Focus Metals and Hydro-Québec's IREQ Sign Graphite Purification Technology Agreement and Anode Production Agreement for Li-ion Batteries

FMS: TSX-VENTURE

MONTRÉAL and OTTAWA, May 7, 2012 /CNW Telbec/ - Focus Metals Inc. (TSX-V: FMS; OTCQX: FCSMF; FSE: FKC) and Hydro-Québec's world-leading research institute, IREQ, today announced the signing of a licensing agreement enabling Focus Metals to develop a graphite purification facility and a graphite anode production facility for lithium-ion (Li-ion) batteries.

A new, Focus-owned facility will transform first-production graphite sourced from Focus Metals' Lac Knife (Québec) high-grade deposit to battery-grade material.

The licensing agreement is in two parts. The first part is related to Focus Metals' development of a graphite purification process that brings Lac Knife's processed graphite to 99.95% carbon for use in lithium battery applications. The processing includes spherical shaping as well as thermal and chemical purification. The second part of the agreement provides for the production of anodes for Li-ion batteries.

IREQ will provide technical support and cooperate in future material and processing technology improvements.

Focus Metals' President and CEO, Gary Economo, said the new purification and production facilities will be built in Québec and will be owned and managed by Focus Metals. The new purification facility will be designed, subject to positive economic analysis, to produce 15,000 tons of spherical battery-grade flake graphite at peak, by 2015, whereas the anode production facility will be designed to produce up to 5,000 tons of anodes. The exact cost of the facilities and the financing required have yet to be determined.

In exchange for the technology licence, technological support and future processing improvements, IREQ will receive a licensing fee that will be paid in cash over a three-year period, representing less than 10% of the current working capital, as well as a royalty fee based on a percentage of future sales.

"This agreement represents a huge and significant milestone for us as we move through pre-development to production of our Lac Knife technology graphite deposit," said Mr. Economo. "Moreover, the marriage of Focus's Québec-based, world-class graphite deposit to the Québec-based global leader in processing technologies—especially in battery anode production—will leave Focus Metals well-positioned to secure its place as a quality supplier to the fast-growing lithium battery manufacturing sector."

"In particular, this agreement reinforces our goal of becoming the lowest-cost technology graphite producer in the world," Mr. Economo added. "To have an all-Québec technology agreement with a world leader in graphite anode development and patenting bodes well for our shareholders."

Mr. Economo went on to say that the battery-grade process will be incorporated into the Lac Knife Preliminary Economic Assessment due in June 2012.

Focus Metals is the 100% owner of the Lac Knife deposit, which contains 4.9 million tons of measured and indicated resource grading 16% Carbon as graphite (Cgr) and 3.0 million tons of inferred resource grading 16% Cgr (see NI 43-101-compliant Technical Report on the mineral resource estimate filed on SEDAR), the bulk of which is intended for use in technology applications.

IREQ is recognized globally as a leading technology source for renewable energy solutions.

"We believe that the high-grade graphite of the Lac Knife property, associated with our graphite purification and shaping technologies, will yield a quality product for Li-ion battery applications," said Karim Zaghib, Director - Energy Storage and Conversion at IREQ.

About IREQ

Hydro-Québec's research institute, IREQ, is a global leader in the development of advanced materials for battery manufacturing and designs cutting-edge processes in its state-of-the-art facilities. IREQ holds more than 100 patent rights and 15 licences for battery materials that are used by some of the world's most successful battery manufacturers and materials suppliers. Its contributions are helping to develop safe, high-performance lithium-ion batteries that can be charged more quickly and a greater number of times. IREQ also acts as lead partner with private-sector companies based in Québec to build EV and HEV charging stations in support of its technology developments. It promotes open innovation and partners with private firms, universities, government agencies and research centres, both in Québec and abroad. These partnerships allow IREQ to develop, industrialize and market the technologies resulting from its innovation projects.

About Hydro-Québec

Hydro-Québec is Canada's largest electricity producer and ranks among the world's leading hydropower producers. It also transmits and distributes electricity. Its sole shareholder is the Québec government. It uses mainly renewable generating options, in particular hydropower, and supports the development of wind energy through purchases from independent power producers. Its research institute, IREQ, conducts R&D in energy efficiency, energy storage and other energy-related fields. Hydro-Québec invests $100 million per year in research.

About Focus Metals

Focus Metals Inc. is an emerging mid-tier junior mining company, a technology solutions supplier and a business innovator. It is the owner of the highest-grade (16%) technology graphite resource in the world. The company's goal is to assume a dominant industry leadership position by becoming the lowest-cost producer of technology-grade graphite. As a technology-oriented enterprise with a view to building long-term, sustainable shareholder value, Focus Metals is invested in the development of graphene applications and patents through Grafoid Inc.

Forward-Looking Statements

This News Release may contain or refer to "forward-looking statements" that reflect Management's expectations regarding Focus Metals' future growth, results of operations, performance, and business prospects and opportunities. These statements reflect Management's current beliefs at the time of this news release and are based on information currently available to Management. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of the Company, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Management's expectations are exploration risks detailed herein and from time to time in the filings made by the Company with securities regulators. While the Company anticipates that subsequent events and developments may cause its views to change, it specifically disclaims any obligation to update these forward-looking statements, except in accordance with applicable securities laws. Accordingly, readers are advised not to place undue reliance on forward-looking information.

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:

Gary Economo, President and CEO
Focus Metals Inc.
Ottawa
613 691-1091, ext. 101
[email protected]
www.focusmetals.ca

Louis-Olivier Batty, Media Relations
Hydro-Québec
514 289-4214
[email protected]