VANCOUVER, Jan. 15, 2015 /PRNewswire/ - Formation Metals Inc. (FCO-TSX) ("Formation" or the "Company") is providing an update to shareholders on recent corporate and cobalt sector developments. As announced in the Company's July 9 and October 1, 2014 News Releases, in response to positive developments in the cobalt sector, the Company is 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 conducted internal studies to determine the viability of producing battery grade cobalt chemicals, developed a new mine plan, and produced updated economics for the Idaho Cobalt Project ("ICP"). Samuel Engineering, Inc. ("Samuel"), an independent engineering company, was commissioned to conduct a high level review of Formation's internal updates.
Samuel has recently completed their scope of work on the initial review and has recommended that the Company proceed with developing a Preliminary Economic Assessment ("PEA") technical report on producing battery grade cobalt chemicals from the ICP for the battery sector. In addition, the Company has commissioned Hazen Research, Inc. of Denver, Colorado, to conduct feasibility level metallurgical test work to develop definitive flow sheets for the ICP with the intent of moving the project towards feasibility level engineering.
A previously filed feasibility level technical report on the ICP, consisting of the mine and mill, and the Cobalt Production Facility (the "CPF"), outlined the engineering required to produce high purity cobalt metal. The Company is developing a PEA and is undertaking feasibility level metallurgical test work on the ICP due to the subsequent significant updates at the CPF required to produce battery grade cobalt chemicals. The Company intends to file the PEA report on SEDAR before the end of February 2015.
ICP and Cobalt
Cobalt prices hit a 29 month high of US$16.00 per pound in August 2014 and cobalt metal on the LME is currently trading just below US $15.00 per pound. A recent report from Metal Bulletin states that the cobalt market at the end of 2014 was surprisingly active. Market sentiment is that cobalt prices may have neared the bottom in 2014 and there is an anticipated tightening of cobalt supplies in 2015. Cobalt sulphate, which is utilized by many battery manufacturers, trades at a contained cobalt premium to the high grade cobalt metal price.
Cobalt's usage in batteries now accounts for 42% of global consumption. Cobalt in batteries has grown at a rate of 7.6% per year over the last five years to 2013. Some analysts have forecast that by 2020 cobalt's use in battery applications alone will be greater than the entire world market for refined cobalt in 2013. (Source: Darton Commodities Limited)
Management believes that the ICP could be well positioned to capitalize on the growing demand for cobalt, in particular battery grade cobalt chemicals. The ICP, located in the United States, offers a unique potential for North American consumers to secure an ethically sourced, environmentally sound, conflict free supply of battery grade cobalt chemicals, mined safely and responsibly in the United States.
The ICP remains the sole near term, fully permitted, primary cobalt deposit in the United States.
This news release has been reviewed and approved by Vice President of the Company E.R. (Rick) Honsinger, P.Geo., the Qualified Person for the Company as defined by NI 43-101.
Formation Metals Inc.
"J. Paul Farquharson"
J. Paul Farquharson
President & C.E.O.
This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Generally, forward-looking statements can be identified by the use of forward-looking terminology. Forward-looking statements are based on assumptions and address future events and conditions and are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements. Assumptions include that the Company will be able to file a new NI 43-101 compliant technical report before the end of February 2015 and the risks and uncertainties include that such a new technical report will not be filed by the end of February 2015 or at all. Further information regarding risks and uncertainties which may cause results to differ from those contained in forward-looking statements are included in filings by the Company with securities regulatory authorities and are available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws.
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 Formation Metals Inc. 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.
SOURCE Formation Metals Inc.