Formation Metals Inc. (TSX:FCO) (the "Company") is providing an update on the
progress of construction on its 100% owned Idaho Cobalt Project ("ICP"), managed
by JDS Energy & Mining ("JDS"). The ICP is comprised of the development of a
mine and construction of a concentrator at a primary cobalt deposit in Lemhi
County near the town of Salmon, Idaho, and the retrofit and construction of an
electrowinning cobalt production facility in Shoshone County, near Kellogg,
Idaho, U.S.A. 


The following information outlines progress made on the ICP since our last
update provided on October 4, 2012 and reflects the use of proceeds from our
US$5.0 million debenture announced on October 17, 2012. Construction at the mine
site concentrated on time critical construction tasks to prepare the project for
underground development and winterization of the construction site. These tasks
included access road upgrades, portal bench construction and the preparation of
the Tailings Waste Storage Facility ("TWSF") to accept waste rock from
underground development. Underground excavation to the ore face will commence
once the time critical construction tasks are completed and additional mine
finance is secured. The building of the required processing facilities such as
the mill, concentrator and water treatment plant are expected to begin
concurrently with underground development. Initial production is expected to
begin between 9 and 14 months from the commencement of underground development.


Idaho Cobalt Project Mine and Concentrator Site, near Salmon, Idaho:

Specific tasks accomplished over the past several weeks include:



--  Excavation and sub-grade preparation and installation of the foundation-
    drain piping of the south half of the TWSF 
    
--  Installation of a portion of the liners in the south half the TWSF 
    
--  Excavation and sub-grade preparation of the Water Management Pond
    ("WMP") 
    
--  Septic system drain field excavation 
    
--  Installation of pipeline from Portal Bench to Big Deer Creek for treated
    water discharge, including the in-stream diffuser, air release valves
    and reclamation seeding and mulching of the completed right of way 
    
--  Work completed on the portal access road, TWSF haul road, soil stockpile
    road and the WMP access road 
    
--  Repaired the 7900 level surface water diversion ditch 
    
--  Completed drilling of all monitoring and capture wells 
    
--  Security gate installed at the property boundary on the Big Flat area 



The mine site has been winterized and construction efforts will continue upon
the successful conclusion of mine financing.


Big Creek Hydrometallurgical Refining Complex, outside of Kellogg, Idaho:

Engineering and construction efforts at the refinery focused on the development
of the Piping and Instrumentation Diagrams ("P&ID's") and General Arrangement
("GA") drawings at the Cobalt Production Facility ("CPF"). In addition,
modifications of the silver refinery progressed to accommodate the requisite
modifications for third party copper/silver concentrates as well as cobalt
concentrates from the ICP. P&IDs show the connectivity of equipment, sensors,
and valves in a control system. P&ID's also provide the basis for the conceptual
layout of the CPF. 


Activities related to these engineering efforts include the following:



--  Initiated Process Hazard Assessment of CPF designs 
    
--  Prepared and reviewed budget support documentation and project execution
    strategy as part of ICP finance due diligence 
    
--  Placed cobalt electrowinning cells on the CPF foundation beams and
    covered them for winter 
    
--  Prepared an engineering schedule for completion of P&ID review and GA
    drawings for completion in January, 2013 
    
--  Review of P&ID & Control Philosophy by the Company and JDS is underway.
    Over half of P&ID's and their related sections of control philosophy
    were finalized. 
    
--  Revised CPF layout for expansion and optimization. 



Several photos have been posted on the Company's website documenting the above
work and can be viewed at
http://www.formationmetals.com/s/ConstructionGallery.asp. In addition, video
updates dated October 2012 of construction progress at both the mine site and at
the refinery have been posted on the Company's website at
http://www.formationmetals.com/s/Presentations.asp.


Mine Finance:

Management continues to work with potential financiers on securing mine
financing. As disclosed in the Company's update to shareholders dated October 4,
2012, financing efforts include securing a credit facility for issued tax exempt
industrial bonds, securing a high yield debt facility and / or an off-take
arrangement with an end user. Also deemed reasonable by management is an
alliance with capable strategic partners with interests in Formation Metals'
corporate growth. 


"Securing the final mine finance continues to be our top priority," stated
Mari-Ann Green, CEO of Formation Metals Inc. She continued, "The (US) $5 million
raised in October has allowed us to initiate time critical construction
activities to prepare the site for underground development. The decision to
begin processing third party copper/silver concentrates at the refinery has
required some engineering design modifications, and this in turn has required
additional reviews from potential lenders' engineering teams, which of course,
all takes time. Although construction activities have been curtailed for the
winter, engineering activities and equipment preparation continue."


Formation Metals Inc. is a well-established, mineral exploration, development
and refining company that is dedicated to the principles of environmentally
sound mining and refining practices, and believes that environmental stewardship
and mining can co-exist. Formation trades on the Toronto Stock Exchange under
the symbol FCO.


Formation Metals Inc.

Mari-Ann Green, C.E.O.

This information update 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 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. 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. Further information on the Company is available at
www.sedar.com.


The statements contained in this information update 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.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Formation Metals Inc.
E.R. (Rick) Honsinger, P.Geo.
V.P. Corporate Communications
604-682-6229
inform@formationmetals.com
www.formationmetals.com
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