Formation Metals' Bond Issuers Extend Date for Idaho Cobalt Project Credit Facility
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 10/06/11 -- Formation Metals Inc. (TSX: FCO) ('Formation') announced today that the date to provide letters of credit (the 'Facility') to back the US$77.7 million raised in Federal Stimulus Program Recovery Zone Facility Bonds (the 'Bonds') has been extended from October 6, 2011 to November 21, 2011 (see news release dated December 30, 2010). Proceeds raised from the issue of the Bonds are to be used exclusively for the development of Formation's 100% owned Idaho Cobalt Project ('ICP').
The Boards of Directors of the Bonds' issuers, The Industrial Development Corporation of Lemhi County, and The Industrial Development Corporation of Shoshone County, Idaho, both met in special sessions on Tuesday to approve the extension. The original indentures are amended effective October 5, 2011 to provide that the Facility must have an effective date not later than November 21, 2011. The investment banking firm Thornton Farish Inc. is acting as the remarketing agent for the Bonds.
Per the Company's news release dated July 29, 2011, the Facility being arranged by BNP Paribas contemplates two letters of credit totaling US$79.5 million that will support the payment of principal and interest accruing on the Bonds: (1) a Project Financing Letter of Credit, which is currently being syndicated by BNP Paribas on a best effort basis, consisting of US$58.5 million in support of the Lemhi County bonds for the construction and development of the ICP mine and mill facility and (2) a $21.0 million Financial Letter of Credit, in support of the Shoshone County Bonds for the retrofitting of the ICP hydrometallurgical plant and construction of the cobalt beneficiation plant.
It is now contemplated that the Project Financing Letter of Credit will be supported with a charge against the ICP and the Financial Letter of Credit will need additional support. Formation is currently reviewing its options to secure the additional support required for the Facility for the Shoshone County Bonds.
The 100% owned Idaho Cobalt Project is a unique, fully permitted primary cobalt deposit that will be capable of producing high purity cobalt metal. Cobalt is used in a wide variety of environmental and high-tech applications that include the re-chargeable battery and aero-space sectors.
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 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