Formation Metals Inc. completes $80 million equity financing

Formation Metals Inc. (TSX:FCO) (the “Company”) is pleased to announce it has completed the equity financing (the “Financing”) announced on January 27, 2011 in the full amount for gross proceeds of $80,000,000. The Financing was sold in all of the provinces of Canada, except Québec, and certain offshore jurisdictions and consists of Units priced at $1.50 per Unit. Each Unit is comprised of one common share in the capital of the Company (a “Common Share”) and one half of one Common Share purchase warrant. Each whole Common Share purchase warrant (a “Warrant”) will entitle the holder to purchase one Common Share for 36 months at a price of $2.00. The Company’s Common Shares currently trade on the Toronto Stock Exchange under the symbol “FCO” and the Warrants have been approved for listing on the Toronto Stock Exchange under the symbol “FCO.WT”.

The Company plans to use the proceeds of the Financing to fund the continuation of engineering, procurement and construction at the Idaho Cobalt Project, for reclamation bonding requirements and for general corporate purposes. “We are pleased this financing is in place,” stated Mari-Ann Green, CEO of Formation Metals Inc. “For the past several years we have worked hard building infrastructure, obtaining all the necessary environmental permits and procuring long lead time mining equipment. We are now in a position to advance the project towards production.”

The Financing was conducted on a best efforts agency basis by a syndicate co-led by Byron Securities Limited and Cormark Securities Inc. and including Jennings Capital Inc. (collectively, the “Agents”). The Agents have been granted an option, exercisable at any time for a period of 30 days, to purchase additional Units equal to 15% of the number of Units sold pursuant to the Offering at the issue price of the Units, to cover over-allotments, if any and for market stabilization purposes.
In consideration for the services to be rendered by the Agents under the Offering, the Agents have received a cash commission of 6% of the gross proceeds of the Offering. The Agents have also received broker warrants to purchase an aggregate number of Common Shares equal to 6% of the number of Units issued under the Offering, at a purchase price of $1.50 for a period of 24 months.

The Company also announces that it has agreed to repay the balance owing on the $8,000,000 unsecured convertible debenture (the “Debenture”) issued to Coalcorp Mining Inc. (“Coalcorp”) on May 7, 2010. The Debenture will be repaid through a mutually agreed to cash and share settlement.

Formation Metals Inc. is dedicated to the principles of environmentally sound mining and refining practices, and believes that environmental stewardship and mining can co-exist.

Formation Metals Inc.

Mari-Ann Green, CEO
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 securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or the securities laws of any state of the United States, and may not be offered or sold, directly or indirectly, in the United States unless registered under the U.S. Securities Act and applicable securities laws of any state of the United States or in reliance on an exemption from such registration requirements. This news release does not constitute an offer to sell, a solicitation of an offer to buy any of the Company’s securities set out herein in the United States.

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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