Franconia Minerals Corporation
TSX : FRA

Franconia Minerals Corporation

August 25, 2010 08:00 ET

Franconia Minerals Completes 2010 Drill Program at Birch Lake Copper-Nickel-PGM Deposit

Drill Hole Intersects 77 Feet of 1.63% Copper Equivalent; Results Verify Extension of Mineralized Zone

SPOKANE VALLEY, WASHINGTON--(Marketwire - Aug. 25, 2010) - Franconia Minerals Corporation ("Franconia") (TSX:FRA) today announced results from holes BL10-07 through BL 10-11 from the recently completed 2010 drilling program at the Birch Lake deposit in northern Minnesota (see table and map- latest results are shown in bold). All drill holes are located on the margin of the Birch Lake deposit and were stepped out approximately 500 feet from previous holes. The mineralized zone remains open in several directions.

"We are very pleased with the results from this year's drilling campaign. These results continue to verify and extend the mineralized zone to both the east and west of the central part of the resource as well as to the south," said Brian Gavin, President and CEO of Franconia. "We remain optimistic that this drill program will provide us with a sufficient Indicated Resources for mine planning purposes and, importantly, also demonstrates that our drilling still has not reached the margins of the mineralized zone. A new 43-101 compliant resource estimate is currently underway."

Drilling Update:

A total of 11 holes for 29,237.5 feet were drilled in 2010. The goal of the program was to provide sufficient drill data to enable the conversion of as much as possible of the previously delineated inferred resource to the indicated category and to add additional, newly defined inferred resources. This work is part of a pre-feasibility program at Birch Lake that includes ongoing metallurgical, geologic, environmental and waste characterization studies. The deposit, as defined in 2009 (see below), measures approximately 8,500ft by 3,310ft at an average thickness of 118ft (maximum thickness is 311ft).

The drill results also suggest that a significant mineralized trend in the central portion of the deposit has not been closed off at either end. Two additional similar trends in the southern portion of the deposit have also been identified. Another zone in the northern portion of the deposit, underlying Birch Lake, also remains open. Potential for continued expansion of the Birch Lake deposit is excellent, according to Mr. Gavin.

This latest drilling is designed to follow on from the resource estimate completed in 2009 at Birch Lake. In that study, Scott Wilson Roscoe Postle Associates (Scott Wilson RPA) estimates an Indicated Resource* of 131.2 million tonnes, plus an Inferred Resource of 37.5 million tonnes for the Birch Lake deposit. This represented a 21% increase in the amount of Indicated Resource from the previous estimates (see tables). Independent reports prepared to NI 43-101 standards by Scott Wilson RPA are available at www.SEDAR.com and www.franconiaminerals.com.

Structural Geology Site Visit

Warren Pratt Ph.D, of Specialized Geological Mapping Limited, made a brief site visit to the project in July. The primary objective was to determine potential structural controls on ore development and to identify faults that might offset the ore zone and consider potential engineering problems. The results of this study were encouraging. Quoting from the executive summary:

"Brief fieldwork and examination of the most 'fractured' core, selected by Franconia geologists, demonstrate that the project has relatively simple structural geology. The host rocks to mineralization are mostly massive, non-foliated and only weakly fractured. Fractures tend to be sinuous and serpentine-coated, which may cause minor spalling in underground openings. Compared with similar hard-rock projects, through-going faults are rare and do not seem to present significant engineering or hydrogeological problems."

Copper Equivalent is based on US metal prices of: copper - $2.25/lb; nickel - $7.50/lb; cobalt - $20.00/lb; gold - $950/oz; platinum - $1,300/oz; and, palladium - $350/oz. The methodology with metallurgical recoveries, refining costs and other charges are also being considered for all metals in accordance with the Net Smelter Return Factors contained in the May 29, 2009 NI 43-101 Resource Estimate produced by Scott Wilson RPA (see below).

Results of the 2010 Drill Program, Birch Lake, Minnesota
Drill Hole From (ft) To (ft) Down Hole Interval* (ft) Copper (%) Nickel (%) Platinum (g/t) Palladium (g/t) Gold (g/t) Copper Equivalent (%)**
BL10-1 2613.7 2737.5 123.8 0.67 0.17 0.37 0.79 0.17 1.56
incl. 2618.0 2645.9 27.9 0.95 0.27 0.57 1.25 0.31 2.34
BL10-2 1569.4 1703.7 134.3 0.52 0.18 0.12 0.26 0.06 1.14
incl. 1595.2 1618.1 22.9 0.71 0.22 0.10 0.25 0.07 1.41
BL10-3 1985.8 2047.0 61.2 0.68 0.23 0.15 0.27 0.07 1.45
incl. 2001.3 2025.9 24.6 0.77 0.27 0.18 0.31 0.07 1.65
BL10-4 2634.7 2877.4 242.7 0.59 0.21 0.120 0.272 0.066 1.28
Includes 2638.3 2801.5 163.2 0.68 0.19 0.157 0.342 0.086 1.35
  includes 2651.0 2682.4 31.4 0.94 0.25 0.195 0.497 0.125 1.83
Includes 2844.0 2872.4 28.4 0.93 0.64 0.061 0.215 0.037 2.70
  includes 2851.8 2869.9 18.1 1.27 0.79 0.077 0.269 0.044 3.45
BL10-5 2608.4 2659.0 50.6 0.41 0.16 0.309 0.479 0.257 1.16
includes 2632.3 2659.0 26.7 0.52 0.16 0.436 0.561 0.092 1.37
BL10-6 2452.8 2582.6 129.8 0.68 0.17 0.183 0.417 0.108 1.34
includes 2452.8 2517.0 64.2 0.86 0.22 0.256 0.559 0.140 1.74
  includes 2452.8 2482.5 29.7 0.93 0.24 0.296 0.638 0.161 1.89
BL10-7 2466.2 2568.7 102.5 0.47 0.12 0.147 0.307 0.080 0.96
incl. 2466.2 2515.6 49.4 0.72 0.17 0.241 0.493 0.126 1.45
BL10-7 2657 2731.7 74.7 0.53 0.14 0.187 0.411 0.111 1.11
BL10-8 1755.1 1855.1 100 0.57 0.20 0.096 0.189 0.053 1.20
incl. 1755.1 1818 62.9 0.65 0.25 0.092 0.232 0.066 1.40
  incl. 1755.1 1783.4 28.3 0.79 0.30 0.152 0.352 0.109 1.74
BL10-9 2818.6 2993.1 174.5 0.42 0.21 0.248 0.453 0.101 1.26
incl. 2818.6 2895.7 77.1 0.62 0.18 0.480 0.858 0.186 1.63
  incl. 2969.7 2993.1 23.4 0.47 0.68 0.035 0.105 0.033 2.36
BL10-10 2366.1 2420 53.9 0.34 0.13 0.044 0.111 0.027 0.73
BL10-11 2590.2 2742.5 152.3 0.52 0.14 0.345 0.658 0.157 1.29
* True thickness is estimated to be approximately 90% of the down hole interval
** Copper equivalent (CuEq%) = Cu% + 2.42 x Ni% + 3.09 x Co% + 0.25 x Au g/t + 0.71 x Pt g/t + 0.17 x Pd g/t Based on metal prices and expected process recovery.
 
 
MINERAL RESOURCES ESTIMATED AT $20 NSR CUT-OFF GRADE AS OF MAY 29, 2009
Franconia Minerals Corporation, Birch Lake Property, Minnesota
 
  Indicated Resources1,3,6,7  
Cut-off Tonnes5 Cu Ni Co Pt Pd Au CuEq4 NSR
NSR8 (000's) % % % g/t g/t g/t % US$
$20 131,213 0.561 0.175 0.010 0.263 0.569 0.127 1.332 51
                   
  Inferred Resources1,3,6,7  
Cut-off Tonnes5 Cu Ni Co Pt Pd Au CuEq4 NSR
NSR8 (000's) % % % g/t g/t g/t % US$
$20 37,471 0.546 0.166 0.009 0.227 0.495 0.112 1.251 47
   
1. CIM definitions were followed for Mineral Resource estimation and classification.
2. Mineral Resources are estimated for the deposit as defined and wireframed based on Cu:Pd, Ni:Pt ratios, mineral occurrence and other lithologic and stratigraphic factors.
3. Mineral Resources were estimated using average long-term metal US$ prices of $7.50/lb nickel, $2.25/lb copper, $20/lb cobalt, $1,300/oz platinum, $350/oz palladium and $950/oz gold.
4. Copper equivalent (CuEq%) = Cu% + 2.42 x Ni% + 3.09 x Co% + 0.25 x Au g/t + 0.71 x Pt g/t + 0.17 x Pd g/t based on metal prices and expected process recovery.
5. Bulk density is 3.07 t/m3 as averaged from specific gravity testing.
6. Co, Au, Pt, Pd grades, that are lacking in historic drill holes, have been entered in the resource database based on regression of assay grades from Franconia drill hole assays.
7. Resources are estimated from approximately 336 m depth to approximately 830 m depth.
8. NSR=$43.76 x Cu% + $108.94 x Ni% + $134.00 x Co%+ $11.02 x Au g/t + $30.70 x Pt g/t +$7.51 x Pd g/t - $8.00 (treatment)
9. Scott Wilson RPA recommends reporting resources for the $20 NSR cut-off.

(*An indicated mineral resource is a portion of a mineral resource for which quantity, grade, and other characteristics can be estimated with a level of confidence sufficient to support mine planning and additional economic evaluation of the project. The Birch Lake deposit is currently classified as an inferred resource, which is that part of a mineral resource for which certain characteristics can be estimated based on geological evidence and limited sampling and which can be reasonably assumed to have a consistent grade of mineralization.) 

Core samples were prepared at the ALS Chemex Ltd. Laboratories in Thunder Bay and then shipped to its analytical facilities in Vancouver. Samples were analyzed for gold, platinum and palladium using a standard fire assay with an ICP finish, as well as for 34 base metals and trace elements using a four-acid (near-total) digestion and a combination of ICPMS and ICPAES. ICP over-limits were reanalyzed using sodium peroxide fusion and acid dissolution followed by ICPAES.

Franconia Minerals Corporation (TSX:FRA): Franconia is currently focused on the development of the Duluth Complex copper-nickel-platinum-palladium project - consisting of the Birch Lake, Maturi and Spruce Road deposits - in this highly prospective region of northeastern Minnesota. The latest NI 43-101 report estimates an Indicated Resource of 131.2 million tonnes, plus an Inferred Resource of 37.5 million tonnes for the Birch Lake deposit (see news release dated September 23, 2009). Underground mining at Birch Lake will minimize the surface impact of the operation. Also, storage of mine wastes underground would further minimize the surface impact. Additional resources at the Birch Lake project include Inferred Resources at the Maturi deposit (see news release of September 6, 2006) and at the Spruce Road deposit (see news release of December 3, 2007). Independent reports prepared to NI 43-101 standards by Scott Wilson RPA are available at www.SEDAR.com and www.franconiaminerals.com.

Caution Concerning Forward-Looking Statements:

This news release contains certain forward-looking statements and information. The forward-looking statements and information express, as at the date of this press release, the Corporation's plans, estimates, forecasts, projections, expectations or beliefs as to future events and results. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by us, are inherently subject to significant business, economic and competitive uncertainties and contingencies and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, our lack of operating cash flow and dependence on external financing; availability of financing, as and when required to increase our interest in the mineral properties held in the Duluth Complex Project, and to finance our day-to-day operations and planned growth and development; any decline in the prices of platinum group metals, copper, and nickel; discrepancies between actual and estimated mineral resources; operational and development risk; the speculative nature of mineral exploration; regulatory risks, environmental risks and hazards, uncertainty as to calculation of mineral resources and other risks. Although Franconia Minerals Corporation believes many of its properties have promising potential, these properties are in the early stages of exploration and none have yet been shown to contain proven or probable mineral reserves. There can be no assurance that such reserves will be identified on any property, or that, if identified, any mineralization may be economically extracted.

Readers should not place undue reliance on forward-looking statements or information. The Corporation undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. See the Corporation's annual information form for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information. All forward-looking statements and information made in this news release are qualified by this cautionary statement.

To view the map associated with this release, please visit the following link: http://media3.marketwire.com/docs/FRAmap825.pdf.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by management.

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