VANCOUVER, May 11, 2015 /PRNewswire/ - Formation Metals Inc. (FCO-TSX) ("Formation" or the "Company") is announcing that, as per the Company's April 22, 2015 news release, a technical report (the "Technical Report") detailing the results of a positive Preliminary Economic Assessment ("PEA") for the Company's Idaho Cobalt Project ("ICP") has been filed on SEDAR (www.sedar.com) and on the Company's website at www.formationmetals.com.  The ICP is owned 100% by the Company's wholly owned subsidiary, Formation Capital Corporation, U.S.  The PEA was prepared by Samuel Engineering of Denver, Colorado in conjunction with Mine Development Associates of Reno, Nevada for an environmentally permitted underground primary cobalt mine with by-products copper and gold located in Idaho, USA. 

Economic highlights of the Technical Report are as follows:

(Note: All monetary values listed above are in US$)

"We believe the shift from producing high purity cobalt metal to producing cobalt chemicals positions Formation and its shareholders to capitalize on the expanding battery sector that includes electric cars, home power units and mobile devices.  We are bullish on the expanding use of cobalt in the battery sector which now accounts for 42% of all cobalt consumed and we believe cobalt supply deficits are looming," stated Mr. Paul Farquharson, President and C.E.O. of Formation.  He continued, "The filing of the Technical Report represents another significant milestone in the advancement of the ICP towards feasibility and production".

Concurrent with the finalization and SEDAR filing of the Technical Report, management commissioned metallurgical test work in January 2015 suitable for a feasibility study on samples from the project to characterize the final end products Formation plans on producing.  When completed, this information combined with the data from the PEA will further assist management in defining a clear path moving forward with a feasibility level technical report.  Requests for quotes are being prepared to advance the project towards feasibility and marketing campaigns to increase awareness of Formation and the ICP are being scheduled. 

The PEA is based on an underground mine with a target production rate of 800 tons per day with a weighted average annual production of 2,771,000 lbs of cobalt, 4,533,000 lbs of copper and 3,600 oz of gold over a 12.5 year mine life with an estimated pre-production period of 21 months utilizing a 0.25% cobalt cut-off used to define stope outlines.

The following table outlines the mineral resources of which the LOM production is based:

Inferred mineral resources are considered too speculative to have economic considerations applied to them.  Please refer to the disclosure at the end of this news release.

The economic model uses a 35% corporate tax rate and an 8.5% discount rate, resulting in an after tax NPV of $113.45M and an IRR of 24.07%.  Sensitivities of the project to discount rates are outlined in the table below.

Additional information on the PEA, including additional life of mine economic results, production, metal prices, terms, revenue composition, capital costs, operating costs, mineral resources, mining methods, recoveries, project risks and opportunities can be found in the SEDAR filed Technical Report and are summarized in the Company's news release dated April 22, 2015, also available on SEDAR and on the Company's website at www.formationmetals.com.

The Qualified Persons as defined by National Instrument 43-101 responsible for the PEA and have approved the scientific and technical disclosure in this news release are listed below:

The ICP remains the sole, near term, fully environmentally permitted, primary cobalt deposit in the United States and offers a unique potential for North American consumers to secure an ethically sourced, environmentally sound supply of battery grade cobalt chemicals, mined safely and responsibly in the United States.  Cobalt is an essential element utilized in the production of rechargeable batteries required for portable electronic devices and electric and hybrid electric vehicles. 

E.R. (Rick) Honsinger, P.Geo., Vice President of the Company, is the Qualified Person as defined by National Instrument 43-101 who has supervised the preparation of this news release and has approved its contents.

Formation Metals Inc.

"J. Paul Farquharson"

J. Paul Farquharson
President & C.E.O.

The Company cautions that the PEA discussed in this news release is preliminary in nature, and is based on technical and economic assumptions which will be evaluated in further studies.  The PEA is based on the current (as at March 10, 2015) ICP estimated resource model, which consists of material in both the measured/indicated and inferred classifications.  Inferred mineral resources are considered too speculative geologically to have technical and economic considerations applied to them outside the scope of a PEA.  The current basis of project information is not sufficient to convert the mineral resources to mineral reserves, and mineral resources that are not mineral reserves do not have demonstrated economic viability.  Accordingly, there can be no certainty that the results estimated in the PEA will be realized.

In addition, this news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation.  Statements in this news release pertaining to projected revenues and cash flows, quantity and grade of mineralized materials, estimated mineral prices and the continued expansion of the market for battery grade cobalt chemicals are forward-looking statements.  These forward-looking statements are based on assumptions and address future events and conditions and 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.  Many of the assumptions respecting projected revenue, cash flow and quantity of mineralized materials will be set out in detail in the Preliminary Economic Assessment.  Such projections are and will inevitably always be dependent on assumptions about future mineral prices and development costs which will be subject to fluctuation due to global and local economic conditions.  This news release also contains forward-looking statements respecting the growing demand for battery grade cobalt chemicals, which demand may or may not continue to grow depending on consumer habits and technological developments.  Further information regarding risks and uncertainties which may cause results to differ from those contained in forward-looking statements are included in filings by the Company with securities regulatory authorities and are available at www.sedar.com.  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. 

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 Formation Metals Inc. 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.