|Monday, September 27, 2010
Formation Metals Engages Auramet for Cobalt Mine Finance
Vancouver, B.C., September 27, 2010 Formation Metals Inc. (FCO-TSX) ("Formation" or the "Company") is pleased to announce that it has engaged Auramet Trading, LLC ("Auramet") of Fort Lee, New Jersey, to assist the Company in completing the process of mine construction financing for its 100% owned Idaho Cobalt Project ("ICP"). Auramet is experienced in all aspects of mine finance including offtake, volumetric production payments, debt arrangements, and structuring security for various forms of bonds, including tax exempt bonds.
"We are very pleased that Auramet has agreed to assist us with the financing of the ICP", commented Mari-Ann Green, CEO of Formation Metals Inc. "We have a long standing history with Auramet going back to 2004 when we first engaged their services to develop a marketing strategy for our Sunshine Precious Metals refinery that has since become a self-sustaining, profitable enterprise. We have every confidence in Auramet's ability to help develop and support strong relationships between lenders and borrowers."
Auramet's team is lead by Jim Verraster, Mark Edelstein and Justin Sullivan. Both Jim Verraster and Mark Edelstein have extensive experience in the banking industry while Justin Sullivan has significant experience as a bond and finance lawyer working on large publicly issued project financings. They offer a wide variety of services to their mining industry clients including physical metal trading, metals merchant banking, financial advisory services and bridge loans.
In the Company's News Release dated September 16, 2010, Formation Metals announced it had received a Stimulus Act Recovery Zone Facility Bond allocation of US$46.7 million from the State of Idaho, and that it was in the process of finalizing the amount of ICP project capital costs eligible for financing with Solid Waste private activity Bonds which is expected to be US$45.4 million. The Recovery Zone Facility Bonds along with the Solid Waste Bonds would total US $92.1 million. They are both tax exempt and will require supporting Letters of Credit. The Company, with Auramet, is in the process of evaluating a number of different sources suitable for providing this necessary support.
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.
Formation Metals Inc. 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.
FORMATION METALS INC.
For further information please contact:
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
This press release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Generally, forward-looking statements can be identified by the use of forward- looking terminology. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws. Further information on the Company is available at www.sedar.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.