Formation Metals Dispels Dissident’s Claims, Urges Re-election of Current Directors

Formation Metals Inc. (TSX:FCO) released a letter to its shareholders, seeking to re-elect its current directors before the deadline of Wednesday, June 19, 2013 at 10:00pm (Pacific Time). The letter states, “Dundee, in what seems to be a spiteful campaign, is attempting to blame management for the decline in world commodity pricing, the world financial crisis and its devastating effect across the entire mining sector. Your highly qualified and experienced board and management team have been through tough times before and have successfully managed economic turnarounds – and are doing the same now. However, Dundee is attempting to halt the execution of our strategy, remove the two most experienced executives from the board and replace them with candidates who lack the credentials or the track record to guide Formation through this difficult time.”

As quoted in the press release:

All junior mining companies face similar challenges in finding a prospect, managing it through exploration, development, scoping, pre-feasibility, bankable feasibility, permitting, construction and finally into production. Mining is a long lead-time business and permitting alone can take 7-10 years. As a result, all junior mining companies are capital intensive and operate at a loss until they reach production. Along the way, we all are very much exposed to world demand, world commodity prices and the availability and cost of raising the necessary capital. Formation is no different in facing these fundamental challenges. We have shown tremendous achievements in light of these challenges. We have the absolute right asset – the only primary cobalt deposit in the US with the US representing 60% of the demand for high purity cobalt. We have taken the company from a grass roots prospect through to construction, which is now fundamentally prepared for the exciting pre-production phase of underground development.

Your current management has a track record for weathering storms with strong recoveries; for example, in October 2008 the fall of Lehman Brothers resulted in our high yield note debt financing having no market at the same time as our cobalt project permit was overturned. This resulted in us being unable to market the debt financing prospectus. However, by the middle of 2009, under the stewardship of your management and board Formation had recovered to a share price of $2.60. At that time we began to bear witness to the onset of the world financial crisis; however, again your management and board acted and the share price reached the $2.60 level by the end of 2010.

Click here to read the Formation Metals Inc. (TSX:FCO) press release

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