Essential Power…Infinite Possibilities

March 22, 2012

Formation Metals' Cobalt Project Finance Update

Vancouver, B.C., March 22, 2012 Formation Metals Inc. (FCO-TSX) (“Formation or “the Company”) announced today that it is repaying US$34.1 million of US$77.7 million in tax exempt Recovery Zone Facility Bonds (the “Bonds”) to the bond purchaser from the cash held in trust (see news release dated November 22, 2011). The Bank of Montreal Letter of Credit (“L/C”) supporting the remaining US$43.6 million of the Bonds will remain in place. Proceeds from the remaining bonds make up a part of the funds to be used to construct the Company’s 100% owned Idaho Cobalt Project (“ICP”).

The Company made this decision based on feedback from the banks and capital markets. While the Bonds add value to the Company with respect to long term financing costs, they limit the Company’s flexibility with respect to the capital structure of project finance under current market conditions.

In the process of arranging project financing, Formation has discovered that some potential lenders prefer funded debt to L/C obligations. Furthermore, some capital providers may not fit within the L/C structure. By repaying the US$34.1 million of Bonds, the Company has expanded the scope of potential participants and funding sources in the ICP project financing by reducing the amount of funding that has to fit within the Bond L/C structure.

Ms. Green stated that “This additional flexibility optimises current project financing and increases options to refinance the project in the future, together with preserving a low-interest long-term debt component for the development of the ICP”.

In the longer term, the Company remains eligible to apply to the State of Idaho for volume cap allocation required in connection with Solid Waste Private Activity Bonds (“SWB”) first disclosed in the Company’s news releases dated September 16 and December 16, 2010. The SWBs do not have an expiration date and have a look back provision of 18 months from project start-up. The SWBs have, for the most part, the same terms as the Recovery Zone Facility Bonds.

About Formation Metals, Inc.
Formation is a well-established mineral exploration, development and refining company who, through its 100% owned subsidiary, Formation Capital Corporation, U.S., is developing the ICP. The ICP is a 100% owned primary cobalt deposit located in Idaho. Through its wholly owned subsidiaries, Formation has additional interests in base, precious metal and uranium projects in Canada, the United States and Mexico. Formation 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.

About the Idaho Cobalt Project
The 100% owned ICP is a unique, fully environmentally permitted primary cobalt deposit and refining facility currently under construction. The ICP will be capable of producing high purity cobalt metal suitable for critical applications in the superalloy sector, as well as by-product copper and gold. Cobalt is used in a wide variety of environmental and high-tech applications, including re-chargeable batteries and superalloys required in the aerospace sectors. Currently, the United States is the world’s second largest consumer of cobalt and is totally reliant on foreign sources for this essential metal.

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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February 29th, 2012, Formation Metals Commences Trading on the OTCQX Market
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March 29th, 2012, Formation Metals' Idaho Cobalt Project Construction Update