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Formation
Metals Closes $77.7 Million Bond Issue for Idaho Cobalt Project
Vancouver, B.C., December 31, 2010
Formation Metals Inc. (FCO-TSX) ("Formation") is pleased to announce that its
wholly owned subsidiaries, Formation Capital Corporation, U.S. (the
"Company") and Essential Metals Corporation, will be the sole
beneficiaries of US $77.7 million in Federal Stimulus Program Recovery
Zone Facility Bonds that were issued prior to their December 31, 2010
deadline (see Formation News Release dated December 16, 2010). Proceeds
from the sale of the bonds are to be used exclusively for the development
of its 100% owned Idaho Cobalt Project ("ICP"). Formation continues
to work to secure credit approval for long term bank financing (see news
release dated November 30, 2010) and raise the additional capital
required to complete construction of the ICP. The capital costs of the
project are estimated in the ICP feasibility study at $138.7 million.
The bonds were issued by The Industrial Development Corporation of Lemhi
County, Idaho and The Industrial Development Corporation of Shoshone
County, Idaho, after meetings were held on December 27 and December 30,
2010 in Lemhi and Shoshone Counties respectively. The investment bankers
Thornton Farish Inc, acted as the underwriter
for the Recovery Zone Facility Bonds.
"I am pleased that we were able to get these bonds issued before
they expired", stated Mari-Ann Green, Formation's Chairman and
C.E.O. She continued, "These types of bonds are ideally suited for
mine financing, as many tax exempt bonds carry low floating interest
rates which typically use the SIFMA Municipal Swap Index as a benchmark
and are long term, in our case in excess of 25 years. Having this money
in place will go a long way to helping the Company secure the credit
approval and the remaining funds required. I am excited for the people of
Idaho and in particular, the local Lemhi and Shoshone County residents
that will benefit from the 200 or so jobs the cobalt project is expected
to generate during the life of the mine as well as the additional
positions that will be required for construction. We expect construction
will begin in earnest this spring."
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 aero-space
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.
"Mari-Ann Green"
Mari-Ann Green,
C.E.O.
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: inform@formationmetals.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.
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