Formation Metals' Earthworks Contractor Mobilizing Equipment for Idaho Cobalt Mine Construction
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 06/16/11 -- Formation Metals Inc. (TSX: FCO) ('Formation') announced today that its 100% owned subsidiary, Formation Capital Corporation, U.S., (the 'Company') has provided Formation with an update on its 100% owned Idaho Cobalt Project ('ICP'). Pursuant to Formation's news release dated May 12, 2011, in a bid process, Dahle Construction LLC (Dahle') of Salmon, ID has been awarded the contract to commence transportation route earthworks construction on the ICP. Dahle is currently in the process of mobilizing heavy equipment to commence construction on the Idaho Cobalt Project, which includes the establishment of a crusher facility to produce aggregate required for road upgrades.
'We've gotten a bit of a late start due to excessive snow conditions at the higher elevations of the project area this year,' commented Mari-Ann Green, CEO of Formation Metals Inc. She continued, 'There is still some snow remaining at the higher elevations above the 7,000 foot level, but we don't expect that to linger for much longer. In the mean time, Dahle has begun the process of mobilizing equipment and widening the access roads in preparation for the commencement of earthworks at the mine site.'
In addition to site works contractor mobilization, the Company's Project and Construction Managers, JDS Energy & Mining Inc. ('JDS'), has reported continued progress on engineering, procurement and construction at the ICP's mine site and cobalt production facility. Progress included the finalization of various engineering contracts and the receipt of additional site earthwork, tailings & waste rock storage facility and concentrator site package bids with bid walks with contractors scheduled for later this week. In addition, the Power Transmission Line Installation bid package has been released to contractors with a bid walk scheduled for later this month.
As a result of advancements in engineering, procurement and construction on the ICP, JDS, in conjunction with the Company's in-house operations team, has updated and revised the estimated capitalization expenditures for the ICP from (i)US$138.7 million to US$141.9 million. The new figure takes into account post reclamation financial assurance bonding requirements for both surface disturbance reclamation and long-term water treatment as well as previous equipment purchases. The revised estimate has not materially changed capital costs but has made the operation more streamlined. The Mine Plan has been re-engineered and optimized to maximize the extraction of the highest grade ore material in the shortest possible time frame in order to provide an optimized cash flow scenario in the early years of mine life. This has resulted in a re-positioning of the portal bench and other engineering modifications associated with this re-positioning.
(i) Note: The original estimate of US$138.7 million, which did not include enough provisions for post reclamation bonding for both surface disturbance and long-term water treatment, was derived from the Company's National Instrument 43-101 Compliant Technical Report, which was completed September 14, 2007, revised May 19, 2008, amended and restated June 23, 2008 and SEDAR filed on July 15, 2008. The updated figure of US$141.9 million is based on an optimization of the original Mine Plan of Operation conducted by the Company's in-house operations team and JDS engineers, and is not National Instrument 43-101 compliant.
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.
Mari-Ann Green, C.E.O.
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 www.sedar.com.
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.
Contacts:
Formation Metals Inc.
E.R. (Rick) Honsinger, P.Geo.
V.P. Corporate Communications
604-682-6229
inform@formationmetals.com
www.formationmetals.com