Focus Metals Inc acquires the Lac Knife Graphite Project

Aug. 19, 2010 - Focus Metals Inc. announces that it has reached an agreement with a subsidiary of IAMGOLD Corporation (IAMGOLD), to acquire the Lac Knife Graphite Project (Property). The Property is located 35 kilometers south of Fermont, Quebec, which is in north-eastern Quebec near the border with Labrador.
All amounts are in Canadian dollars, unless otherwise stated.
"We are very pleased to announce the acquisition of the Lac Knife project. This acquisition represents the third major component in our strategy. The first being the Ni-Cu-PGE properties in the Labrador Trough area and the second being the REE Kwyjibo project in Quebec. When fully developed, this graphite property may be amongst the largest graphite producing properties in the world", stated Gary Economo, President and Chief Executive Officer.
Pursuant to the terms of the share purchase agreement by the parties (the "Agreement"), Focus will acquire all of the issued and outstanding shares of 3765351 Canada Inc., a subsidiary of IAMGOLD and registered owner of the Property, in exchange for (i) a cash payment of $250,000, (ii) the issuance of common shares of the Corporation (the "Common Shares") equal to 9.9% of the issued and outstanding Common Shares of Focus following the closing of the concurrent private placement (see below for details) for a maximum of 4,016,361 Common Shares, and (iii) the execution of an indemnity agreement in favour of IAMGOLD. Each Common Share will be accompanied by one-half of one share purchase warrant, each whole warrant entitling IAMGOLD the right to acquire an additional Common Share of Focus for a period of twenty-four (24) months following the closing of the transaction at a price equal to the lesser of (i) a 20% premium to the offering price of the concurrent private placement and (ii) the minimum exercise price permitted by the policies of the TSX Venture Exchange.
The closing of the transaction and the concurrent private placement is scheduled to occur within a delay of forty-five (45) days from the date of the Agreement and is subject to several conditions customary to this type of transaction, including, (i) satisfactory legal, technical and environmental due diligence on the Property, 3765351 and its business, (ii) final approval of the Corporation's board of directors, (iii) regulatory approval, and (iv) the Corporation having completed a concurrent private placement for minimum gross proceeds of $100,000. All securities issued in connection with the transaction and the private placement will be subject to a four month hold period from the closing date.