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Gold/Mining/Energy : FORMATION CAPITAL CORPORATION- $900m in Cobalt finds -- Ignore unavailable to you. Want to Upgrade?

To: Bannick who wrote (55)	1/26/1999 6:09:00 PM
From: donald martin	Read Replies (1) \| Respond to of 87

Mike, After today's action (inaction?) I don't know now if we'll see C$0.15. Bids came in at C$0.17 at the open and slowly grew to C$0.23 by the close. Only trade was done on the offer @ C$0.265. I figure the beating we've seen this past week was someone who just had to sell regardless of the merits of the company's assets. I know you can never tell when someone just HAS to move a mess of paper, and maybe we'll get one more chance to buy REAL cheap. But we seem to have attracted some bargain hunters. Don

To: Bannick who wrote (55)	1/27/1999 3:38:00 PM
From: donald martin	Read Replies (2) \| Respond to of 87

Mike, Someone was on the bid for a while today at C$0.25. Looks like they finally acquiesed and paid the C$0.27. (There was some that traded earlier at C$0.23.) I think this is good for FCO. It's nice, quiet, unhyped, patient buying.

To: Bannick who wrote (55)	6/4/1999 4:26:00 AM
From: ForYourEyesOnly	Respond to of 87

Cobalt shortage expected to deepen By Paul Solman Cobalt prices have jumped as signs of a serious shortage grip the market. The metal, an essential component of super alloys, batteries and pigments, has risen to about $20 a pound in the past few days against $15 last week, and industry insiders say this is only the beginning. "Once the need to buy takes hold, people will buy regardless of price," a trader said yesterday. Though the officially quoted price remains at about $16 for top purity metal, traders said deals were being done at much higher levels. "The tightness in the market means people are prepared to pay a premium of $3.50 to $4 to get hold of cobalt," another trader said. "We are rationing our sales." Cobalt is traded between buyers and sellers on the free market rather than via an exchange. The latest rise in prices is the second sharp jump this year. The metal trebled in value virtually overnight in February to $18 a pound on reports that MRG, a London trading group, had acquired a large proportion of deliverable metal. MRG has since denied it has achieved a dominant position in the market, and industry insiders said yesterday sales were being made by other traders. Producers, consumers and traders had been expecting the market to be tight this year. World cobalt consumption is estimated at 34,000 tonnes, according to Resource Strategies, a research group, while supplies are put at less than 30,000 tonnes. However, this week's price rise appears to be partly a reaction to revelations at the Cobalt Development Institute's annual conference last week in London. The conference included a presentation by Rami Weisfisch, head of MRG, in which he forecast sharply lower cobalt production this year by ZCCM of Zambia and Gecamines of the Democratic Republic of Congo, the two main African producers which together provide about 40 per cent of world supplies. MRG holds exclusive cobalt marketing rights for the two companies, and Mr Weisfisch's presentation was a landmark in that it was the first time the companies had issued a joint statement about their position. ZCCM produced 350-400 tonnes of cobalt a month for most of 1998, but its output has been falling sharply since the beginning of the year, Mr Weisfisch told the conference. In April, it produced only 255 tonnes and that figure is expected to drop to 146 tonnes in August. Its stocks have also fallen sharply to 102 tonnes against an average of 1,327 tonnes between 1988 and 1998. Gecamines' monthly production has been hit by last year's low prices, falling from 386 tonnes in October to only 71 tonnes in February, Mr Weisfisch said. Congolese stocks were 800 tonnes at March 31 against an average of 3,333 tonnes between 1990 and 1998. The prospect of lower African output comes on the back of problems at plants in Russia, while the big Canadian producers are struggling to fulfil existing contracts, having run down their inventories last year when prices were falling. New production from Australian producers has yet to come fully on stream and will not be enough to make up for the African shortfall. Mr Weisfisch announced that the African producers would set a "reference price" for cobalt sales, raising prices to generate cash for investment, though industry insiders are sceptical about the move. A reference price introduced in the 1980s fell into disuse as it was ignored by traders. "With output falling, the Africans are in a weak position. They're going to lose market share and the political situation there means they are unlikely to be able to increase investment in production," an industry insider said. Meanwhile it looks as though market forces are pushing prices up on their own. Buyers in Japan, the second largest cobalt consumer, are reported to be desperate for supplies, with little or no metal available to consumers. "Historically, there is plenty of scope for cobalt to trade much higher," a trader said yesterday. "The average price in the mid-1990s was between $20 and $30. Prices were lower last year, but we now have a new set of fundamentals on the table." Another trader added: "We have a market that has no inventories. There is no alternate material and buyers are critically dependent on current production."