Disclosure: Focus Graphite Inc. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
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Price and Volume (1-year)
* Sprott Critical Materials ETF
* Qualified Person: Réjean Girard, P.Geo. (QC), President of IOS Geosciences Inc., a consultant to Focus Graphite. Focus Graphite Inc. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions. All figures in C$; commodity prices in US$.
Aims to supply graphite anodes for lithium-ion batteries in North America
Portfolio Summary
FMS vs Graphite Juniors
Source: S&P Capital IQ / Various / FRC
In December 2025, FMS received $14M in non-repayable government funding to build a high-purity graphite plant for military, defence, aerospace, and advanced technology applications
FMS stands out among comparable projects for its superior resource scale and grade, combined with below-average projected CAPEX and OPEX
Source: FRC
FMS is up 333% YoY, significantly outperforming the comparables average gain of 33%
Tétépisca Graphite Project (100% owned)
The updated resource estimate incorporates drilling since 2022, expanding the database to 150 holes (26,095 m) from 106 holes (16,467 m).
Source: Company / FRC
We believe this upgrade is transformational, positioning Tétépisca among the world’s largest and highest-grade graphite projects
Indicated resources (higher-confidence category) increased 96%; Inferred resources (lower-confidence) increased 49%
Indicated resources now account for 84% of total resources (previously 80%), reflecting higher confidence
Block Model
* Red shows high-grade areas, while orange/yellow and green represent mid-to-high and moderate grades
Source: Company
Grades declined by 0.5 pp to 10.2%, but remain well above the typical 3–8% range for graphite projects
High-grade deposits are preferred due to their potential for stronger economics and lower operating costs
Next steps: FMS plans to conduct metallurgical testing to determine recovery rates, which will support an independent economic study (PEA) evaluating the project’s economic viability.
Lac Knife Graphite Project (100% owned)
FMS is also simultaneously advancing its flagship Lac Knife graphite project, a more advanced-stage asset. Next steps include product testing with potential buyers, securing supply agreements, completing the environmental assessment (now in its final stages), permitting, and project financing.
With a 25+ year mine life, the project offers potential for long-term, stable graphite supply for prospective buyers
Recent Developments
Source: FRC
If successful, these programs could support future partnerships, customer engagement, funding opportunities, and commercialization efforts
Project Development Stages
Permitting underway; production expected by 2028-2029
2023 Resource Estimate (4.0% Cg cut-off)
Source: Company
Ideal for open-pit mining, with one of the world’s highest graphite grades at 15% Cg
2023 Feasibility Study Highlights
Source: Company / FRC
After-tax NPV8% of $286M, and IRR of 23%; we view an IRR above 20% as very attractive
FMS’s MCAP is only $42M, suggesting the market is undervaluing Lac Knife, and assigning no value to Tétépisca
The study used a weighted average product price of $1,679/t vs the current spot price of $1,000-$1,500/t
Financials
Healthy balance sheet, with in-the-money options and warrants that could add up to $5M
Source: FRC / Company
FRC Comparables Valuation
Source: S&P Capital IQ / Various / FRC
Despite attractive project metrics (large tonnage, high grade, and low costs), FMS is trading at just $3/t (previously $4/t), compared with the sector average of $23/t (previously $21/t)
Applying the sector average to FMS’s resources, we arrived at a comparables valuation of $2.78/share (previously $1.53/share)
Source: FRC
The average of our DCF and comparables valuation is $2.03/share (previously $1.27/share)
We reiterate our BUY rating, and raise our fair value estimate from $1.27 to $2.03/share, reflecting the significant resource growth at Tétépisca. FMS is advancing two large-scale, high-grade graphite projects in Quebec, highlighted by a transformational resource expansion at Tétépisca, and continued progress at the flagship Lac Knife project. Despite the scale and quality of its assets, the company trades at a significant discount to its comparables.
Risks
We believe the company is exposed to the following key risks (not exhaustive):
We are maintaining our risk rating of 5 (Highly Speculative)
