Essential Power…Infinite Possibilities

July 26, 2011

Formation Metals Begins Earthworks Construction at Idaho Cobalt Project Mine Site

Vancouver, B.C., July 26, 2011 Formation Metals Inc. (FCO-TSX) (“Formation”) announced today that its 100% owned subsidiary, Formation Capital Corporation, U.S., (the “Company”) has been informed that mine site earthworks construction has commenced on its 100% owned Idaho Cobalt Project (“ICP”).

Portal bench mine site earthworks have commenced. The mine site access road upgrade segment of Stage II Construction is essentially complete with over 8.7 miles (14 km) of improvements now in place. The current stage of portal bench and portal access construction will be joined by concurrent mill and concentrator site earthworks. The mine site earthworks bidding analysis completed with the contract awarded to Dahle Construction LLC of Salmon, Idaho, who has mobilized earth moving heavy equipment and established a crushing facility nearby to provide raw materials for construction.

“We knew it was only a matter of time, but it is still very gratifying to see heavy equipment turning dirt at the mine site”, commented Mari-Ann Green, CEO of Formation Metals Inc. “Getting a start on the portal bench now will help keep us on that critical path to production for Q2 of next year”.

JDS Energy & Mining Inc. (“JDS”), the Company’s Project and Construction Manager, is continuing its review of the earthworks quantities of materials required to reduce time schedules and cost. Powerline construction bids have been received and are under review while the tram engineering re-alignment is now complete and is ready for survey and final confirmation. In conjunction with the increased traffic and earthworks equipment arriving at the mine site, the Company has implemented a security check point at the entrance to the mine site access gate.

At the cobalt production facility outside of Kellogg Idaho, where ICP concentrate is to be processed into high purity end product cobalt copper and gold, progress over the past several months concentrated on process design, building design, and commencement of equipment specification preparation and bidding activities. The mass balance engineering is now sufficiently advanced to allow for equipment specification, sizing and development to proceed. According to current JDS progress reports, it is anticipated that the process design will be essentially complete before the end of July, 2011.

With the process flowsheet established, the cobalt production facility building size was finalized and preliminary concrete foundation drawings have been prepared. The request for proposal package for the design, supply and installation of the cobalt beneficiation plant was sent to several vendors with a bid closing date scheduled for the end of July, 2011. It is anticipated that ground breaking at the refinery could commence in the second half of August, 2011, with building assembly starting later in September.

In addition, the Company’s mandated lead arranger for the credit facility has concluded the technical and legal portions of the due diligence process with no fatal flaws reported. This represents a significant advancement in securing the credit facility required to support the recovery zone facility bonds held in trust for the Company (see December 31, 2010 news release).

Formation Metals Inc. is a well established, mineral exploration, development and refining company that 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

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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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June 16th, 2011, Formation Metals' Earthworks Contractor Mobilizing Equipment for Idaho Cobalt Mine Construction
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July 29th, 2011, Formation Metals Receives Commitment for Financing of Idaho Cobalt Project