Formation Capital Corporation

Formation Capital Corporation

December 17, 2008 08:00 ET

Formation Receives Air Permit Pre-Construction Authorization

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 17, 2008) - Formation Capital Corporation (TSX:FCO) has been provided an update by its wholly owned subsidiary, Formation Capital Corporation, U.S. ("the Company") in regards to permitting, personnel and equipment procurement status for the 100% owned Idaho Cobalt Project (ICP) located near Salmon, Idaho.

An "Air Permit Pre-Construction Authorization" for the ICP has now been received from the Idaho Department of Environmental Quality (DEQ). "This permit," explains Preston Rufe, Environmental Manager of the Company, "will allow us to proceed with construction before the 'Permit to Construct' is finalized and issued, once we secure our Record of Decision (ROD) and other conditions are met." The Company has submitted copper loading demonstration plans and methyl-mercury plans to the DEQ for review, and, upon approval, the plans will become integral to the issuance of the DEQ's "Clean Water Act Section 401 Certification". A ROD for the ICP from the United States Department of Agriculture Salmon-Challis National Forest Service is still expected in January 2009.

Having key personnel in place is a priority for successful construction and operation of the ICP, and the Company is pleased to announce the hiring of Mr. William Hasz for the position of Mine Superintendent. Mr. Hasz brings to the Company a strong engineering background and over 20 years experience in underground mining including mine development, underground systems development, production planning and scheduling and personnel management. He most recently served as Technical Services Manager and Chief Engineer for the Sunshine Mine in Northern Idaho. Mr. Hasz has a Bachelor of Science degree in Mining Engineering and is a member of the Society for Mining Metallurgy and Exploration. Guy Jeske, General Manager of the Company, commented, "we welcome Mr. Hasz to our team and look forward to his leadership in the development, construction, startup, and operation of our cobalt mine."

The timely purchase of long lead time items in preparation for the commencement of construction is a critical factor in the procurement process. Specialized equipment for the Idaho Cobalt Project's mine and mill operations continues to arrive at the Salmon, Idaho staging areas and, in the past two months, items received include: flotation cells, structural steel for the tram discharge and loading terminals, tram power unit, main power transformer, mill hydro-cyclones, ball mill shell and trommel screen, concentrator bridge crane and the concentrate scale. The tram ore bucket and accessories are scheduled to arrive by year end in preparation for production start-up.

The prevailing state of world-wide financial markets presents a challenging global mining environment in which to move the ICP forward. In response, Formation's management has taken significant proactive measures to reduce spending and institute cost saving measures wherever possible, including, but not limited to, release of outside contractors and engineering companies, cancellation of media spending, re-negotiation of outstanding supplier payables, eliminating and/or capping business travel, subleasing office space and a 15-30% company-wide wage rollback. Although markets are invariably cyclical and management remains optimistic about future economic conditions, these short term measures must be adopted to ensure that the Idaho Cobalt Project is not compromised and to allow Formation to thrive in its business transactions going forward.

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, 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
    E.R. (Rick) Honsinger, P.Geo.
    V.P. Corporate Communications
    (604) 682-6229
    (604) 682-6205 (FAX)