Formation Capital Corporation
TSX : FCO

Formation Capital Corporation

March 07, 2008 08:00 ET

Formation Capital Corporation: Highest Grade Uranium Mineralization to Date Encountered on Virgin River Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 7, 2008) - Formation Capital Corporation (the "Company") (TSX:FCO) is pleased to provide its shareholders with an update on its Virgin River Uranium Project, as provided to the Company by project operator, Cameco Corporation. Located within the south-central portion of the Athabasca Basin in northern Saskatchewan, the project is a joint venture formed in 1998 between Formation Capital Corporation's wholly owned Canadian subsidiary, Coronation Mines Limited, and UEM, jointly owned by Cameco Corporation and by AREVA Resources Canada Inc. Coronation Mines Limited owns 2% of the project with a right to increase its ownership of the project up to 10% under certain circumstances.

Diamond drilling during the summer and fall of 2007 consisted of 3 pilot holes (DDH VR-028, 029 and 030) and 4 wedge holes (DDH VR-027W2, 028W1, 029W1 and 030W1) totaling a combined 4,788 metres. Results from previous diamond drilling completed earlier in 2007 were released in the Company's news release dated July 05, 2007.

Drill holes from the program were designed to follow up on the Centennial Zone mineralization intersected during the 2004 - 2006 programs, test the zone's strike extent and grade, and evaluate the importance of a known graphitic conductor located to the east of the mineralization, known as the C conductor.

The highest grade uranium mineralization to date has been encountered in this latest round of drilling and validated a newly developed geological interpretation of the mineralizing system. The Centennial Zone has now been defined over a strike length of at least 550 metres and remains open for expansion along the strike to the south. Drilling continues on the project with a second drill rig being mobilized to expedite exploration and development. Results of the drill program are as follows:



Summary of U3O8 Grade Calculations - Centennial Zone Summer / Fall Drilling
2007

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DDH VR-027W2
L11+00N 184+80E
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True Maxi-
Grade Thick- mum Average
Grade Calculation Cut- From To ness Grade Grade GT
Method off (m) (m) (m) (%U3O8) (%U3O8) (m x %)
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Geochemical Assay
U3O8 (ICP) 0.50% 805.7 819.9 14.2 52.200 9.386 133.28
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(includes) 1.00% 809.6 819.9 10.3 52.200 12.764 131.47
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Delayed Neutron
Count Method 0.50% 805.7 819.9 14.2 51.600 9.271 131.65
(Slowpoke) ---------------------------------------------
(includes) 1.00% 809.6 819.9 10.3 51.600 12.602 129.80
---------------------------------------------

---------------------------------------------
Average Geochemical
Assay (U3O8) 0.50% 805.7 819.9 14.2 51.900 9.329 132.46
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(includes) 1.00% 809.6 819.9 10.3 51.900 12.683 130.63
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DDH VR-029
L7+00N 184+50E
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True Maxi-
Grade Thick- mum Average
Grade Calculation Cut- From To ness Grade Grade GT
Method off (m) (m) (m) (%U3O8) (%U3O8) (m x %)
--------------------------------------------------------------------------
Geochemical Assay
U3O8 (ICP) 0.50% 797.0 799.5 2.5 1.760 0.813 2.03
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(includes) 1.00% 797.0 797.5 0.5 1.760 1.760 0.88
---------------------------------------------

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Delayed Neutron
Count Method 0.50% 797.0 799.5 2.5 1.720 0.815 2.04
(Slowpoke) ---------------------------------------------
(includes) 1.00% 797.0 797.5 0.5 1.720 1.720 0.86
---------------------------------------------

---------------------------------------------
Average Geochemical
Assay (U3O8) 0.50% 797.0 799.5 2.5 1.740 0.814 2.04
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(includes) 1.00% 797.0 797.5 0.5 1.740 1.740 0.87
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DDH VR-029W1
L7+00N 184+50E
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True Maxi-
Grade Thick- mum Average
Grade Calculation Cut- From To ness Grade Grade GT
Method off (m) (m) (m) (%U3O8) (%U3O8) (m x %)
--------------------------------------------------------------------------
Geochemical Assay
U3O8 (ICP) 0.50% 797.5 802.0 4.5 38.000 10.408 46.84
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(includes) 1.00% 798.0 802.0 4.0 38.000 11.630 46.51
---------------------------------------------

---------------------------------------------
Delayed Neutron
Count Method 0.50% 797.5 802.0 4.5 38.400 10.301 46.36
(Slowpoke) ---------------------------------------------
(includes) 1.00% 798.0 802.0 4.0 38.400 11.508 46.03
---------------------------------------------

---------------------------------------------
Average Geochemical
Assay (U3O8) 0.50% 797.5 802.0 4.5 38.200 10.355 46.60
---------------------------------------------
(includes) 1.00% 798.0 802.0 4.0 38.200 11.569 46.28
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The 2007 diamond-drilling program focussed on outlining the northern and the southern strike extent of mineralization of the Centennial Zone. Significant uranium intersections were encountered in six diamond drill holes (DDH's VR-026, VR-027, VR-027W1, VR-027W2, VR-029 and VR-029W1), with an additional five drill holes (DDH's VR-025, VR-028, VR-028W1, VR-030 and VR-030W1) intersecting significant alteration, structural disruption and anomalous radioactivity.

DDH VR-027W2, a wedge hole, designed to test the presumed down-dip extension of predominantly Athabasca Group-hosted mineralization intersected in DDH's VR-027 and VR-027W1 encountered significant high-grade mineralization straddling the Athabasca Group - Virgin River Domain unconformity. The interval of high-grade mineralization yielded an average assay (ICP-OES and DNC) of 9.329% U3O8 over 14.2 m from 805.7 - 819.9 m equals 132.46GT, that includes an interval of 12.683% U3O8 over 10.3 m from 809.6 - 819.9 m equals 130.64GT and a 30 cm interval of 51.9% U3O8. This intersection is the best ever obtained on the Centennial Zone to date.

DDH VR-028, a pilot hole, designed to test the presumed down-dip extension of weak Athabasca Group-hosted mineralization intersected approximately 100 m above the unconformity in DDH VR-026 encountered elevated radioactivity and local weak mineralization immediately above the Athabasca Group-Virgin River Domain unconformity.

DDH VR-028W1, a wedge hole, designed to test the unconformity to the grid east of the low-grade intersection in DDH VR-028 encountered weak mineralization associated with the Athabasca Group - Virgin River Domain unconformity. Significant post-Athabasca faulting, the most intense intersected to date on the Virgin River project, affects the Virgin River Domain basement assemblage. This intense structural disruption, coupled with the presence of Virgin River Domain quartzites (siliceous mylonites) in the basement section of all three drill holes on L13+00N and the weakly graphitic pelitic schists in DDH VR-028W1, suggests that a major crosscutting fault has displaced the basement stratigraphy and perhaps the Centennial Zone itself in this area.

DDH VR-029, a pilot hole, designed to test the presumed strike of the Centennial Zone immediately to the grid west of two prior drill holes DDH's VR-020 and -020W1 intersected weak mineralization immediately below the Athabasca Group - Virgin River Domain unconformity. DDH's VR-020 and VR-020W1 are believed to have overshot the possible southern strike continuation of the zone. DDH VR-029 intersected elevated radioactivity and weak mineralization immediately below the Athabasca Group - Virgin River Domain unconformity. The interval of weak mineralization yielded an average assay (ICP-OES and DNC) of 0.814% U3O8 over 2.5 m from 797.0 - 799.5 m equals 2.04GT, that includes an interval of 1.740% U3O8 over 0.5 m from 797.0 - 797.5 m equals 0.87GT.

DDH VR-029W1, a wedge hole, designed to test the unconformity to the grid east of the weak mineralization intersected in DDH VR-029 encountered elevated radioactivity and local weak mineralization associated with the Athabasca Group - Virgin River Domain unconformity. DDH VR-029W1 intersected structurally controlled elevated radioactivity and significant mineralization associated with the Athabasca Group - Virgin River Domain unconformity. The interval of significant mineralization yielded an average assay (ICP-OES and DNC) of 10.35% U3O8 over 4.5 m from 797.5 - 802.0 m equals 46.60GT, that includes an interval of 11.569% U3O8 over 4.0 m from 798.0 - 802.0 m equals 46.28GT.

DDH VR-030, a pilot hole, designed to test the along strike projection of the Centennial Zone to the grid south of the unconformity-hosted mineralization encountered in DDH's VR-029 and VR-029W1. DDH VR-030 steepened significantly and is thought to have undershot the optimal target. Only minor elevated radioactivity was encountered above the Athabasca Group - Virgin River Domain unconformity in this drill hole.

DDH VR-030W1, a wedge hole, designed to test the unconformity to the grid east of the DDH VR-030 encountered only minor elevated radioactivity within the Athabasca Group, suggesting that the Centennial Zone is bending to the grid west and both DDH's VR-030 and VR-030W1 overshot the optimal target.

To date, over $12 million has been spent on the project exploring for a large unconformity-type deposit that has resulted in the discovery of the Centennial Zone. According to Cameco, the uranium intersections obtained in the Centennial Zone are the most significant ever encountered along the entire Dufferin / Virgin River Trend in more than 25 years of exploration.

The Joint Venture approved a budget of $5.5 million for 2008 to continue exploration of the project, an increase of 67% over last year's budget. E.R. (Rick) Honsinger, P.Geo., is the Qualified Person under National Instrument 43-101 who has reviewed the information in this release as submitted to the Company by the project's operator, Cameco Corporation. More news on the project will be released when available.

Formation Capital Corporation

Mari-Ann Green, 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.

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