Metals Prices up to $80 Million Equity Offering
NOT FOR DISTRIBUTION TO UNITED
STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
For Immediate Release
Vancouver, B.C., March 03, 2011, Formation Metals Inc. (FCO-TSX) (the
"Company") announced today that it has entered into an
agency agreement with Byron Capital Markets Ltd. and Cormark
Securities Inc., as co-lead agents, and Jennings Capital Inc. (collectively,
the "Agents") in respect of the offering contemplated by the
preliminary short form prospectus of the Company dated January 26, 2011.
Under the terms of the agency agreement, the Agents will offer (the
"Offering") on a best efforts basis, units of the Company (the
"Units") for gross proceeds of up to a maximum of $80,000,000
(see Company News Release dated January 27, 2011). Each Unit is comprised
of one common share in the capital of the Company (a "Common
Share") and one half of one Common Share purchase warrant, at a
price of $1.50 per Unit. Each whole Common Share purchase warrant (a
"Warrant") will entitle the holder to purchase one Common Share
at a price of $2.00 for a period of 36 months following the closing of
the Offering expected to take place on March 10, 2011 or as otherwise
agreed upon by the Company and the Agents.
The Agents have been granted an option, exercisable at any time until 30
days following the closing of the Offering, to purchase additional Units
equal to 15% of the number of Units sold pursuant to the Offering at the
issue price of the Units, to cover over-allotments, if any and for market
In consideration for the services to be rendered by the Agents under the
Offering, the Agents will receive a cash commission of 6% of the gross
proceeds of the Offering (including any Units issued as a result of the
exercise of the Agents' over-allotment option). At the Agent's option,
the commission may be paid to the Agents in whole or in part, by the
issuance of Units. In no case will the number or principal amount of the
securities issued as compensation to the Agents, on an as-if-converted
basis, in the aggregate exceed 10% of the total of the Offering plus any
securities that would be acquired upon the exercise of the over-allotment
option. The Agents will also receive broker warrants to purchase an
aggregate number of Common Shares equal to 6% of the number of Units
issued under the Offering (including Units issued upon exercise of the
Agents' over-allotment option).
A final short form prospectus dated March 02, 2011 containing important
information relating to the Offering has been filed with the securities
commissions or similar authorities in all of the provinces of Canada,
except Qu�bec. The Company expects to receive a receipt for the final
short form prospectus in due course. The Offering is subject to certain
conditions including, but not limited to, the receipt of all necessary
approvals, including the acceptance of the Toronto Stock Exchange.
The Company plans to use the proceeds of the Offering to fund the
continuation of engineering, procurement and construction at the Idaho
Cobalt Project, for reclamation bonding requirements, for the repurchase
of an unsecured convertible debenture and for general corporate purposes.
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. The Company trades on the Toronto
Stock Exchange under the symbol FCO.
FORMATION METALS INC.
For further information please
E.R. (Rick) Honsinger, P.Geo.
V.P. Corporate Communications
Formation Metals Inc., 1730 -- 999 West Hastings Street, Vancouver, BC,
Tel: 604-682-6229 - Email: email@example.com -- Web:
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 securities have not been and will not be
registered under the United States Securities Act of 1933, as amended
(the "U.S. Securities Act") or the securities laws of any state
of the United States, and may not be offered or sold, directly or
indirectly, in the United States unless registered under the U.S.
Securities Act and applicable securities laws of any state of the United
States or in reliance on an exemption from such registration
requirements. This news release does not constitute an offer to sell, a
solicitation of an offer to buy any of the Company's securities set out
herein in the United States.
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.