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INDEPENDENT EXPERT REPORT SAYS FOCUS PLACEMENT TO SHANDONG GOLD IS “FAIR AND REASONABLE”

Focus Minerals Ltd. (ASX: FML), a leading Australian gold producer and explorer, said today the Independent Expert report on the Company’s plan to raise approximately $225 million through  the placement of new shares with Shandong Gold International Mining Corporation Limited (“Shandong Gold”) (the “Placement”) has concluded that the transaction is “fair and reasonable” to Focus shareholders.

The Independent Expert report has been prepared by BDO Corporate Finance and was today sent to Focus’ shareholders, along with a Notice of Annual General Meeting and Explanatory Memorandum. The Annual General Meeting will be held on 30 November 2012 in Perth.

Focus Directors have unanimously recommended shareholders support the Placement in the absence of a superior proposal and subject to the expert not changing its view prior to the general meeting. The Independent Expert Report notes that, if approved by Focus shareholders, the Placement is expected to deliver a number of advantages, including the following:

• Provide an immediate capital injection of $225 million to assist in fuelling an accelerated growth of Focus’ projects and operations as well as strengthening Focus’ balance sheet;
• Introduce a large, supportive investor in Shandong Gold that will allow for the exchange of technical knowledge and access to Chinese markets for potential future equity and debt funding;
• Provide expertise at Board level to assist with the exploration of Focus’ large tenement holdings; and
• Increase the market capitalisation of Focus by at least $225 million, which may lead to a re-valuation of Focus shares by the market and an increased level of investment.

Also, the Foreign Investment Review Board has advised Shandong Gold that there are no objections to the Placement in terms of the Government’s foreign investment policy.

Under the terms of the Placement, Shandong Gold, a subsidiary of one of China’s three largest gold producers by production, will acquire 51% of Focus (on a fully diluted basis) by contributing $225 million to subscribe for approximately 4.5 billion new fully paid ordinary Focus shares at 5 cents per share.