VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 2, 2013) - Formation Metals Inc. (FCO.TO) (the "Company") announced today that it will not be proceeding, at this time, with the underground development on its 100% owned Idaho Cobalt Project (the "ICP") or any related construction as was anticipated in the Company's news release dated December 12, 2012.
"Although cobalt prices have recently exhibited signs of recovery, the weak prices seen over the last year, coupled with enhanced adversity to risk by potential financiers in these turbulent markets has made financing costs unattractive for the further development of the ICP at this time," stated Mari-Ann Green, CEO of Formation Metals Inc. She continued, "We have been working hard to reduce capital costs and increase recoveries at the ICP and we will be ready when the markets recover. This way we can preserve Formation's cobalt, copper and gold resources until economic circumstances merit their extraction. In the meantime we will pursue those projects that have the best likelihoods of realizing cash flow in the shortest time possible under current market conditions. The ICP is a valuable asset and we intend to preserve it for future development once conditions improve."
In addition, to ensure the financial health of the Company's existing treasury, we have been eliminating and are continuing to eliminate all non-essential capital and operating spending and are targeting significant savings over the next year. We have implemented cost savings measures and have been reducing general and administrative costs at our office locations through salary reductions and the re-deployment and elimination of positions. We sincerely appreciate the commitment and many contributions made by all our employees as well as the team that has been diligently developing the ICP. In particular, we acknowledge the forthrightness and cooperation of JDS Energy and Mining Inc., who managed the engineering, procurement and construction of the ICP.
Management intends to focus its efforts on the advancement of the business at the Sunshine Precious Metals Refinery to increase cash flow, and on a strategic review of its precious metals properties. The Refinery business consists of the established precious metals refining of high content silver materials, such as doré, the copper SX-EW refinery and the retrofit and start-up of the hydrometallurgical plant to process concentrates. Silver bullion produced at the refinery is accepted as "Good Delivery" on the COMEX. These businesses operate separately from the Company's ICP.
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 information update 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 information update 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.