Formation Metals Inc.

COMPANY DATA | INTRODUCTION |  PROJECT IN HAND | MANAGEMENT
NEWS UPDATE | CHINESE

COMPANY DATA

INTRODUCTION

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 through its wholly owned subsidiaries, has interests in base, precious metal and uranium projects in Canada, the United States and Mexico.

The Company's flagship property, the 100% owned Idaho Cobalt Project, is a primary cobalt mine located in Salmon, Idaho. The Big Creek Hydrometallurgical Complex which includes the Sunshine Precious Metals Refinery, also 100% owned and located in Idaho, will process the Idaho Cobalt Project concentrate into LME grade high purity cobalt metal suitable for next generation Lithium-Cobalt-Ion rechargeable batteries used in hybrid and electric vehicles and for critical applications in the super-alloy sector such as jet turbine blade production. Cobalt consumption grew at an estimated +8% annual growth rate over the last decade. 

PROJECT IN HAND

(1) Idaho Cobalt Project, Idaho, USA

The Company's 100%-owned Idaho Cobalt Project, located 26 miles west of Salmon in east central Idaho, is a unique, fully permitted primary cobalt deposit with future production estimates of over 1,500 tons (approximately 3.3 million pounds) of super-alloy grade high purity cobalt metal per year over a minimum ten year mine life. The project's output will be equivalent to 3.3% of the entire global cobalt supply and it will be able to feed 14.9% of North American demand for cobalt.

The US consumes approximately 60% of the world's high purity cobalt, yet does not have any current domestic source of cobalt.

The Idaho Cobalt Project has received a positive National Instrument 43-101 compliant Bankable Feasibility study, a final Environmental Impact Statement and positive Records of Decision from both the US Department of Agriculture National Forest Service and the U.S. Environmental Protection Agency. Phase I Construction was completed in 2010 and the completion of an $80 million financing has allowed the Company to plan for Phase II Construction, scheduled to commence before the end of Q2 2011. Initial cobalt production is targeted for Q2 2012.

Earnings Projections: Average net cash flow $34 million per year over a 10 year mine life utilizing $22.52/lb cobalt.

Strong political support includes members of the US Congress and US Senate. Idaho's Governor stated, "Clearly, your (Idaho Cobalt) project will better the lives of people in Idaho as well as across the country and the world". Public shows support at meetings held by the United States Forest Service on Idaho Cobalt Project's Draft Environmental Impact Statement.

Proven and Probable Reserves of the project currently stand at 2.636 million tons grading 0.559% cobalt, 0.596% copper and 0.014 ounces per ton gold utilizing a 0.2% cobalt cut-off for a ten year mine life. This represents contained metals in a Proven and Probable Reserve category of 29.5 million pounds of cobalt, 31.4 million pounds of copper and 37 thousand ounces of gold. In addition, there are Inferred Resources of 1.122 million tons grading 0.585% cobalt, 0.794% copper and 0.017 ounces per ton gold, representing contained metal of 13.1 million pounds of cobalt, 17.8 million pounds of copper and 19 thousand ounces of gold. 

The potential to dramatically increase reserves is considered excellent with a district potential of 50 million tons. The project contains over 20 distinct target zones and of those only four have been drilled to date. Of those four, only one deposit, the Ram deposit, is being used in the calculations of reserves and resources in the current mine plan. This deposit remains open at depth and along both strike directions.

(2) Big Creek Hydrometallurgical Complex / Sunshine Precious Metals Refinery, Idaho, USA

The unique 100%-owned Big Creek Hydrometallurgical Complex, which includes the Sunshine Precious Metals Refinery, is located 200 miles north of the Idaho Cobalt Mine, located in the world famous Silver Valley of Idaho. These processing facilities include hydrometallurgical leaching capabilities and separate silver and gold refining capabilities. Formation's wholly owned subsidiary Essential Metals Corporation obtained the facility due to its ideal location and for its hydrometallurgical equipment that can be modified to handle cobalt concentrate production from Formation's 100% owned Idaho Cobalt Project. The cobalt concentrate will utilize the leaching process established at the plant, leaving the precious metals refining section open for producing high purity silver bullion and gold. Essential Metals Corporation opened the doors of the Sunshine Precious Metals Refinery in June of 2004 for custom refining services and is currently processing client materials.

The operating Sunshine Precious Metals Refinery is a zero discharge, expansion capable facility that continues to attract customers, escalate production and increase revenues. 

MANAGEMENT

Officers and Directors

Mari-Ann Green, B.A., B.Ed., Chairman & CEO, Director
Ms. Green, co-founder of Formation, has over 25 years experience in the resource sector in the areas of finance, management and corporate development. She has been directly responsible for the raising of over $170 million in equity funding for the Company and has assembled and directed a team of exceptional industry professionals. 

J. Scott Bending, P.Geo., B.Sc., President, Director
Mr. Bending, also a co-founder, has over 23 years experience in mineral exploration and development within Canada, Mexico, United States and abroad and has 15 years experience in metal price forecasting and commodity analysis. Mr. Bending provides Formation with solid management expertise and has a proven track record of acquiring and evaluating high quality metal projects.

W. G. (Bill) Scales, B.Sc., Executive Vice President, Director
Mr. Scales, also a co-founder, has over 30 years experience in project management including 20 years in mineral exploration and development. His extensive knowledge of the Idaho Cobalt deposit gives him a solid background from which to oversee and review property development as Project Manager.

David Stone, Ph.D., MBA, P.Eng., Director
Dr. Stone is a an internationally recognized expert in mine backfilling with over 20 years of experience in underground and surface mining in some 40 projects in 17 countries. He has participated in due diligence teams as well as leading mining scoping and mining feasibility studies for open pit and underground projects worldwide.

Cecil D. Andrus, Director
Previous four-term Idaho governor and former U.S. Secretary of the Interior, Mr. Andrus is known for his strong environmental stance on mining and believes the Idaho Cobalt Project to be an environmentally conscious mining operation.

Robert Metka, B.Sc., Eng., MBA, Director
Mr. Metka has over 23 years of mineral production and engineering experience as V.P. of Projects for Noranda Minerals and V.P. and General Manager for CEZinc. He is presently a Principal of Hatch, the world's largest international hydrometallurgical company.

James B. Engdahl, Director
Mr. Engdahl has over 30 years experience in corporate finance, management, accounting and administration with major financial institutions such as Barclays Bank of Canada and the Bank of Montreal.

Dr. Charles H. Entrekin, Ph.D., MBA, M.S., B.S., Director
Dr. Entrekin currently acts as an international consultant for metal producers and financial houses. He is on the Board of Coalcorp Mining Inc. and has served in numerous executive positions.

Robert J. Quinn, B.S., B.A., J.D., Director
As past Chief Legal Officer for Battle Mountain Gold Company, Mr. Quinn offers experience that focuses on due diligence, negotiating, structuring and documenting acquisitions and joint ventures and the financing, permitting and development of major mining projects.

J. Paul Farquharson, B.B.A., C.S.C., Chief Financial Officer
Mr. Farquharson has over 25 years experience in financial management and regulatory compliance with private and public resource companies across Canada. Over the last 15 years he has been responsible for financial and compliance matters for Formation and has assisted with the raising of venture capital and the corporate development of Formation.

Jeffrey T.K. Fraser, B.Comm., LLB, Corporate Secretary
Mr. Fraser has practiced corporate, securities and mineral natural resources law for over 20 years. He has, through Jeffrey T.K. Fraser Law Corporation, been legal counsel to Formation since 1997, providing legal services relative to financings, corporate law and governance, and securities regulatory compliance.

E.R. (Rick) Honsinger, B.Sc., P.Geo., V.P. Corporate Communications
Mr. Honsinger's geological and technical background brings over 20 years of project management, exploration and I.T. related experience to the Company. He is directly responsible for Corporate Communications and related compliance and has managed and contributed to the success of numerous field and special projects during his past 15 years with Formation.

Alan D. Vichert, B.A., B.Sc. (Geol), MBA, Vice President, Risk Management
Mr. Vichert has many years of geological and business experience in the Middle East, the Caribbean, the USA and Canada. Before joining Formation Metals, Mr. Vichert spent a decade with the International Financial Centre Vancouver promoting world wide business in Vancouver. He assists Formation in matters of business development and oversees risk management for Formation Metals Inc.


NEWS UPDATE

On April 4, 2012, Formation Metals Inc. announced that final results from the 2011 drill program on the Virgin River uranium project have been received, confirming additional high-grade uranium intersections in diamond drill core from the Centennial deposit. Formation Metals drills 44.6 m of 0.33% U3O8 at Virgin.

On December 21, 2011, Formation Metals Inc. announced that it has completed its geotechnical core drilling at its Idaho cobalt project. The geotechnical drilling was conducted to acquire data for rock stability studies around the portal bench area.

On December 6, 2011, Formation Metals Inc. provided an update on the progress of construction on its Idaho cobalt project. Considerable construction progress has been made at the mine site and at the cobalt production facility. Geotechnical drilling has commenced to assist in the further evaluation of engineering parameters for surface and underground work at the mine.

On June 16, 2011, Formation Metals Inc. announced that its earthworks contractor Dahle Construction LLC is currently in the process of mobilizing heavy equipment to commence construction on the Idaho cobalt project.

On May 30, 2011, Formation Metals Inc. provided its shareholders with final results from the Virgin River uranium project 2010 drill program, located in Saskatchewan. A total of 8,562.6 metres were drilled in 2010. Drill hole VR-040W2 returns 9 metres of 8.40% U3O8, and drill hole VR-029W2 returns 13.2 m of 7.46% U3O8. Continued drilling on the Virgin River project for 2011, expected to commence in early June.

Formation Capital Corp. is a well established mineral exploration, development and refining company. Formation Capital, through its wholly owned subsidiaries, has interests in base, precious metal and uranium projects in Canada, the United States and Mexico.

The Company's primary assets include the Idaho Cobalt Project and the Big Creek Hydrometallurgical Complex that includes the Sunshine Precious Metals Refinery.

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