, Focus could acquire a 50% interest in the Kwyjibo property, by spending up to $3 million in exploration work on the property over a period of 5 years of which $1 million had to be spent during the first 2 years. SOQUEM is the operator for the exploration work carried out on the property to date and Focus has the option to become the operator, by paying $50,000 in cash or issuing a block of common shares valued at $50,000. As of the year ended September 30, 2012 Focus had spent $3,244,173 on the Kwyjibo project (net of tax credits and mining duties) and has accordingly earned its 50% interest in the property.
About Focus Graphite
Focus Graphite Inc. is an emerging mid-tier junior mining development company, a technology solutions supplier and a business innovator. Focus is the owner of the Lac Knife graphite deposit located in the Côte-Nord region of northeastern Québec. The Lac Knife project hosts a NI 43-101 compliant Measured and Indicated mineral resource of 4.972 Mt grading 15.7% carbon as crystalline graphite with an additional Inferred mineral resource of 3.000 Mt grading 15.6% crystalline graphite. Focus' goal is to assume an industry leadership position by becoming a low-cost producer of technology-grade graphite. On October 29^th, 2012 the Company released the results of a Preliminary Economic Analysis ("PEA") of the Lac Knife project which demonstrates that the project has robust economics and excellent potential to become a profitable producer of graphite. As a technology-oriented enterprise with a view to building long-term, sustainable shareholder value, Focus Graphite is also investing in the development of graphene applications and patents through Grafoid Inc.
About SOQUEM Inc.
SOQUEM Inc. is a wholly-owned subsidiary of Ressources Québec. Ressources Québec is a new Investissement Québec's subsidiary, specializes in the mining and hydrocarbon industries; it will consolidate and spur government investment in projects carried out by mining companies and the hydrocarbon sector.
The technical information presented in this press release has been reviewed by Benoit Lafrance, Ph.D., Géo (Québec), Focus Vice-President of Exploration and a Qualified Person under National Instrument 43-101.
Forward Looking Statements - Disclaimer
This news release may contain forward looking statements, being statements which are not historical facts, and discussions of future plans and objectives. There can be no assurance that such statements will prove accurate. Such statements are necessarily based upon a number of estimates and assumptions that are subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected. Important factors that could cause actual results to differ materially from the Company's expectations are in our documents filed from time to time with the TSX Venture Exchange and provincial securities regulators, most of which are available at www.sedar.com Focus Graphite disclaims any intention or obligation to revise or update such statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

Mr. Gary Economo
President and Chief Executive Officer
613-691-1091, ext. 101
geconomo@focusgraphite.com
www.focusgraphite.com

Great Panther Silver Intersects High Grade Silver-Gold Mineralization and Discovers Two New Zones at Guanajuato Mine Complex

Great Panther Silver Limited

TSX : GPR
NYSE MKT : GPL

February 05, 2013 11:02 ET

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 5, 2013) - GREAT PANTHER SILVER LIMITED (TSX:GPR)(NYSE MKT:GPL) (or "the Company") is pleased to announce that underground drilling programs at the Company's wholly owned Guanajuato Mine Complex have been successful in intersecting high grade silver-gold mineralization in the historic Valenciana Mine area and discovering two new zones of silver-gold mineralization in the Guanajuatito Mine area.

The drilling at Valenciana included an intercept of 2,900g/t silver and 26.00g/t gold over 1.30 metres, while the two new discoveries at Guanajuatito are highlighted by intersections of 1,010g/t silver and 6.67g/t gold over 1.10 metres and 1,460g/t silver and 4.79/t gold over 1.15 metres. A brief update on drilling at the Cata and Rayas Mines, also within the Guanajuato Mine Complex, is provided below.
"These are significant results in that they demonstrate our ability to make new discoveries at Guanajuato while continuing to expand the size and extent of the known mineralized zones," stated Robert Archer, CEO of Great Panther Silver. "Furthermore, the Valenciana drilling indicates that there is still un-mined high grade silver-gold mineralization in this historic mine that is worthy of follow up."
Valenciana Mine
In the Valenciana Mine area, remnants of old stope walls and pillars intersected in drilling above the 390 metre level include 7.45 metres grading 275g/t silver and 2.47g/t gold in UGV12-039, 1.10 metres grading 299g/t silver and 3.66g/t gold in UGV12-050, and 1.30 metres grading 2,900g/t silver and 26.00g/t gold in UGV12-051.
Drilling below the 390 metre level has intersected new mineralization including 3.10 metres grading 624g/t silver and 4.59g/t gold in UGV12-012.
The pillars and hanging wall and footwall stope walls are being tested mainly from drill stations on a new footwall ramp connecting the 320 Cata level (southeast side of the Valenciana deposit) to the 245 Valenciana level (northwest side of the Valenciana deposit).
Drilling in 2013 will continue to test the old Valenciana Mine area that extends approximately 400 metres along strike and 280 metres on the dip (click here to view Valenciana longitudinal section).
Guanajuatito Mine
Drilling in the Guanajuatito area, in the northwest part of the Mine Complex, has intersected mineralization both to the northwest (GTTO NW), and to the southeast (GTTO SE) of the existing development, between the 100 and 245 metre levels. The GTTO NW zone is approximately 50 metres in strike length, 140 metres down the dip, and open to depth and upward. The GTTO SE zone is approximately 50 metres along strike, 70 metres down the dip, and open to depth.
Highlights of the drilling in the GTTO NW zone include 2.25 metres grading 380g/t silver and 1.28g/t gold in UGG12-057, and 1.10 metres grading 1,010g/t silver and 6.67g/t gold in UGG12-061 (within a wider interval grading 285g/t silver and 2.61g/t gold over 4.40 metres). Drilling in the GTTO SE zone was highlighted by an intercept of 1.15 metres grading 1,460g/t silver and 4.79/t gold in UGG12-070.
Current development in the Guanajuatito Mine is at the 245 metre level, and this has been connected to the old 245 metre level of the Valenciana Mine (click here to view Guanajuatito longitudinal section), which gives access to the northwest edge of the Valenciana silver-gold deposit. Initial mapping and sampling southeast of the GTTO SE zone, along the old 245 metre level, shows a similar style of structural control and mineralization such that other in-situ zones may be located towards Valenciana.
With the aforementioned footwall ramp at Valenciana connecting to the 320 metre level at Cata, ore from Guanajuatito can now be transported underground to the Cata shaft, thereby eliminating the need for truck hauling to surface and then on surface to the Cata mill. This underground haulage is faster, cheaper and reduces truck traffic through populated parts of the City of Guanajuato.
Highlights of Drilling from Valenciana and Guanajuatito Mine areas

Hole ID	From	To	Metres	True Width (m)	Ag g/t	Au g/t	Zone
Valenciana
UGV12-012	182.90	186.00	3.10	2.37	624	4.59	VM
UGV12-014	175.50	180.85	5.35	5.27	145	0.96	VM
UGV12-021	87.00	89.20	2.20	1.26	194	1.19	VM
UGV12-024	81.00	84.00	3.00	1.50	105	1.21	VM
UGV12-026	61.35	63.20	1.85	1.85	228	1.70	VM
UGV12-037	86.40	87.00	0.60	0.30	143	1.00	VM
UGV12-039	115.55	123.00	7.45	6.10	275	2.47	VM
UGV12-043	73.50	74.40	0.90	0.58	210	2.78	VM
UGV12-050	106.60	107.70	1.10	0.78	299	3.66	VM
UGV12-051	172.70	174.00	1.30	0.55	2,900	26.00	VM
Guanajuatito
UGG11-052	256.60	260.15	3.55	2.72	191	0.80	GTTO-FW
UGG11-054	223.85	225.80	1.95	1.60	466	1.47	NW-VM
UGG12-056	259.00	261.30	2.30	1.48	128	0.44	NW-VM
UGG12-057	222.90	225.15	2.25	1.84	380	1.28	NW-VM
UGG12-061	225.10	229.50	4.40	3.60	285	2.61	NW-VM
including	225.10	226.20	1.10	0.90	1,010	6.67	NW-VM
and	228.45	229.50	1.05	0.86	75	3.78	NW-VM
UGG12-062	227.30	228.40	1.10	0.84	153	0.33	NW-VM
UGG12-065	304.70	305.55	0.85	0.52	587	3.91	NW-VM
UGG12-069	229.20	231.00	1.80	1.69	145	0.57	SE-VM
UGG12-070	235.50	236.65	1.15	1.02	1,460	4.79	SE-VM
UGG12-081	269.30	270.90	1.60	1.07	172	0.47	NW-VM
UGG12-082	220.00	221.00	1.00	0.73	250	0.76	NW-VM
Cata
UGC12-043	85.40	88.25	2.85	2.18	318	0.40	VM
UGC12-043	93.05	95.15	2.10	1.61	303	0.00	VM

Cata Mine
At the Cata Mine, exploration drilling is ongoing following the Veta Madre and hanging wall zones to the northwest and to depth. Mine development has progressed down to the 520 metre level, with stoping on the 520 and 490 metre levels. A drill program started in the fourth quarter of 2012 has had positive results extending mineralization to the northwest between the 470 and 520 metre levels on the Veta Madre and Contact Vein, and nine associated structures. Highlights of the drilling in the Cata Mine include 2.85 metres grading 318g/t silver and 0.4g/t gold in UGC12-043.
In 2013, drilling will test the depth extent of this mineralization (click here to view Cata Mine, Veta Madre longitudinal section).
Rayas Mine
On the Santa Margarita Vein in the Rayas Mine, fill in drilling continues, as does ramping down past the 500 metre level. Mining is presently ongoing on the 454 and 475 metre levels. Further areas for exploration drilling along the Veta Madre at Rayas in 2013 will include San Cayetano, Los Pozos, San Telesforo, and Promontorio.
Robert F. Brown, P. Eng. and Vice President of Exploration for the Company is the Qualified Person for the Guanajuato Mine Complex, under the meaning of NI 43-101. A full QA/QC program is being followed including the regular insertion of splits, blanks, and standards into the core sampling sequence. Analysis of the drill core samples was conducted at the Guanajuato Mine on-site laboratory, independently operated by SGS.
ABOUT GREAT PANTHER
Great Panther Silver Limited is a profitable, primary silver mining and exploration company listed on the Toronto Stock Exchange trading under the symbol GPR, and on the NYSE MKT trading under the symbol GPL. The Company's current activities are focused on the mining of precious metals from its two wholly-owned operating mines in Mexico, including the development stage San Ignacio Project. In addition, the Company is also pursuing acquisition opportunities throughout Latin America to add additional mines to its portfolio of properties. Great Panther's mission is to become a leading primary silver producer by acquiring, developing and profitably mining precious metals.
This news release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario) (together, "forward-looking statements"). Such forward-looking statements may include but are not limited to the Company's plans for production at its Guanajuato and Topia Mines in Mexico, exploring its other properties in Mexico, the overall economic potential of its properties, the availability of adequate financing and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements expressed or implied by such forward-looking statements to be materially different. Such factors include, among others, risks and uncertainties relating to potential political risks involving the Company's operations in a foreign jurisdiction, uncertainty of production and cost estimates and the potential for unexpected costs and expenses, physical risks inherent in mining operations, currency fluctuations, fluctuations in the price of silver, gold and base metals, completion of economic evaluations, changes in project parameters as plans continue to be refined, the inability or failure to obtain adequate financing on a timely basis, and other risks and uncertainties, including those described in the Company's Annual Report on Form 20-F for the year ended December 31, 2011 and reports on Form 6-K filed with the Securities and Exchange Commission and available at www.sec.gov and Material Change Reports filed with the Canadian Securities Administrators and available at www.sedar.com.

Contact Information

Great Panther Silver Limited
Robert Archer
Chief Executive Officer
1-888-355-1766

Great Panther Silver Limited
Rhonda Bennetto
Vice President Corporate Communications
1-888-355-1766
info@greatpanther.com
www.greatpanther.com

Western Lithium Arranges US$20 Million Royalty Financing for Oilfield Drilling Additives Facility and Lithium Demonstration Plant

2 hours ago by Marketwire

Western Lithium USA Corporation ("Western Lithium", the "Company") (TSX: WLC)(OTCQX: WLCDF) is pleased to announce that it has entered into a Royalty Purchase Agreement with RK Mine Finance (Master) Fund II L.P. ("Red Kite") pursuant to which Red Kite has agreed to pay to Western Lithium up to US$20 million in consideration for the sale of a royalty on its Kings Valley Project, located in Nevada, USA.

An initial tranche of US$11 million will be funded concurrently with the closing of the royalty arrangement. A second tranche of US$9 million will be funded upon completion of the engineering and design of the lithium demonstration plant and once certain regulatory assurances have been received from the Bureau of Land Management with respect to the sale of by-products associated with lithium production, provided it occurs within three years following the date of the agreement. Closing of the royalty arrangement is expected to occur on or about February 6, 2013.

Western Lithium plans to use the initial funding tranche to construct a 10,000 ton per year process facility to produce Hectorite-based organoclay used in the oil and gas drilling industry. To make organoclay, the Company's Hectorite clay must be processed using an extruder and combined with several additives. Organoclay typically sells in a range of US$2,000 to $4,500 per short ton FOB shipping point, depending on performance. Engineering designs for a plant and negotiations for potential production locations are underway. Permitting of the Hectorite mine has commenced in Nevada and the Company is targeting to commence production and positive cash flow in early 2014 from the clay operation.

The Company has been producing pilot-scale samples of its products, which demonstrate thermal stability for application in high pressure high temperature (HPHT) drilling exploration environments. With the success of new directional drilling technology in recent years applied to shale gas and deep oil and gas drilling targets, the Company anticipates that there is a strong growth market for its thermally stable Hectorite products. 

Western Lithium's Hectorite clay is of high purity, which enables it to use a dry process to manufacture its products, that is expected to give the Company a cost advantage in the industry. A portion of the proceeds from the initial tranche will also be used to complete the design and engineering for a lithium demonstration plant.

The second tranche of funding is principally allocated towards the construction of a demonstration plant to test the viability of its lithium extraction process at a large scale. The Company released a pre-feasibility study in January 2012 (see news release dated January 27, 2012) that demonstrated competitive economics and a pre-tax net present project value of US$551 million at an 8% discount rate. Western Lithium believes that the next natural step is to work with an engineering technology group or strategic partner to further de-risk the process technology, in order to attract construction capital for the project.

Jay Chmelauskas, President and CEO of Western Lithium, commented: "Over the next year, we will focus our efforts on our specialty Hectorite drilling additive business with the expectation of generating positive cash flow for the Company in early 2014. In the longer term, we will construct a lithium demonstration plant to gain investment confidence with our project, and to realize the full potential of its asset value. We are positioning Red Kite and our shareholders and stakeholders to expected near term strong growth in the drilling industry and longer term strong growth in the lithium sector."
The royalty will be a gross royalty on all production from the Kings Valley Project. It will consist of a gross revenue royalty of 8% until the first and second funding tranches have been repaid. The royalty will then be reduced to 3.5% for the life of the project. Western Lithium will have the option at any time to reduce the royalty to 1.75% upon payment to Red Kite of US$20 million.

Western Lithium has agreed to pay a finder's fee to Haywood Capital Markets in respect of the transaction equal to 6% of the proceeds raised in both tranches. For the first tranche, the finder's fees will, subject to approval of the TSX, be paid as to US$429,000 in cash and US$231,000 in common shares issuable at the five day volume weighted average trading price of the common shares on the TSX for the five trading days immediately preceding the closing.

About Red Kite
Red Kite provides mining companies with project financing and metal off-take agreements for initiation or expansion of mine production and is part of the Red Kite group. Red Kite operates across the global metals industry from offices in Bermuda, Denver, Hong Kong, London, New York, Shanghai and Sydney. Investors in Red Kite funds include college endowments, foundations, family offices, pensions and other institutional investors.
Western Lithium is developing the Kings Valley, Nevada lithium deposit into a strategic, scalable and reliable source of high quality lithium carbonate. The Company is positioning itself as a major U.S.-based supplier to support the rising global demand for lithium carbonate that is expected from the increased use of hybrid/electric vehicles. The Company is also pursuing the opportunity to be a supplier of specialty hectorite clay drilling additives to the oil and gas industry, and in particular, to support the growth of deep directional drilling applications in high temperature and high pressure environments.
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Cautionary Note Regarding Forward Looking Statements and Information: Certain disclosure in this release constitutes forward-looking statements and information. When used in this release, the words "will", "once", "provided", "plans", "targeting", "expected", "expectation", "anticipates", "believe" or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this release include, among others the completion of the Royalty Purchase Agreement, including both the first tranche funding and the second tranche funding, the Company's plans for and anticipated benefit from the construction of facitlities and development of hectorite based organoclay operations as well as the timing of commercial operations and positive cash flow, the results of design and engineering of lithium demonstration plant and the eventual construction of that plant. Such statements and information involve the application of certain factors and assumptions by the Company that are based on the Company's current beliefs as well as assumptions made by and information currently available to the Company. Although the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect, and the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such forward-looking statements and information. Such risk factors include, among others, that actual results of the Company's development activities will be different than those expected by management, that the Company will be unable to obtain or will experience delays in obtaining any required government approvals, that the Company will be unable to meet all conditions required for funding under the Royalty Purchase Agreement, the ability to procure required infrastructure, equipment and supplies in sufficient quantities and on a timely basis and the conditions of the markets generally. Readers are cautioned not to place undue reliance on forward-looking statements and information. The Company does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements and information whether as a result of new information, future events or otherwise, except as required by law.
The TSX has neither approved nor disapproved of the contents of this press release. Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this press release.

Contacts:
Western Lithium USA Corporation
Investor Relations
604-681-3071
604-681-3091 (FAX)
info@westernlithium.com
www.westernlithium.com

SOURCE: Western Lithium USA Corporation

mailto:info@westernlithium.com
http://www.westernlithium.com