Ms. Mari-Ann Green reports

FORMATION METALS' IDAHO COBALT PROJECT CONSTRUCTION UPDATE

Formation Metals Inc. is providing an update on the progress of construction on its 100-per-cent-owned Idaho cobalt project (ICP), managed by JDS Energy & Mining. The ICP comprises a primary cobalt deposit in Lemhi county near the town of Salmon, Idaho, and the cobalt production facility in Shoshone county, near Kellogg, Idaho, United States.

Subsequent to the company's news release dated Sept. 8, 2011, considerable construction progress has been made at the mine site and at the cobalt production facility. These areas include the crusher and concentrator pads, tailings waste storage facility (TWSF), portal bench, powerline, tram right-of-way and discharge terminal at the minesite, as well as pad preparation and concrete pouring at the cobalt production facility. Photographs documenting the construction progress are available at the company's website.

Pad earthwork construction at the concentrator, crusher, tram discharge terminal and miner's dry are complete and additional equipment has been procured including the crusher, the administration building, and the backup generator. At the TWSF the construction of all berms and the wetlands mitigation pond has been completed. The south side of the TWSF has been excavated and the subdrain installed. Roadwork on the associated infrastructures to and from these facilities is nearing completion and transportation route improvements to Williams Creek Road, Panther Creek Road and Meadow Creek Road are complete. Portal bench excavation has commenced. Geotechnical drilling has commenced to assist in the further evaluation of engineering parameters for surface and underground work at the mine.

At the cobalt production facility, the pouring of concrete for the foundations of the new building is complete. Renovation of the existing ball mill and copper circuits are continuing and will continue throughout the winter. Final engineering for the cobalt production facility is continuing.

Over the course of the next several months, the company intends to continue with those construction activities at the mine site which are least adverse to winter conditions. These activities include the drilling of surface monitoring wells and the preparation of the work areas adjacent to the mine. Plowing of snow and maintenance of access roads and building sites is continuing and will continue throughout the winter months.

"Limiting construction over the winter months will affect the schedule for initial production, but at this point, we expect it will be minimal," stated Mari-Ann Green, chief executive officer of Formation Metals. She continued: "Right now the company is concentrating its efforts on securing the credit support necessary for the recovery zone facility bonds (see company news release dated Nov. 22, 2011). Once this is in place, the company intends to prepare an updated construction and production schedule."

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