Formation Capital Corporation

Formation Capital Corporation

January 23, 2007 08:30 ET

Formation Finalizes Sale of Big Creek Tailings Facility

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 23, 2007) - In a transaction that is designed to simultaneously bolster Idaho's economy and reduce impacts to the environment, Formation Capital Corporation (the "Company") (TSX:FCO) announced today that it has concluded the sale of a tailings facility and in North Idaho to Sterling Mining Company (Sterling).

Under the terms of agreement, Sterling paid Formation's wholly owned subsidiary, Essential Metals Corporation, (EMC) US $4.5 million for the Big Creek tailings facility in Shoshone County. Sterling also conveyed to EMC ownership of 16 acres of land near the facility. Sterling's final payment of US $3.9 million has now been made.

"We're fortunate because this transaction is not only good news for both companies, it's good news for the Idaho economy, workers and the environment," Bill Scales, President of Formation Capital, U.S. (Formation), said from his Salmon, ID office. "Sterling needs a tailings facility for its future operations at the Sunshine Silver Mine, and this facility is well-suited for their needs. At the same time, the environmental impact is reduced because Sterling won't have to build that capacity. The local communities stand to benefit from these operations."

The tailings facility was part of EMC's Big Creek Hydrometallurgical Complex located east of Kellogg, ID. EMC remains the owner and operator of the Complex, which includes the Sunshine Precious Metals Refinery, the SXEW copper refinery, the hydrometallurgical plant, the concentrate loading and unloading facility and the associated land package and buildings.

Formation is also developing the Idaho Cobalt Project in Lemhi County. Once permitted and in operation, the cobalt mine will ship its concentrates to the Big Creek Complex for further processing. The U.S. Forest Service is expected to release the draft Environmental Impact Statement on the Idaho Cobalt Project in the near future. "All of these things work together for the benefit of Idaho," Scales said. "The transfer of the tailings facility to Sterling helps both companies. As well, our ability to mine cobalt in Idaho and do the processing in this state is also a plus."

Formation Capital Corporation is a mineral exploration, development and refining company with assets concentrated in the state of Idaho. It owns the Idaho Cobalt Project, a unique high grade primary cobalt deposit in the final feasibility and permitting stage of development.

Formation Capital Corporation is dedicated to the principles of environmentally sound mining and refining practices, and believes that environmental stewardship and mining can co-exist. The Company trades on the Toronto Stock Exchange under the symbol FCO.

Formation Capital Corporation

Mari-Ann Green, Chairman and C.E.O.

The statements contained in this news release in regard to Formation Capital Corporation that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Formation Capital Corporation'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.

Contact Information

  • Formation Capital Corporation
    Mari-Ann Green
    Chairman and C.E.O.
    (604) 682-6229
    (604) 682-6205 (FAX)
    Encompass Communications
    Investor Relations
    Toll Free: 1-877-566-6592