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Focus Accelerates Purchase of 70% of JPQ, Owners of Bayovar 12 Phosphate Project, via Arrangement of a Credit Facility

VANCOUVER, BRITISH COLUMBIA–(Marketwired – March 10, 2015) –

Focus Ventures Ltd. (TSX VENTURE:FCV) (“Focus” or the “Company”) is
pleased to report on several transactions that will allow it to purchase
70% of Juan Paulo Quay S.A.C. (“JPQ”), the title holder of the Bayovar
12 concession in Peru, and provide immediate funding for its ongoing
operations including the Preliminary Economic Assessment study.

Acquisition of 70% of JPQ

The Company’s Peruvian subsidiary, Agrifos Peru S.A.C. has signed a
purchase agreement with the shareholders (the “Vendors”) of JPQ,
titleholder of the Bayovar 12 concession, whereby the Company will pay
to the Vendors US$4.0 million to purchase an outright 70% interest in
shares of JPQ (the “Bayovar Interest”), and thereby cancelling its
previously granted option agreement to earn such interest. The terms of
the purchase agreement are as follows:

  • the Company will purchase the Bayovar Interest by paying US$4 million cash to the Vendors;
  • the Company will commit to spending a minimum of US$14 million in
    development of the Project, without dilution to the Vendors’ remaining
    30% interest;
  • if after spending US$14 million, further funding is needed to
    determine the viability of a phosphate operation, the Company will make
    additional expenditures of up to US$4 million of which 30% will be
    treated as a loan to the Vendors;
  • the Company has agreed to complete a pre-feasibility study by
    December 31, 2015 or else a US$500,000 penalty payment will be due to
    the Vendors, plus additional $500,000 penalty payments for each
    additional year that the study is not completed, to a maximum of
    US$2,000,000 in penalty payments;
  • port and loading services for the future export of phosphate rock
    will be provided by the Vendors at commercial rates at the JPQ Maritime
    Terminal located 40km west of the Bayovar 12 Project;
  • the Vendors will maintain responsibility for gypsum operations on
    the concession until the completion of the pre-feasibility study; and
  • the Company will retain a right of first refusal for the purchase of the Vendors’ 30% interest in JPQ.

Loan Facility

In order to provide funding for the purchase of the Bayovar Interest
and for further advancement of the Bayovar 12 Project, the Company has
executed a Term Sheet with Sprott Resource Lending Partnership (the
“Lender”) in respect of a US$5.0 million secured loan facility (the

The Facility is subject to a number of conditions, including among
other things completion of non-technical due diligence, completion of
loan documentation, approval by the Lender’s partners, and approval by
the TSX Venture Exchange. Focus and the Lender are targeting
satisfaction of the conditions precedent and first draw down of the
Facility on or about 25 March, 2015.

Key terms of the Facility are:

  • Facility amount of US$5.0 million, with an interest rate of 12% per annum;
  • Facility to be repaid by September 30, 2016;
  • Repayable prior to maturity, in full or in part, at the option of
    Focus, provided a minimum of 6 months of interest has been paid; and
  • Structuring fee of US$75,000 cash, a drawdown fee equal to 2.5% of
    the amount drawn, and a commitment fee (“Commitment Fee”) of 1,250,000
    warrants to purchase shares of Focus exercisable for five years at a 30%
    premium to market.

In addition, Focus has agreed to an exclusivity period through April
27, 2015, where it is restricted from engaging in discussions with
alternate finance providers. Should Focus elect not to proceed with the
Facility (in a situation where the Lender is prepared to complete the
closing and advance the Facility), Focus is required to pay a fee to the
Lender equal to 50% of the Commitment Fee.

The securities referred to in this news release have not
been, and will not be, registered under the United States Securities Act
of 1933, as amended, and may not be offered or sold in the United
States or to, or for the account or benefit of, U.S. persons absent
registration or an applicable exemption from the registration
requirements of such Act. This news release shall not constitute an
offer to sell, nor the solicitation of an offer to buy, any securities.
Any public offering of securities in the United States must be made by
means of a prospectus containing detailed information about the company
and management, as well as financial statements.

Sprott Resource Lending Partnership is a natural resource lender
focused on providing financing to mining and oil and gas companies. In
July 2013, Sprott Inc. completed the acquisition of Sprott Resource
Lending Partnership which now operates as a subsidiary of Sprott Inc.

Royalty Sale

In order for the Company to continue funding the Bayovar 12 Project
through its current operations and engineering studies, it has agreed to
sell to Radius Gold Inc. (“Radius”) (TSX VENTURE:RDU) a royalty equal
to 2% on the Company’s 70% interest in future phosphate production from
the Bayovar 12 concession for the sum of US$1.0 million. The Company
will have the right for 12 months to buy back one-half of the royalty
for US$1.0 million. If Radius decides to sell any of its royalty
interest in the future, the Company will retain a first right of

Focus and Radius have two common directors, and the transaction is subject to TSX Venture Exchange approval.

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