🕐16.12.10 - 21:27 Uhr

Formations Stimulus Act Recovery Zone Bond Allocation Increased to US $77.7 Mill
ion by State of Idaho



Re: Formation Metals Inc.

News Release Thursday, December 16, 2010 Formations Stimulus Act Recovery Zone Bond Allocation Increased to US $77.7 Million by State of Idaho To: tsx Vancouver, B.C., December 16, 2010 Formation Metals Inc.

(FCO-TSX) ("Formation") is pleased to announce that its 100% owned subsidiary, Formation Capital Corporation, U.S., (the "Company") has been issued two revised Certificates of Allocation from the State of Idaho authorizing an additional US $31 million in Federal Stimulus Program Recovery Zone Facility Bonds with the Company as Ultimate Beneficiary.

The bonds are to be issued by The Industrial Development Corporation of Lemhi County, Idaho and the Industrial Development Corporation of Shoshone County, Idaho.

Any funds received from the sale of tax exempt bonds will be used to develop the Companys 100% owned Idaho Cobalt Project mine located in Lemhi County and retro-fit its hydrometallurgical facility located in Shoshone County, Idaho (the "ICP"). "This [US] $31 million is in addition to the allocation of [US] $46.7 million granted by Idahos Department of Commerce to the Company in September", stated Mari-Ann Green, Formations Chairman and C.E.O.

(see Company news release dated September 16, 2010).

"The Company, along with the two Industrial Development Corporations and the bond underwriter, can now concentrate its efforts on getting the Recovery Zone Facility Bonds issued prior to the December 31, 2010 expiration date for this category of bonds.

This affords the Company the flexibility to apply for approximately [US] $45.4 million in Solid Waste Private Activity Bonds at a future date, as these types of bonds do not have an expiry date.

Following the expected issuance of the Recovery Zone Facility Bonds, the Company will continue to work to secure credit approval for long term bank project financing as outlined in the Companys news release dated November 30, 2010", Ms.

Green concluded.

The Company has engaged Thornton Farish Inc, Investment Bankers as the underwriter for the Recovery Zone Facility Bonds.

Thornton Farish is widely recognized as one of the early pioneers of industrial revenue bond financing.

The firm has extensive expertise and experience in all forms of tax-exempt bond financing; including recovery zone facility bonds and solid waste bonds. The 100% owned Idaho Cobalt Project 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" Mari-Ann Green, C.E.O. You can also view this News Release on our website at: http://www.formationmetals.com/s/News.asp?ReportID=433797 ======================================================================= Copyright (c) 2009 FORMATION METALS INC.

(FCO) All rights reserved.

For more information visit our website at http://www.formationmetals.com/ or send mailto: ----------------------------------------------------------------------- To Unsubscribe from this email list, click here: http://www.formationmetals.com/s/Unsubscribe.asp? =======================================================================



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