Formation Metals Inc.(“Formation” or the “Company”) is a well-established Canadian mineral exploration and mine development company listed on the Toronto Stock Exchange under the symbol FCO, the OTC-QX trading platform under the symbol FMETF, and on the Frankfurt Exchange under the symbol FOQ. Through its wholly owned subsidiaries it has interests in base and precious metals and uranium projects in Canada, United States and Mexico.
The Company’s primary asset, located in the mining friendly state of Idaho, is the 100% owned, fully NEPA permitted Idaho Cobalt Project (ICP) which is comprised of the mine and mill near Salmon, Idaho and the proposed Cobalt Production Facility (CPF) for refining ICP mine concentrate. The ICP mine site is now fundamentally prepared to commence underground development contingent on successful conclusion of mine financing.
The ICO offers unique potential for consumers to secure an ethically sourced, environmentally sound supply of battery grade cobalt chemicals, mined safely and responsibly
The ICP has received a final Environmental Impact Statement and positive Records of Decision from both the U.S. Department of Agriculture National Forest Service and the U.S. Environmental Protection Agency. In addition, a Feasibility Study on the ICP was completed in 2008 which allowed the Company to finance the initial construction of the project. 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.
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 announced in April 2015 completion of a positive Preliminary Economic Assessment (PEA) on the ICP. The PEA is based on an underground mine with a target production rate of 800 tons per day (“tpd”) with a weighted average annual production of 2,771,000 lbs of cobalt, 4,533,000 lbs of copper and 3,600 oz of gold over a 12.5 year mine life with an estimated pre-production period of 21 months utilizing a 0.20% cobalt cut-off. The economic model uses a 35% corporate tax rate and an 8.5% discount rate, resulting in an after tax NPV of $113.45M and an IRR of 24.07%. This current PEA utilizes an updated resource, mine model and mine schedule with intentions to produce cobalt and copper sulfate chemicals and gold at the CPF. The previous feasibility level study on the ICP utilized a previously calculated resource base to produce high purity cobalt metal suitable for critical applications in the aerospace sector.
The ICP is the only near term, fully permitted primary cobalt deposit in the United States.