Essential Power…Infinite Possibilities

June 29, 2009

Update on Formation Capital's Idaho Cobalt Project

NOTE: This update was sent to the Company’s list of shareholders and interested parties via email on June 29, 2009.

- This is Not an Official Company News Release —
- For the Information of Shareholders & Interested Parties Only -


Dear Shareholder / Interested Party,

In response to enquiries the regarding the status of mine financing and the project schedule for the 100% owned Idaho Cobalt Project (ICP) located near Salmon, Idaho, Management is providing this informal update as received by its wholly owned subsidiary, Formation Capital Corporation, U.S. (“the Company”)

The Company’s goal remains to commence mine construction in late summer or early fall of this year. Management cannot say with certainty when we will be able to “break ground” as this is dependent on the successful closing of a mine financing, the subsequent placement of an appropriate reclamation bond (the amount of which has yet to be determined) and the final approval of the Plan of Operations by the lead permitting agency, the United States Department of Agriculture Forest Service (the “Forest Service”). The Forest Service has advised the Company that although they have encountered internal logistic delays over the past several weeks, they have assured the Company that they are working diligently to finalize the bond amount and approve the Plan of Operations. The plan was submitted to the Forest Service on February 27, 2009 after the Record of Decision (the “ROD”) was issued in January of this year. The ROD was subsequently upheld on April 23, 2009. The Plan of Operations was again updated to conform with the approved ROD and we await the Forest Service’s final comments on the re-submitted Plan of Operations.

With an anticipated six day per week construction schedule, construction is expected to be complete in approximately one year from its commencement. The mine life is currently projected to last approximately ten years, but with the resources open along strike and at depth, there could be several additional years of operation.

Multiple development projects are expected to run concurrently as construction of the ICP moves forward. Improvements to access roads, site logging and earthwork will be a high priority and will be the first to commence. The currently proposed project construction and operations schedule is not definitive and is intended as a guideline that is subject to change. Pending Forest Service approval, the commencement of construction in early fall of 2009 through to year end is anticipated to be the busiest period. During this time construction will also include the development of the portal bench, tram, tailings and waste rock storage facility, site road upgrades and the commencement of underground mine development. These and other related projects are expected to conclude next year for a targeted commencement of operations in the third or fourth quarter of 2010. Once in operation, production will ramp up to 800 tpd over the course of the next several months and require 157 personnel during the operational phase.

The Company and the Contractors will be required to carpool or bus their employees to the mine site where practical. The Company’s previously purchased warehouse and staging area property located on the outskirts of town, will be used to gather smaller loads of freight into full truck loads to reduce traffic to the site.

There has been significant interest from potential financiers in the project. Management continues to advance mine finance discussions on numerous fronts including debt markets, off-take discussions, strategic partnerships, tax exempt bonds and other instruments, in an effort to ensure any financial instrument undertaking, or combination thereof, will be in the best interest of the shareholders and that it protects the Company’s assets. Management remains confident it will be able to conclude a financing under favorable terms, however, at this time, the current recessional financial market conditions preclude forecasting any definitive completion date for a successful mine financing.

Formation Capital Corporation
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The statements contained in this update in regard to Formation Capital Corporation that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Formation Capital Corporation’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 25th, 2009, Conceptual Studies Commence on Formation Capital's Virgin River Uranium Project
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September 15th, 2009, Permanent Access Across Blackbird Mine Site Authorized for Formation's Cobalt Project