Franconia Minerals Corporation

Franconia Minerals Corporation

May 01, 2007 09:30 ET

Franconia Minerals Closes Non-Brokered Private Placement Financing

SPOKANE, WASHINGTON--(CCNMatthews - May 1, 2007) - FRANCONIA MINERALS CORPORATION (TSX VENTURE:FRA) (the "Corporation") has completed a non-brokered private placement financing of Cdn$6,000,000 through the issuance of 3,750,000 units at Cdn$1.60 per unit. This is additional to the brokered private placement of Cdn$11.7 million completed on April 13, 2007 and completes the current financing effort.

Each unit consisted of one common share and one-half common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share at an exercise price of Cdn$1.92 at any time prior to the earlier of: a) the date which is the 15th trading day after receiving notice from the Corporation that the weighted average price of the Common Shares on the TSX Venture Exchange or the Toronto Stock Exchange has been equal to or greater than Cdn$2.40 for a period of 15 consecutive trading days commencing on April 30, 2009; and b) April 30, 2010. The units will be subject to a 4 month and one day hold period expiring August 31, 2007.

The net proceeds from the offering will be used for the Corporation's continued work on the pre-feasibility study on the Maturi-Birch Lake combined operation, other exploration programs and for general corporate purposes. Brian Gavin, Franconia's president, comments: "This financing brings our cash reserve to approximately US$17 million (Cdn$19 million). Add to this warrants and options, currently in the money, and the line of credit from the State of Minnesota and we will have access to more than US$30 million (Cdn$33.3 million). This will carry us well into the feasibility study phase at the Maturi-Birch Lake project in northern Minnesota and allow us to meet our obligations for continued exploration on the Red Knoll Project under our exploration agreement with Teck Cominco American Ltd".

On a portion of the funds raised, The Corporation will pay a finder's fee in cash equal to 6% of that portion of the proceeds and issue warrants equal to 6% of that portion of the units issued. These warrants will have an exercise price of Cdn$1.92 and expire 24 months from the date of issue. The common shares underlying the warrants are subject to a 4 month and one day hold period expiring August 31, 2007.

Franconia Minerals Corporation trades on the TSX-V under the symbol FRA. (For additional information see Following the financing Franconia will have 54,683,731 shares issued and outstanding.

Brian Gavin, President

FORWARD-LOOKING STATEMENT: Although Franconia Minerals Corporation believes many of its properties have promising potential, its properties are in the early stages of exploration. 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.


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