Re: Formation Metals Inc.

News Release Tuesday, February 07, 2012 Union Bank Takes Over as Lead Arranger for Formation Metals Cobalt Projects US$80 Million Credit Facility To: tsx Vancouver, B.C., February 7, 2012, Formation Metals Inc.

(FCO-TSX) ("Formation" or the "Company") announced today it has signed an agreement with Union Bank, N.A.

("UB") mandating UB as Lead Arranger to provide a credit facility supporting the Companys US$77.7 million in tax exempt Recovery Zone Facility Bonds (the "Bonds").

A portion of the proceeds from the sale of the Bonds is being used to finance the development of Formations Idaho Cobalt Project (the "ICP") with the remaining portion held in trust in the Companys construction account.

The credit facility will provide letter of credit support , which will free restricted cash from the Bonds for the further development of the ICP.

It is expected that the transaction will close on or about March 15, 2012.

The ICP consists of the mine and concentrator near Salmon, Idaho and a cobalt production facility near Kellogg, Idaho.

UB was involved as one of the key syndicate members in a previously structured credit facility with a major Eurozone bank as the lead arranger.

The facility could not be finalized due to the prevailing Eurozone debt market turmoil.

During the previous structuring efforts, a favorable independent engineering report was completed along with two positive independent cobalt market studies.

Extensive legal due diligence was also successfully completed.

UB is proposing to arrange a club of underwriters that will include themselves and at their discretion, additional lenders.

"Although the Eurozone situation has impacted the financial markets in general, as a US institution that is part of the Mitsubishi UFJ Financial Group, Union Bank has been far less impacted by the Eurozone situation than the Eurozone banks", commented Mari-Ann Green, CEO of Formation Metals.

"We are very pleased to be able to work with Union Bank.

Their prior involvement as a syndicate member will allow them to quickly move forward on structuring the new facility." Initial production from the ICP is targeted for Q4 of this year.

During the winter months, Formation has continued to advance construction and engineering on the ICP, including: additional detailed engineering, concrete work, refurbishing the copper circuits at the cobalt production facility, mine portal bench work and rock bolting at the mine site. For further information please contact: E.R.

(Rick) Honsinger, P.Geo.

V.P.

Corporate Communications Formation Metals Inc. 1730 - 999 West Hastings Street Vancouver, BC, V6C 2W2 Tel: 604-682-6229 Email: Web: formcap.com The statements contained in this news release in regard to Formation Metals Inc that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Formation Metals Inc.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.
You can also view this News Release on our website at: http://www.formationmetals.com/s/News.asp?ReportID=505781 ======================================================================= Copyright (c) 2009 FORMATION METALS INC.

(FCO) All rights reserved.

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