|April 06, 2011|
Formation Metals Cobalt Mine Commencement of Construction Targeted for Q2, 2011
|Vancouver, B.C., April 6, 2011 Formation Metals Inc. (FCO-TSX) ("Formation" or the "Company") is pleased to provide an update on the status of its 100% owned Idaho Cobalt Mine and other recent corporate developments. |
• $80 Million Raised in an Equity Financing & Retirement of Debt
• JDS Energy & Mining Integrating with Company Operations
• Internal Pilot Tests Underway at Hydrometallurgical Complex
• Commencement of Idaho Cobalt Mine Construction targeted for Q2, 2011
$80 Million Equity Financing & Retirement of Debt
On March 10, 2011 the Company announced that it had completed an $80 million equity financing with a syndicate co-led by Byron Capital Markets Ltd. and Cormark Securities Inc. and including Jennings Capital Inc. acting as Agents for the transaction. The financing consisted of units priced at $1.50 per unit with each unit comprised of one common share of the Company and one half of one common share purchase warrant. The financing was not available to U.S. retail investors. Each whole warrant entitles the holder to purchase one common share of the Company for 36 months at a price of $2.00. The warrants are listed on the Toronto Stock Exchange under the symbol FCO.WT. A portion of the proceeds from the financing were used to repay the balance owing on an $8,000,000 unsecured convertible debenture issued to Coalcorp Mining Inc. on May 7, 2010. On March 14, 2011, under a mutually agreed to settlement of cash and shares, Coalcorp surrendered the debenture to the Company. The remaining proceeds from the financing are being used to advance the engineering and procurement of the Idaho Cobalt Mine with the commencement of mine construction targeted for Q2, 2011.
JDS Energy & Mining Integrating with Company Operations
The Company's management, in-house and out sourced engineering, technical and administrative teams at the cobalt mine office in Salmon, Idaho, and at the hydrometallurgical complex in Kellogg, Idaho are in the process of integrating JDS Energy & Mining Inc.'s ("JDS") (see Company's January 6, 2011 news release) construction personnel into our operations. This process includes updating the cobalt mine plan, optimizing flow sheets at both the cobalt mine and the hydrometallurgical complex, meeting with all engineering, procurement and construction subcontractors and finalizing numerous construction contract bids with the intent of ensuring a smooth transition from mine planning to mine construction to operations. Some of the particulars are as follows:
• Engaged tram manufacturer to update plans based on new portal location as a result of mine optimization studies
• Engaged Samuel Engineering to complete final design engineering on mine, mill and the hydrometallurgical complex
• Engineering work to upgrade transportation routes underway
• Geotechnical drilling scheduled for later this month
• Engineering underway to complete tailings site, portal bench, access roads, and site roads
• Quotes received from engineering firms to complete paste backfill design
• Optimization of water treatment plant design to reduce capital and operating costs
• Engineers completing final design and procuring equipment for powerline interconnection
• JDS verifying capital costs and updating financial models
Internal Pilot Tests underway at Hydrometallurgical Complex
Internal full time pilot tests are currently being conducted at the hydrometallurgical complex to help ensure a seamless commissioning of the plant through start-up to full production and to gain additional on-site experience with the processing system. These tests are expected to identify minor issues that could help improve the already exceptional metallurgical results.
Commencement of Idaho Cobalt Mine Construction for targeted for Q2, 2011
"We are pleased to see the Idaho Cobalt Project move towards the construction phase, with construction management services provided by JDS. We know there is more work ahead, but with the recent equity raise and a talented team working together, we fully expect to be in a position to break ground and start excavations once the snow line has retreated from the higher elevations." commented Mari-Ann Green, CEO of Formation Metals Inc. "We are all looking forward to a very busy spring and summer", she concluded.
FORMATION METALS INC.
About the Idaho Cobalt Project
The 100% owned Idaho Cobalt Project is a unique, fully permitted primary cobalt deposit that will be capable of producing high purity cobalt metal. Cobalt is used in a wide variety of environmental and high-tech applications that include the re-chargeable battery and aerospace sectors.
About Formation Metals Inc.
Formation Metals Inc. is a well established, mineral exploration, development and refining company that is dedicated to the principles of environmentally sound mining and refining practices, and believes that environmental stewardship and mining can co-exist. Formation trades on the Toronto Stock Exchange under the symbol FCO.
E.R. (Rick) Honsinger, P.Geo., V.P. Corporate Communications
Formation Metals Inc., 1730 -- 999 West Hastings Street, Vancouver, BC, V6C 2W2
Tel: 604-682-6229 - Email: email@example.com -- Web: formationmetals.com
The statements contained in this news release in regard to Formation Metals Inc. that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Formation Metals Inc.'s beliefs, expectations, hopes or intentions regarding the future. All forward-looking statements are made as of the date hereof and are based on information available to the parties as of such date. It is important to note that actual outcome and the actual results could differ from those in such forward-looking statements. Factors that could cause actual results to differ materially include risks and uncertainties such as technological, legislative, corporate, commodity price and marketplace changes.