Franconia Minerals Corporation
TSX : FRA

Franconia Minerals Corporation

December 09, 2010 07:00 ET

Franconia Minerals Closes on $1 Million Credit Facility

SPOKANE VALLEY, WASHINGTON--(Marketwire - Dec. 9, 2010) - Franconia Minerals Corporation ("Franconia" or the "Company") (TSX:FRA) announces that it has received a single advance loan of Cdn$1 million (the "Loan") from a private lender for working capital and other general corporate purposes. In accordance with its terms, the full principal amount of the Loan was drawn down on December 3rd, 2010.

The Loan is secured, bears interest at a rate of 15% per annum, compounds and is payable monthly and is due on December 2, 2011. The Loan may be prepaid at Franconia's election in whole or in part at any time. In addition, the lender may demand repayment upon the occurrence of certain events. As consideration for advancing the Loan, the lender was paid a set up fee and a cash commission and is entitled to a bonus payment upon prepayment or repayment of the Loan.

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. 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.

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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