Essential Power…Infinite Possibilities

December 21, 2006

Formation Capital's Final Feasibility on Cobalt Project Nearing Completion

Vancouver, B.C., December 21, 2006, Formation Capital Corporation, (Formation, FCO-TSX), is pleased to provide its shareholders and interested parties an update on the progress of its final feasibility study on its 100% owned Idaho Cobalt Project.

In early December, 2006, Formation met with its feasibility study consultants in the Samuel Engineering, Inc. offices located in Denver, Colorado. The purpose of the meeting was to review the recently completed hydrometallurgical test work and process design of the hydrometallurgical facility located in northern Idaho, slated to process the Idaho Cobalt Project concentrate upon commencement of production. Final review of the feasibility study consultants’ design packages for mine design, geotechnical design, mine backfill system, and waste water treatment was conducted as well as review of Samuel Engineering’s progress to date on the concentrator and ancillary services design.

Samuel Engineering’s review of previous specialty consultants’ work packages for environmental, geotechnical, mine design, mine backfill, waste water treatment, and tailings and waste storage found them to be progressing in a direction suitable for incorporation in the overall Feasibility Study without the need to commission additional studies. A value engineering analysis of the site and concentrator design and layout has resulted in a reduction of the overall footprint and reduction in the number of buildings required. The result is a more compact and cost efficient arrangement.

Review of the recently revised mine production plan and the potential for extended production from high grade zones (open to the north, south and at depth) has resulted in the scale-up of refinery design production rates to 3.4 million pounds of cobalt and 5.0 million pounds of copper per annum.

In addition, review of recently completed hydrometallurgical test work conducted at Mintek in South Africa under the direction of Grenvil Dunn of Hydromet (Pty), Ltd. and Formation with input from Samuel Engineering’s process engineers, has resulted in a simplified process scheme for the refinery that is more efficient, easier to operate and less costly. Preparation of the detailed project schedule is currently underway. The Company expects the final feasibility study to be completed by the end of the first quarter of 2007.

The Idaho Cobalt Project is a unique high-grade, primary cobalt deposit that is metallurgically favorable for the production of high purity cobalt metal. The U.S.A. is one of the largest world consumers of this environmental and strategic metal but currently has no primary cobalt production and is dependent on imported sources.

Formation Capital Corporation 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 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, B.C. V6C 2W2
Investor Relations: Contact Encompass Communications toll free 877-566-6592
Email: info@formcap.com - Or visit our Web site at: www.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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December 20th, 2006, Formation Closes Financing for Saskatchewan Uranium Projects
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