Formation Capital Corporation

Formation Capital Corporation

June 28, 2005 14:00 ET

Formation Seeks Judicial Approval of Access Across Blackbird Mine

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 28, 2005) - Formation Capital Corporation (TSX:FCO) (the Company) announced today that it has brought a court action in Lemhi County seeking formal access across the Blackbird Mine for all purposes pursuant to relevant Idaho statute. The Blackbird Mine is owned by Noranda Mining, Inc. (NMI). On June 13, 2005, the Company acquired a certain letter, dated May 31, 2005, addressed to the Office of General Counsel, US Department of Agriculture (USDA) from the law firm of Covington & Burling. The letter was provided to the Company after it made a Freedom of Information Act request to the USDA. The USDA holds jurisdiction over the Salmon-Challis National Forest (FS) where Formation Capital is in the permitting and bankable feasibility stage of development on its Idaho Cobalt Project (ICP). Covington & Burling (C&B) is counsel to an Alcan, Inc. subsidiary, but C&B purports also to be acting on behalf of the Blackbird Mine Site Group (BMSG). BMSG is the dba of the subsidiaries of several companies, apparently including Alcan, Inc., Noranda, Inc, and Hanna Mining, which, collectively, are liable to the United States for on-going and past discharges of hazardous substances (primarily metals) from the Blackbird Mine to local streams, rivers and ground water. The Company's understanding is that, to date, BMSG has had to incur costs in excess of $50,000,000 because of its pollution from this site, and BMSG's remedial work continues. The Blackbird Mine is adjacent to the Idaho Cobalt Project.

Generally, the BMSG letters raised concerns about FCO operations possibly increasing the compliance cost of BMSG's continued pollution, but the May 31, 2005 letter, incorrectly captioned "Privileged and Confidential", stated the "BMSG has not given Formation permission to access the Blackbird Mine site for the construction of the exploration decline." Review of the Lemhi County real property records on June 14, 2005, did not disclose that the BMSG holds any real property interest in the Blackbird Mine that would permit Alcan's counsel to grant or withhold access across the Blackbird Mine. In fact, review of Idaho Secretary of State's records failed to disclose that any "Blackbird Mine Site Group" exists or ever existed under Idaho law, nor did such records disclose the existence or previous existence of a "Blackbird Mining Company," another apparently related entity, also not authorized to conduct business in Idaho. Noranda Mining Inc., freely has granted access to ICP since the inception of the ICP in 1993; however, Noranda Mining, Inc. has not been able to conclude negotiations with the Company for a formal easement agreement that was first proposed by the Company in 2001, negotiated over the intervening period, and for which a signature-ready copy of the easement agreement now resides with Noranda Mining, Inc. The Company believes the intramural relationships of the dba BMSG to be somewhat fractious, and this may be complicating the situation.

Accordingly, to try to rapidly simplify the situation, on June 14, 2005, FCO filed an action versus Blackbird Mining Company and Noranda Mining Inc., in Lemhi County Court pursuant to State of Idaho statute 47-902 ("Right of way for mining purposes"), which provides, in part, that "(w)hen any...mining claim is so situated, that for the more convenient enjoyment of the same a road...may be necessary for the better working thereof...the claimant is entitled to a right or way...through and across such other lands...". This statute provides for appointment of a local commission to "assess damages to the...lands of defendant," for bonding of such damages, and for access in advance of any actual trial of such issues. Thus, the Company is optimistic that any questions about access will be addressed expeditiously.

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.

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