July 7, 2016

Formation Appoints Red Cloud as Capital Markets Advisor

Vancouver, B.C., July 7, 2016, Formation Metals Inc. (“Formation” or the “Company”) (TSX:FCO) is pleased to announce it has entered into an agreement with Red Cloud Klondike Strike Inc. (“RedCloudKS”) to provide capital markets advisory services.

“The experienced team at Red Cloud offers great exposure to a comprehensive technical and retail database with a proven track record of success. The timing of this agreement bodes well as we move into an advanced engineering phase of development of the Idaho Cobalt Project and position the Company for project financing”, stated Paul Farquharson, President & CEO of Formation Metals. He continued, “This is an exciting time for all our stakeholders as the cobalt project advances through feasibility to produce ethically sourced cobalt salts - a critical raw component for the rechargeable battery sector”.

Formation has reached a number of milestones over the past year on the Idaho Cobalt Project (“ICP”) and has recently commissioned a Feasibility Study on the project (see Company News Release dated June 21, 2016). Management believes the Company is well positioned to become an important player in the supply of ethically sourced cobalt in the rapidly growing rechargeable battery sector, fueled primarily by the explosive growth of Electric Vehicles. Cobalt’s use in rechargeable batteries has grown to 49% of total cobalt consumption and continues to grow at a rate of 11.7% y/y. Cobalt has recently experienced much media, analyst and news writer attention, as the commodity heads into a deficit situation and is expected to remain in deficit into 2018 and beyond. (Darton Commodities Ltd., Jan 2016 and CRU, May 2016).

About Formation Metals Inc.

Formation Metals Inc.’s primary asset, the ICP, remains the sole, near term, environmentally permitted, primary cobalt deposit in the United States and offers a unique potential for North American consumers to secure an ethically sourced, environmentally sound supply of battery grade cobalt chemicals, mined safely and responsibly in the United States.

About RedCloudKS

RedCloudKS is an exempt market dealer focused on providing unique and innovative marketing, growth opportunities, and market exposure for select mining companies. The RedCloudKS team has a mix of technical and financial expertise with over 100 cumulative years of combined mining and corporate advisory experience. Working as an extension of management, the RedCloudKS team uses its global network of mining and capital markets professionals and extensive in-house experience in the many facets of the mining business to help companies identify sources of capital and quality actionable merger, acquisition and divestiture opportunities, and to generate and maintain important relationships with key investors.

E.R. (Rick) Honsinger, P.Geo., Vice President of the Company, is the Qualified Person as defined by National Instrument 43-101 who has supervised the preparation of this news release and has approved its contents.

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. Statements in this news release pertaining to expected finance completion date are forward-looking statements. These 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. Such projections are and will inevitably always be dependent on assumptions about future mineral prices and development costs which will be subject to fluctuation due to global and local economic and industry conditions. Further information regarding risks and uncertainties which may cause results to differ from those contained in forward-looking statements is included in filings by the Company with securities regulatory authorities and is 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. Although the Company has disclosed that the Idaho Cobalt Project remains the sole, near term, environmentally permitted, primary cobalt deposit in the United States and offers a unique potential for North American consumers to secure an ethically sourced, environmentally sound supply of battery grade cobalt chemicals, there is no guarantee that the Company will attain commercial production of such cobalt chemicals for use in the rechargeable battery sector. 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.