Essential Power…Infinite Possibilities

February 27, 2006

Company Receives Draft EIS and Proposes Environmental Enhancements on Cobalt Project

Vancouver, B.C., February 27, 2006 Formation Capital Corporation (FCO-TSX) (the Company) announced today that early in the year its wholly owned subsidiary Formation Capital Corporation U.S. received from the United States Department of Agriculture, Salmon-Challis National Forest (FS) the Preliminary Draft Environmental Impact Statement (EIS). This is not a public document and is preliminary in nature, yet it is a long awaited comprehensive report. It discusses the impacts the Company’s 100% owned Idaho Cobalt Project Mine Plan of Operation (the Mine Plan) will have on the environment. The FS has solicited comments on the Preliminary Draft EIS from the cooperating agencies and, where appropriate, will include suggested revisions in the Draft EIS. The Draft EIS, on the other hand, is a public document and is expected to be available for public comment during the second quarter of 2006.

Once all public comments are reviewed, the FS completes the Final EIS and issues a Record of Decision. The decision will approve the project as proposed or notify the Company of changes or additions to the Mine Plan and outline any necessary operational permits that would be required.

The Mine Plan for the Idaho Cobalt Project (ICP) has seen many revisions since it was first submitted and accepted as complete by the FS in 2001. On review of the Preliminary Draft EIS and in an effort to further reduce the already small environmental impacts of the ICP, the Company has proposed certain additional enhancements to the Mine Plan: (1) an improved Water Monitoring Plan, (2) a modified Paste Backfill, (3) a Nitrate Treatment Contingency and, (4) an improved Contingent Ground Water Capture.

Improved Water Monitoring Plan provides for more intensive monitoring once operations begin, allowing for early detection and response to unlikely issues that could unexpectedly arise. It also provides for construction of a cable car crossing over Panther Creek that will allow safe access to Big Flat Creek in all weather, improving the level of monitoring.

Modified Paste Backfill is an improvement to the Ram backfill plan that will use fully cemented tailings paste backfill, rather than the partially cemented dry tailings backfill system previously proposed. The advantages of fully cemented paste backfill are that the cement introduces neutralizing capacity to the backfill, raising pH and reducing dissolved metals in ground waters.

Nitrate Treatment Contingency will treat mine waters for nitrate reduction before release to the environment through the land application area. The proposed nitrate treatment system would be a simple biological denitrification system that would be implemented in the unlikely event that monitoring indicates nitrates may become a water quality concern.

Improved Contingent Ground Water Capture would be moved slightly down gradient, to a location where it would be even more efficient and complete capture of any contaminants could be assured. Thus, even though the system is a contingency plan only, we are proposing to improve its environmental protection.

The implementation of the above enhancement measures is expected to have a minimal effect on the economic parameters of the proposed mine.

In conjunction with improvements to the Mine Plan the Company is continuing its efforts to acquire any permits that may be necessary for the operation of the mine. Permits are issued from different state and federal agencies, negotiated on an individual basis and include, for example, such things as an air quality permit, a water right, and a national pollutant discharge elimination system permit. In some cases these permits can be challenged by the public which could involve a hearing or other such proceeding. The Company is aware of one such challenge to its application for a water right, however we are confident that the matter will be resolved in due course.

Formation notes that, although exceptionally tedious, the permitting process on its ICP is progressing and the Company is confident that a Record of Decision will be issued later in the year. The Company has been and will continue to make every effort to provide any information or assistance that the FS or other regulatory agencies require in order to expedite the process.

The Company is committed to a science backed mining operation for the Idaho Cobalt Project and is dedicated to the principles of environmentally sound mining and refining practices. Formation Capital Corporation believes that environmental stewardship and mining can co-exist. The Company trades on the Toronto Stock Exchange under the symbol FCO.

Formation Capital Corporation
“Mari-Ann Green”
Mari-Ann Green
C.E.O.

For further information please contact:
Formation Capital Corporation
1510 — 999 West Hastings Street, Vancouver, BC, V6C 2W2
Head Office: 604-682-6229
Email: inform@formcap.com - Or visit our Web site at: formcap.com


The statements contained in this news release in regard to Formation Capital Corporation that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Formation Capital Corporation’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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