May 12, 2011
Formation Metals Idaho Cobalt Mine Construction On Track for Q2, 2011
Vancouver, B.C., May 12, 2011 Formation Metals Inc. (FCO-TSX) (“Formation”)
today that its 100% owned subsidiary, Formation Capital Corporation,
U.S., (the “Company”) has provided Formation with an update on its 100%
owned Idaho Cobalt Project (“ICP”). Pursuant to Formation’s news
release dated April 6, 2011, the Company’s Project and Construction
Managers JDS Energy & Mining Inc. (“JDS”)
, have now been
fully integrated into the Company’s management, in-house and out-sourced
engineering, technical and administrative teams at both the ICP’s mine
site in Salmon, Idaho, and Cobalt Production Facility (“CPF”) in
Kellogg, Idaho. The pre-construction activities on the ICP are
continuing with site earth works scheduled to begin in late May, 2011.
In preparation for the commencement of site earth works, JDS has
concentrated its efforts over the last several weeks on finalizing
budgets, engineering and procurement tasks involving several areas at
the mine, concentrator and cobalt production facilities. These tasks
are broken down and summarized as follows:
Detailed engineering is underway with a number of sub-contracted firms
involved in design finalization of the portal bench pad, paste backfill,
tailings waste storage facility (“TWSF”), concentrator site, buildings,
equipment and tram foundations, powerline layout and site roads.
• Transportation & Roads:
The transportation road improvements Scope of Work was completed by the
Company utilizing design specifications from contract engineers and the
lead permitting agency, and has been sent out to contractors for bid.
• Site Work:
The site roads engineering package was completed at the end of April.
Geo-technical drilling and test pit excavations were completed around
the proposed portal bench area for geo-technical evaluation. Final TWSF
design is progressing well and the application for the dam was
completed and submitted to Idaho State government agencies.
Engineers coordinated the design effort of the tram re-alignment to
accommodate the optimized portal pad location. As a result, the
concentrator site area layout was also modified to accommodate updated
engineering plans for the tram.
Plant civil and structural engineering progress included the
finalization of ball mill design and crusher foundation design. This
included paste backfill design coordination and review of the current
electrical instrumentation and load study for the plant and underground
as well as a review of electrical bid packages.
• Paste Backfill Design
Engineers have completed the design criteria including a hydraulic
analysis of the paste backfill system, pumps and piping. Equipment
specifications for the pump, mixer, and cement silo have been reviewed
and approved and engineers are finalizing bid documents for cement and
• Cobalt Production Facility (Kellogg, Idaho)
Engineering emphasis continued on flowsheet development and refinements
to the heat and water balances. Specifications for the CPF have begun
as well as initial equipment sizing and layout design. The planned CPF
building and the existing refinery collectively comprise the Big Creek
A number of Purchase Orders (“PO”) were executed over the past several weeks with numerous bid quotations having been received.
• Site Works:
The contract PO’s for geo-technical drilling and snow removal were
executed and the work is now complete. In addition, numerous quotations
for construction equipment were received.
All electrical equipment has been quoted and purchase orders will be
finalized once underground electrical mine loads have been confirmed.
PO’s for the pumps, crusher and thickener have been awarded. Additional
PO’s expected to be awarded include those for dust collector equipment,
conveyors and electrical equipment.
The Company and JDS conducted pre-bid qualification meetings that were
held with approximately 20 separate contractors over the course of
several days. Each contractor made a presentation outlining their
safety program, skills and availability to commence work on schedule.
The results of these evaluations are currently under review.
Over the course of the next several weeks, it’s expected that several
additional sub-contracts will be awarded. These include the portal
bench construction and concentrator site earth work and underground
The above engineering, procurement and construction efforts also
included project engineers working closely with the engineering due
diligence team of the Company’s mandated lead arranger for a senior
secured debt facility. The mandated lead arranger (see November 30, 2010
Company news release) is expected, in due course, to provide a form of
credit facility supporting the tax exempt recovery zone facility bonds
held in trust for the Company (see December 31, 2010 news release). The
due diligence process is expected to conclude over the course of the
next several weeks.
“We are very pleased with the development of the project to date and are
eager to commence earth works on the ICP”, commented Mari-Ann Green,
CEO of Formation Metals Inc. She continued, “The $80 million raised in
March of this year has put construction plans into high gear and we
expect to make very good progress over the spring and summer”.
FORMATION METALS INC.
About the Idaho Cobalt Project
The 100% owned Idaho Cobalt Project is a unique, fully 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
About Formation Metals Inc.
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.
About JDS Energy & Mining Inc.
JDS has extensive experience with successful large-scale resource
developments in Canada, including a diamond mine in the Arctic, major
oil sands projects in Alberta and a copper mine in Yukon, among many
other projects throughout the world. Their team consists of about 25
full-time specialists and four industry associates who work together on a
project-specific basis. They extract maximum value from their projects
while balancing guiding management principles.
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: email@example.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
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