According to the British Colombia Ministry of Energy and Mines Mineral Deposit Classification, graphite deposits are within the metamorphic hosted group of deposits and can occur as:

• Microcrystalline Graphite (BC Deposit # P03)

• Crystalline Flake Graphite (BC Deposit # P04)

• Vein Graphite (BC Deposit # P05)

The mineralization at the Lac Knife project is consistent with the description of a crystalline flake graphite deposit. These types of deposits are described as being commonly hosted by porphyroblastic and granoblastic marbles, paragneisses and quartzites. The alumina-rich paragneisses and marbles in upper amphibolite or granulite grade metamorphic terrains are the most favourable host rocks. Minor feldspathic
intrusions, pegmatites, and iron formations also contain disseminated natural flake graphite.

The Lac Knife deposit corresponds to the higher grade type of mineralization associated with fold hinges. Simandl and Kenan stated that the grade and tonnage of producing mines and development projects can vary substantially. The median grade and size is quoted at 9.0% Cg and 2.4 million tonnes respectively meaning the resource grade and size of the Lac Knife project is above the median.

The mineralization has been categorized by Focus into 3 types: massive, semi-massive and low grade mineralization categories. All three types are intercalated within the mineralized envelope (repetition of several massive horizons with semimassive and low grade type horizons) with both edges of the deposit characterized by low grade type mineralization. The massive type forms metric scale bands (up to 25 m thick) that contain more than 60% graphite with up to 15-20% sulphides. The semimassive type, contains 20 to 60 percent graphite, and is characterized by metric to decametric horizons intercalated with the massive and low grade types. The low grade type (5-20% graphite; Figure 7.4) forms horizons a few meters thick that are intercalated with the two previous mineralization types and is present on both eastern and western edges of the deposit forming a zone of 5-10 m of transition between deposit and barren host rocks. Transition from the low grade type to the barren quartzofeldspathic paragneiss is often less than 1 m.

Graphite occurs as flakes ranging from 2 mm to very fine grain size in hand sample. Commonly the coarser flakes appear to be associated with Cg grades below ~25% and finer flakes above that. The industrial term for coarse flake is 0.2 mm (200 microns), so that even “fine-grained” to the eye can still provide high quality natural flake graphite.

The mining method selected for the Project is a conventional open pit, truck and shovel, drill and blast operation. Vegetation, topsoil and overburden will be stripped and stockpiled for future reclamation use. The ore and waste rock will be mined with 10 m high benches, drilled, blasted and loaded into rigid frame haul trucks with hydraulic excavators.

A topsoil and overburden stockpile has been designed on the west side of the open pit to the south of the plant site. Material that will be placed in this stockpile will be used for future reclamation.

A waste rock pile has been designed between the plant site and the overburden stockpile. The waste rock pile will be built in 10 m high lifts and compacted by a dozer.

A mine plan was developed which supplies the required amount of ore to produce 44,300 tonnes of concentrate per year for the 25-year life of the open pit. Mining will begin in a starter pit which will supply the majority of the run of mine ore for the first five (5) years of the operation. The purpose of the starter pit is to maximize the feed grade and minimize the strip ratio during the early years of production. The total material mined per year during the 25-year life of the open pit ranges from 400 kt in Year 1 to a maximum of 1,317 kt in Year 8. The average annual grade varies from 14.0 % to 17.6 % Cg during the mine life.

The mining operations will be carried out by a contractor who will operate the mine seasonally, five (5) days per week, ten (10) hours per day, seven (7) months of the year, from May until the end of November. Overburden removal will take place during the winter to take advantage of the frozen ground conditions. Since the concentrator is designed to operate year round both on the day and night shift, an ore stockpile was designed in order to maintain the run of mine ore feed to the plant during the nights, weekends and when the mine is shutdown during the five (5) month period.

The contractor will use a fleet of three (3) - five (5), 36-tonne haul trucks, a hydraulic excavator with a 6 m3 bucket, one (1) or two (2) diesel powered track drills as well as a fleet of support and service equipment. Blasting will be carried out using bulk emulsion with a powder factor of 0.39 kg/t.

The graphite concentrate will be recovered by froth flotation. The upgrading will be done by polishing and column flotation.

The processing facility or concentrator consists of a crushing area, beneficiation, dewatering and bagging areas.

The concentrator is designed to produce a graphite concentrate containing 98% C(t) from an ore containing 14.8% C(t). To achieve this concentration the beneficiation processes include crushing, grinding, conventional flotation, polishing, magnetic separation and column flotation. Further the facility will perform thickening, filtration, drying, creening, bagging and material handling.