Focus Minerals Ltd (ASX: FML)

Focus Minerals Ltd (ASX: FML – “Focus”) has moved to consolidate its position as an emerging mid-tier Australian gold and nickel producer after signing an agreement to exclusively negotiate in respect of the proposed acquisition by Focus of the 50% interest in the 1.6 million ounce Coolgardie Gold Project in Western Australia (“Proposed Acquisition”) held by its joint venture partner, Canadian-based Committee Bay Resources Ltd. (TSXV: CBR – “Committee Bay”) (“Exclusivity Agreement”).

The consideration payable for the Proposed Acquisition is likely to be payable in both cash and shares and is expected to signal a key turning point for Focus as it gears up for first gold production scheduled for April this year from the high-grade Perseverance Project at Coolgardie, positioning it to join the ranks of Australian gold producers. Focus’ objective is to become a 100,000 ounce per annum producer within the next three years.

The Proposed Acquisition, which would be subject to shareholder approval, would give Focus 100% ownership of the Redemption Joint Venture assets at Coolgardie, including an extensive resource inventory within multiple deposits totalling 20.8 million tonnes at 2.46g/t Au for 1.649 million ounces (refer note 1), the fully permitted 1.2mtpa Three Mile Hill gold processing facility (currently on care and maintenance), and a highly prospective 210km² tenement package offering an outstanding pipeline of exploration and development opportunities.

Note 1 – Please refer the Resource Listing contained within the 2007 Annual Report and subsequent Perseverance upgrade ASX release dated 10 October 2007.

The Company has mandated international specialist banking group Investec Bank (Australia) Ltd. to be the debt provider for the Perseverance project.

If the terms of the Proposed Acquisition are finalised, Committee Bay will retain exposure to the future upside arising from the Company’s transition to gold production and the broader development of the Coolgardie Project through its expressed interest in becoming a significant shareholder in the Company.

Execution of the Exclusivity Agreement and negotiations in respect of the Proposed Acquisition reflect Committee Bay’s decision to focus on its extensive portfolio of international mineral assets in Nunavut, Latin America and elsewhere in Australia, and its view that Focus is better placed for logistical and geographical reasons to manage the development of the Coolgardie asset. Committee Bay remains strongly supportive of Focus’ development strategy.

Focus is gearing up to commence initial gold production at Coolgardie in April at the high-grade Perseverance Project (Indicated Resource of 92,066oz at an average grade of 6.4g/t Au) after completing a positive Feasibility Study in December 2007. This Project is forecast to yield base case production of 64,187 ounces over 21 months, with upside to more ounces and a higher gold price.

A key element of the Exclusivity Agreement is to effectively suspend the Redemption Joint Venture between 1^st January 2008 and 31^st March 2008. During this period, Focus accepts full responsibility for the Coolgardie Project. This will enable planning for the commencement of mining at Perseverance to continue, unaffected by the negotiations that will occur with CBR to purchase their 50% of the project. Both the Boards of FML and CBR have met and approved the commencement of mining, however, if subsequent commercial terms for the purchase of CBR’s 50% of the RJV cannot be concluded, CBR will reimburse FML for 50% of expenditures incurred on the Coolgardie Project between the 1^st January 2008 and 31^st March 2008 (which is the date when the Exclusivity Agreement expires), excluding any expenditures made in January, being part of an earlier RJV cash call.

Commenting on the landmark Exclusivity Agreement, Focus Minerals’ Chairman, Mr Don Taig, said: “We are very pleased to have signed this important agreement with Committee Bay, which – subject to acceptable terms and shareholder approvals - will deliver a sensible rationalisation of the ownership structure of the Coolgardie Gold Project and an exciting opportunity for Focus to consolidate its position as a leading Australian gold company.”

“It is envisaged that Committee Bay will retain significant exposure to and involvement with the development of these outstanding assets through a large shareholding in the Company, with the transaction enabling us to get on with the business of bringing the Coolgardie region back to life as a significant gold and nickel producer as rapidly as possible,” Mr Taig added.

“A successful outcome to this strategy will give us the capacity to fast-track our transition to gold and nickel production, while also developing our near term tenement packages to deliver on our goal of becoming a 100,000 oz producer with in-house gold processing capability as soon as possible,” he continued.

“2008 will be a pivotal year for Focus as we move into production, initially at Perseverance,” he commented. “Furthermore, the acquisition will put us in a very strong position to develop the broader Coolgardie assets in a timely and efficient fashion at a time of historic strength in the gold market.”

Focus Minerals will provide further details to the market regarding the acquisition terms and funding arrangements as they are finalised.

ENDS

COMPETENT PERSON’S STATEMENT

The information in this report relating to Resources and Reserves are based on work supervised by Mr Chuck McCormick who is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr McCormick has the relevant experience as a “Competent Person” as defined in the 2004 edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves in relation to the mineralisation reported on. Mr McCormick is Exploration Manager of Focus Minerals Ltd and consents to the inclusion of the material in the form and content in which it appears.

BACKGROUND INFORMATION – FOCUS MINERALS LTD

Focus Minerals Ltd (ASX: FML) is an Australian-based exploration and development group whose focus is to become a significant gold and nickel producer in the Coolgardie-Kalgoorlie-Widgiemooltha region of Western Australia.

Focus Minerals - through its Joint Venture with Committee Bay Resources - is the largest landholder in the Coolgardie Gold Belt located in Western Australia, 560km east of Perth and 35km west of the ‘Super Pit’ in Kalgoorlie-Boulder. More than 2.6 million ounces of gold has been produced from the Coolgardie gold belt alone since 1892. Focus holds the mineral rights to more than 210sq km of tenements including Measured, Indicated and Inferred Resources exceeding 1.6 million ounces of gold as well as the 1.2mtpa Three Mile Hill processing plant.

Focus Minerals is also fast tracking development of its wholly-owned Nepean Nickel Project (current estimated resource totalling 591,300t @ 2.2% Ni) located 25km south of Coolgardie. Focus has a view of recommencing mining operations from the historic production centre in 2008.

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