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January 6, 2010

Formation Metals' Uranium Project 2009 Drilling Expands Centennial Deposit Mineralization

Vancouver, B.C. January 06, 2010 - Formation Metals Inc. (the “Company”, FCO-TSX,) is pleased to provide its shareholders with an update on its Virgin River Uranium Project, as provided to the Company by project operator, Cameco Corporation. Located within the south-central portion of the Athabasca Basin in northern Saskatchewan, the project is a joint venture formed in 1998 between Formation Metals’ wholly owned Canadian subsidiary, Coronation Mines Limited, Cameco Corporation and by AREVA Resources Canada Inc. Coronation Mines Limited owns 2% of the project with a right to increase its ownership of the project up to 10% under certain circumstances.

A total of 7,742.1 m were diamond drilled in 2009. The 2009 program was broken out into two phases, the winter drill program initiated in early 2009 and reported on in the Company’s News release dated September 25, 2009, and the summer drill program that extended into the fall.

The highlight of the 2009 winter diamond drilling program was the broad zone of mineralization intersected in DDH VR-031W3 which returned a 0.1% grade-cutoff result of 8.73% U3O8 over 33.9 m = 295.9 Grade Thickness (grade thickness = GT= metres multiplied by % U308). This value is the highest interval attained on the project to date.

The highlight of the summer diamond drilling program, tabulated below, was the continuation of the broad zone of mineralization intersected on L10+50N with follow-up wedge holes DDH VR-031W4 (7.08% U3O8 over 12.0 m = 85.0 GT) and DDH VR-031W5 (4.58% U3O8 over 14.4 m = 66.0 GT). Mineralization has now been traced over a minimum width of 52.5 m on L10+50N and remains open to the west. A significant intercept was also intersected on L10+00N with wedge hole DDH VR-038W2 which returned 3.96% U3O8 over 20.2 m = 80.0 GT.

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click to enlarge



The Centennial deposit has now been traced over a known 650 m of strike length and appears to remain open to both the north and the south. Diamond drilling suggest the deposit has a minimum across strike width ranging from 10.0 m to 52.5 m and is currently open to the east and west on most sections.

Drilling appears to have identified a west dipping structure controlling mineralization on the deposit and is thought to be important in tracing the high-grade portion of the mineralization along strike to the north and south.

A budget of $5 million has been approved for the 2010 exploration program. Over $21.6 million has been spent on the project to date exploring for a large unconformity-type deposit that has resulted in the discovery of the Centennial Deposit. The 2010 program will consist of diamond drilling, grid establishment and both Fixed-Loop and step-wise Moving-Loop TEM (Time—Domain Electromagnetic) geophysical surveying.

A winter campaign utilizing two drills will be initiated in early 2010 to test regional targets to the north of the Centennial deposit. A summer campaign utilizing both drills will also concentrate on extending the strike length of the Centennial deposit to both the north and south and continue testing the across-strike width and the potential for high-grade mineralization (ie. >100 GT) on select fences.

Project representatives are pleased with the success of the program and are looking forward to the results of the summer 2010 drill programs.

All uranium assays were carried out by the Saskatchewan Research Council (SRC) of Saskatoon, Saskatchewan. Delayed neutron counting (DNC) and / or X-ray fluorescence spectroscopy (XRF) U3O8 check assays were completed on all split assay samples returning greater than 1.0% U3O8. The average of the check assays and the ICP-OES results were used in the calculations of grade thicknesses.

Mr. Eric (Rick) Honsinger, P.Geo., of Formation Metals Inc., is the Qualified Person who has reviewed and approved the content of this news release based on an examination of the data submitted to the Company by the project operator Cameco Corporation. A location map of the project and drill hole location plan map will be made available on the Company’s website at http://www.formationmetals.com .

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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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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