March 29, 2012
Formation Metals' Idaho Cobalt Project Construction Update
Vancouver, B.C., March 29, 2012 Formation Metals Inc. (FCO-TSX)
(the “Company”) is providing an update on the progress of construction
on its 100% owned Idaho Cobalt Project (“ICP”), which is managed by JDS
Energy & Mining (“JDS”). The ICP is comprised of the development of
a mine and construction of a concentrator at a primary cobalt deposit
in Lemhi County near the town of Salmon, Idaho, and the construction of
an electrowinning cobalt production facility in Shoshone County, near
Kellogg, Idaho, U.S.A.
The updates are based on progress reports submitted to the Company by
JDS since January, 2012, and are broken out into two separate sections;
one highlighting construction progress at the Mine & Concentrator
Site, and the other on construction progress at the Cobalt Production
Mine & Concentrator Site Construction Progress Executive Summary
Significant progress was made since the beginning of the year on
concluding engineering studies and releasing Issued for Construction
(“IFC”) drawings and specifications. Detailed engineering at the mine
and concentrator site is now 95% complete. In January, JDS conducted a
year-end executive review and a strategy for success meeting was held
later that month. Procurement activities included the release of the
contract for rock bolting and the creation of additional trade contract
Request for Proposal (“RFP”) packages. Working with the agencies to
receive approval on design packages in order to resume construction
activities was, and continues to be, a primary focus of the team moving
forward. Construction activities during February included safety
improvements that included brush and timber clearing for vision
enhancements along the transportation route.
Specific activities relating to the mine and concentrator site included:
• Samuel Engineering, Inc. (“SE”) completed final interdisciplinary
checks and released all IFC drawings and specifications in the steel,
piping, and electrical disciplines.
• Langston & Associates released IFC drawings and specifications for
the portal bench high-wall stabilization (rock bolting) activities.
The contract terms and conditions have been finalized and the contract
was executed in February.
• JDS and the Company compiled and released information to Micon
Engineering to support due diligence activities by various mine finance
• SE released all IFC drawings and specifications for items within the crusher and concentrator buildings.
• Mine Development Associates completed the underground mine block model for review.
• Two RFP packages were released for bid (building erection and tram
foundation design-build) and additional RFP packages are expected to be
issued in March.
Cobalt Production Facility Construction Progress Executive Summary
Significant progress on beneficiation engineering analysis was
completed. These studies have shown that the installation of a new
autoclave in the Cobalt Production Facility in lieu of modifying the
existing autoclaves will benefit project economics by allowing the
existing autoclaves to be utilized for other precious and base metals’
leaching by the Company’s 100% owned Sunshine Precious Metals Refinery.
SE completed a review of the autoclave design and specifications and is
Process Operating Procedures have been finalized. These engineering
specifications were locked and flow sheets were finalized and provided
to Micon Engineering to support mine finance due diligence activities.
Meetings were held at the end of February between JDS, SE and the
Company which provided SE with direction to prioritize purchasing and
vendor data acquisition to best suit construction sequencing. SE was
also provided a directive to begin detailed engineering of the
Specific activities relating to the Cobalt Production Facility included:
• The cobalt resolution process operating plan was signed off, resulting
in five of the six operating plans being completed. The concentrate
leaching plan was updated to reflect the new autoclave.
• Mechanical equipment package purchase orders were issued and quotations were received for five equipment packages.
• Refurbishment work of existing copper SX-EW circuits and other equipment continued.
• Cobalt electro winning cells for the Cobalt Production Facility
arrived at the port of Seattle and will be delivered to site after
• Existing autoclave re-certification process nearing completion.
Additional progress at the Cobalt Production facility included the
re-location of gas lines, pad preparation for additional concrete
pouring, running of power line, phones and Internet to various new
construction offices, installation of the parking lot, the refurbishment
of the ball mill including motor rebuild, the installation and repair
of new and existing gates, fences, ditches and sumps, the relining of
the copper electrolyte circulating tanks and electrowinning cells and
the development of an improved cobalt cathode handling and treatment
The Company continues to work with Union Bank as its Mandated Lead
Arranger to secure a credit facility (in the form of a letter of credit
and debt) for the ICP, while JDS continues to provide up-to-date,
optimized engineering plans to assist the lenders in their due
diligence. Additional updates will be made available as construction
progresses on the ICP.
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.
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
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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