Essential Power…Infinite Possibilities

October 21, 2010

Formation Drills Cobalt Project to Optimize Mine Design

Vancouver, B.C., October 21, 2010 Formation Metals Inc. (FCO-TSX) (“Formation”)Z is pleased to announce that its 100% owned subsidiary, Formation Capital Corporation, U.S., (the “Company”) has reported the successful conclusion of its diamond drill program with favourable initial assay results from its 100% owned Idaho Cobalt Project, located in Lemhi County, Idaho.

The diamond drill program was conducted in a previously untested area on the project along the southern extension of the Ram deposit. A total of 5,727.5 feet were drilled in six drill holes between Sections 12+00 South and 16+00 South. The results from DDH-R10-01, tabulated below, demonstrates the continuity of economic cobalt mineralization 200 feet down dip and 100 feet along strike from previous drilling at the southern extension of the Ram deposit. Core logging results from the remaining five drill holes indicates favourable cobalt mineralization was intersected for an additional 400 feet along strike to the south. This drilling has extended the previously defined strike length of the Ram deposit an additional 14% from 2,800 to 3,200 feet.

In addition, the drill program has provided material for initial metallurgical test work to determine the economic viability of extracting the Rare Earth Elements (“REE’s”) that are known to occur on the property. Values of total rare earth oxides from previous Formation core drilling on the property are reported as high as 1.92%, (noting that the average value reported is 0.10%) while values for light rare earth oxides and heavy rare earth oxides have been reported up to 1.63% and 0.52% respectively. Once all final data is returned from the laboratory, more REE values will be compiled and reported by the Company.

Initial indications suggest the REE’s are closely associated with the cobalt mineralized horizons, and as such, provisions for these horizons to be mined, milled and concentrated are already included in the existing approved mine plan. Thus, any potential future REE production would be considered by-product production.

Table 1: Ram 2010 drill results to date:

click to enlarge


As expected, this verification drilling program is providing information needed to optimize mine design and production plans with the primary goal of maximizing ore production as early in mine life as possible. Results from the program are expected to have a positive impact on the overall economics of the project.

Mr. George King, B.Sc., P.Geo., is the Qualified Person working directly on the project and has reviewed the contents of this release. Cut drill core samples were sent to ALS Chemex Labs Ltd in North Vancouver, B.C. for assaying. The Company will announce further results of the program when available.

The 100% owned Idaho Cobalt Project is a unique, fully environmentally 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 aerospace 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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September 27th, 2010, Formation Metals Engages Auramet for Cobalt Mine Finance
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November 5th, 2010, Continued Positive Results from Formation Metals' Cobalt Mine Optimization Drilling