Formation Metals Responds to BCSC Clarification Request and Technical Disclosure Review

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 1, 2014) - Formation Metals Inc. (TSX:FCO) ("Formation" or the "Company") reports that as a result of a recent technical disclosure review by the British Columbia Securities Commission ("BCSC"), the Company is issuing the following news release to clarify certain disclosures.

Specifically, the Company is addressing the following disclosure and filing issues:

Since the filing of the June 23, 2008 amended technical report (the "Technical Report") on the Idaho Cobalt Project (the "ICP"), the Company has spent US$65.3 million and completed two phases of the ICP construction program that commenced in June 2011 and completed in December 2012. Subsequent to the filing of the Technical Report, the Company has undertaken substantial work and optimization studies on the ICP. This optimization data was derived from regular feedback and progress reports received from its Engineering, Procurement and Construction Manager during phases I and II of construction. Phase III of construction involves the commencement of underground development and is contingent upon the successful conclusion of mine financing.

In light of improving financial markets and positive developments in the cobalt sector, the Company announced in July 2014 that it was pursuing several opportunities resulting from the significant increase in the long term demand for cobalt used in rechargeable batteries required for electric and hybrid electric vehicles where cobalt is one of the key components. The Company intends to file a new National Instrument 43-101 ("NI 43-101") compliant technical report on SEDAR and the Company's website before the end of February 2015.

However until such time as the new technical report is released, when relying on the Technical Report, readers are cautioned regarding the following changes that have occurred since the filing of said report:

• The completion of the 2010 mine plan optimization drilling program;
• Work in progress to update the resources, mine plan and production schedule;
• Flowsheet changes to reflect several shifts in focus in metals recoveries and producing final products:
  • At the concentrator, the addition of a flotation circuit to produce Copper concentrate to be sold;
  • At the Cobalt Production Facility (the "CPF"), addition of Copper Sulfate production to be sold;
  • At the CPF, addition of Cobalt Sulfate production (battery grade cobalt); and
  • At the CPF, addition of Gold circuit.
• Relocation of the CPF; a new location has not been determined yet;
• Cobalt prices have varied dramatically since 2008; ranging from a high of US$50.00/lb. to a low of US$12.00/lb. The Technical Report utilized a base price of US$22.52/lb. Current cobalt pricing ranges between US$14.00-$16.00/lb.;
• Capital cost of equipment, both mine and process;
• Operating cost estimates, both mine and process;
• Construction cost estimates; and
• The new requirement to provide post tax economic analysis.

A number of risks including metals price, metals recovery, plant performance, additional resources, and permitting were identified in the Technical Report. As discussed above, the changes since the filing of the Technical Report have also changed and increased these risks. The readers are cautioned to not solely rely on the Technical Report without consideration of the impact these changes have on the risks of the project. These risks remain uncertain until a new NI 43-101 compliant technical report is completed incorporating these changes.