Franconia Minerals Corporation
TSX : FRA

Franconia Minerals Corporation

March 25, 2008 12:16 ET

Franconia Minerals Corporation Adopts Shareholder Rights Plan

SPOKANE, WASHINGTON--(Marketwire - March 25, 2008) - Franconia Minerals Corporation ("Franconia") (TSX:FRA) announced today that its Board of Directors has adopted a shareholder rights plan (the "Rights Plan"). The Rights Plan is effective immediately, subject to ratification by shareholders at the 2008 annual general meeting, which is being held April 21, 2008. Upon ratification, the Rights Plan will have a term of up to nine years, subject to re-ratification at the annual general meetings to be held in 2011 and 2014.

The objectives of the Rights Plan include providing shareholders with adequate time to properly assess the merits of any proposed take-over bid or similar transaction involving the shares of Franconia without undue pressure; encouraging the development of alternative transactions or competing take-over bids under such circumstances; and, giving the directors adequate time to fully consider any such take-over bid or similar transaction and any alternative transaction that may be proposed.

The Rights Plan takes the form of an agreement between the Company and CIBC Mellon Trust Company, as rights agent, dated as of March 24, 2008. Under the Rights Plan, one right (a "Right") was issued and becomes attached to each outstanding Common Share. A Right will also attach automatically to each Common Share issued thereafter, while the Rights Plan is in effect. The Rights will trigger (i.e., separate from the Common Shares) and become exercisable ten trading days after a person (an "Acquiring Person") has acquired 20% or more of, or commences or announces a take-over bid for, the Company's outstanding Common Shares other than by an acquisition pursuant to a Permitted Bid or a Competing Permitted Bid, as defined in the Rights Plan.

The acquisition by an Acquiring Person of 20% or more of the Common Shares is a "Flip-In Event". When a Flip-In Event occurs prior to the expiration of the Rights Plan, each Right shall constitute the right to purchase from Franconia, on payment of the Exercise Price of $100.00, a Common Share, subject to adjustments of the Exercise Price pursuant to the Rights Plan. In certain circumstances, the number of Common Shares that may be acquired for the Exercise Price may increase substantially. In these circumstances each Right will then entitle the holder, on payment of the Exercise Price, to purchase that number of Common Shares having an aggregate market value equal to twice the Exercise Price.

The potential for the issue of a substantial number of additional Common Shares at a price effectively half of their market value to all shareholders other than an Acquiring Person, is intended to encourage bidders to make a Permitted Bid or to obtain the redemption of the Rights or a waiver of the Rights Plan, thereby meeting the timing and other objectives of the Rights Plan referred to above. The circumstances in which the Rights can be redeemed or the Rights Plan can be waived are limited.

Prior to the rights being triggered, they will have no value and will have no dilutive effect on the Common Shares.

Investment advisors (acting in the ordinary course of their business), trust companies (acting in their capacities as trustees and administrators), statutory bodies whose business includes the management of funds, administrators of registered pension plans, and crown agents acquiring greater than 20% of the Common Shares are exempt from triggering a Flip-In Event, provided that they are not making, or are not part of a group making, a take-over bid.

Prior to separation, the Rights are evidenced by a legend stamped on the Common Share certificates and are not transferable separately from the Common Shares. From and after separation, the Rights will be evidenced by rights certificates and will be transferable separately from the Common Shares.

Following the Stock Acquisition Date and prior to the Separation Date, the Board may, in certain circumstances, waive the application of the Rights Plan to a particular flip-In Event (an "Exempt Acquisition"). The Board may also, at any time prior to occurrence of a Flip-in-Event and with shareholder approval, redeem all of the outstanding Rights at Cdn $0.00001 per Right. The Rights will deem to have been redeemed by the Board following completion of a Permitted Bid or Competing Permitted Bid.

North American institutional investors, such as pension plans, scrutinize shareholder rights plans to ensure that all shareholders receive equal treatment and provide the company sufficient time to consider alternatives to a particular bid. Franconia has considered and implemented these principles in the Rights Plan and does not expect concerns from institutional investor scrutiny.

Franconia confirmed that it has no knowledge of any proposed offer to acquire Franconia's shares or any other business combination transaction. The Board, upon the advice of a committee of independent directors, considers it prudent to adopt the Rights Plan to ensure that shareholders are treated fairly and are not subject to undue pressure to tender in the event of such a transaction.

A copy of the Rights Plan will be filed by Franconia with Canadian securities regulatory authorities and will be available under Franconia's profile at Http://www.sedar.com.

Franconia Minerals Corporation trades on the TSX under the symbol FRA. (For additional information see www.franconiaminerals.com). Franconia currently has 58,186,566 shares issued and outstanding.

FORWARD-LOOKING STATEMENT: Although Franconia Minerals Corporation believes many of its properties have promising potential, these 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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