Franconia Minerals Corporation
TSX : FRA

Franconia Minerals Corporation

December 23, 2010 10:26 ET

Franconia Minerals Announces Closing of $2,500,000 Private Placement

SPOKANE VALLEY, WASHINGTON--(Marketwire - Dec. 23, 2010) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Franconia Minerals Corporation ("Franconia" or the "Company") (TSX:FRA) is pleased to announce that it has closed the previously announced non-brokered private placement with Duluth Metals Limited ("Duluth"). Duluth and Franconia entered into a subscription agreement on December 20, 2010 pursuant to which Duluth subscribed for 3,906,250 common shares in the capital of Franconia (the "Common Shares") representing approximately 5.3% of Franconia's outstanding Common Shares at a price of $0.64 per share, for total gross proceeds to Franconia of $2,500,000, of which $1,000,000 was provided to Duluth by Antofagasta PLC. The proceeds of the private placement will be used to fund a land purchase option with Minnesota Power, as well as for general working capital purposes.

The subscription agreement was entered into in connection with the entering into of an arrangement agreement between Franconia and Duluth (the "Arrangement Agreement") whereby Duluth will acquire 100% of the outstanding Common Shares by way of a plan of arrangement under the Business Corporations Act (Alberta) (the "Transaction"). The details of the Transaction are set forth in the Arrangement Agreement and are described in the joint press release of Duluth and Franconia dated December 20, 2010.

The Company has received approval from the Toronto Stock Exchange for the listing of the Common Shares sold and issued under the private placement, subject to satisfying certain customary conditions. The Common Shares are subject to a trading restriction of four months from the date of issuance.

The Common Shares have not, nor will they be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

About Franconia Minerals

Franconia Minerals Corporation 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. 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 Company'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 the Company 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 Company 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 Company'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.

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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