MINING MARKETS & INVESTMENT NEWS — Formation, Etruscan finance projects

Vancouver-based Formation Capital (FCO-T) is raising $500,000 in a private placement of 1.25 million units.

Each unit consists of one share and one warrant, and will be sold for 40 cents. A warrant will entitle the owner to acquire an additional share at 40 cents for 18 months. The shares are subject to a minimum hold period of four months.

A portion of the proceeds are expected to be applied to exploration work on the company’s wholly owned Sunshine cobalt project in Idaho, which was recently the subject of a positive prefeasibility study.

Diluted proven and probable reserves stand at 974,700 tons grading 0.687% cobalt and 0.686% copper, plus 0.020 oz. gold per ton. An additional diluted inferred resource weighs in at 1.4 million tons of 0.628% cobalt, 0.525% copper and 0.017 oz. gold.

The total capital cost of the project, including an off-site hydrometallurgical plant, is estimated at US$81.2 million. These costs include US$6 million for permitting, bulk-sampling, metallurgical testing and the final feasibility.

Formation Capital has 14.7 million shares fully diluted and a working capital of $500,000.

• Dartmouth, N.S.-based Etruscan Resources (EET-T) has accepted an offer from South Africa’s Rand Merchant Bank to provide US$3.5 million for completion of a feasibility study on the Samira Hill gold project in Niger, West Africa.

Etruscan will issue to the bank seven short-term exchangeable capital units at an issue price of US$500,000 per unit. The units will bear interest at the rate of LIBOR plus 2.5% per annum. The units will be outstanding for 36 months from the issue date, which is expected to be the end of January 1999. The units can be converted after six months, at the option of the bank, into shares of Etruscan.