VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 13, 2013) - Formation Metals Inc. (FCO.TO) ("Formation" or "the Company") announced today that on May 9, 2013 it redeemed bond debt of US$43.6 million. The debt was made available through the Federal Stimulus Package Recovery Zone Facility Bonds ("RZFB") to complete Phase I and Phase II construction of the Company's 100% owned Idaho Cobalt Project ("ICP"). The debt was redeemed using the Company's cash which had been restricted as collateral for the bonds.
"This relieves the Company of all of its long term debt and interest obligations associated with the bonds, and also gives the company access to US$9.5 million which had been restricted as excess collateral for the RZFB. These funds can now be added to the Company's existing working capital and used to move the Company's other business forward" stated Mari-Ann Green, C.E.O. of Formation Metals Inc. She continued, "This action makes sense in light of our announcement last week stating we were deferring the underground development of the ICP until market conditions improve."
The redemption of the bonds together with the Company's previously announced cost cutting measures are expected, over the course of the next twelve months, to result in reductions in overhead of approximately $2.0 million.
The investment bankers Thornton Farish Inc, acted as the underwriter for the Bonds.
The ICP 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 news 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.