Franconia Minerals Corporation
TSX VENTURE : FRA
OFEX : FRA

Franconia Minerals Corporation

October 19, 2005 10:30 ET

Franconia Minerals Corporation: Positive Independent Preliminary Economic Assessment Of Birch Lake Copper-Nickel-PGM Project

SPOKANE, WASHINGTON--(CCNMatthews - Oct. 19, 2005) - Franconia Minerals Corporation (TSX VENTURE:FRA)(OFEX:FRA) is pleased to announce the completion of an independent updated resource estimate and preliminary economic assessment of the Birch Lake copper-nickel-PGM (platinum group metals) inferred resource located in the Duluth Complex of Minnesota.

The economic assessment was prepared by Mr. Ross Glanville, P.Eng., MBA, an independent qualified person as defined by National Instrument 43-101, and is based in part on an updated resource estimate done by E. K. Lehmann in July 2005, and audited by Roscoe Postle Associates to NI 43-101 standards; metallurgical studies conducted by SGS Lakefield in 2005; and processing costs developed in 2005 by EHA Engineering. A supporting Technical Report, prepared by Roscoe Postle Associates to NI 43-101 standards, will be filed and made available on SEDAR within 30 days. (All amounts are expressed in U.S. dollars, unless otherwise indicated.)

The scenario considered in the economic assessment includes:

- Development of 43 million short ton resource containing recoverable copper, nickel, cobalt, gold, platinum and palladium with an average net smelter return (NSR) value of $32.45/short ton.

- Underground room and pillar mining, flotation concentration and hydrometallurgical recovery with an annual production of 22 million lbs copper, 5.0 million lbs nickel, 124,000 lbs cobalt, 4,950 oz gold, 19,800 oz platinum and 37,950 oz palladium over a 22-year mine life.

- Pre-production capital of $178 million.

- Average operating cost of $23.48/short ton.

- Cash flow projections (after tax and royalties) show the following range of Net Present Value (NPV) associated with the project at various discount rates:



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Net Present Value (after tax)
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Discount Rate 6% 8% 10%
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Base Case Metal Prices: $67 million $30 million ($5 million)
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Base Case +10% $109 million $62 million $30 million
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Base Case less 10% $24 million ($2 million) ($20 million)
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Base Case +20% $151 million $94 million $55 million
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Metal Prices 9/9/05 $208 million $137 million $89 million
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The economic assessment includes the use of Inferred Mineral Resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Therefore, there is no certainty that the results predicted by this economic assessment will be realized. All technical data have been reviewed by Brian Gavin, Franconia's president and an appropriately qualified person as defined by National Instrument 43-101.

As a result of the positive economic assessment, Glanville recommends that a 2300-2500 foot shaft be sunk for the purpose of extracting a bulk sample for pilot plant metallurgical testing and to facilitate test mining. Given the depth to mineralization (1500 to 2200 feet), sinking a shaft would be far more cost effective than collecting material for a bulk sample by drilling wide-diameter core.

Brian Gavin, Franconia's president, comments: "We are greatly encouraged by the positive assessment of the Birch Lake Project. The state of Minnesota is currently considering our application to sink the recommended prospect shaft. We plan to move towards a feasibility study as rapidly as possible. We are also eager to complete a further economic assessment based on a scenario in which the nearby Maturi copper-nickel-PGM resource and the Birch Lake resource would be mined concurrently and processed at a central plant." (Franconia's Maturi resource is described in detail in a news release dated September 7, 2005.)

Assumptions made in the Economic assessment:

Infrastructure:

The Birch Lake Project is accessible by road and is located about 11 kilometers east-northeast Babbitt, Minnesota. Due to the close proximity of the Minnesota Iron Range, infrastructure is very good with sources of water, electric power, mining labor and professionals, equipment suppliers and other services, and a well-developed road and rail transportation network linking the area to the port of Duluth on Lake Superior.



Metal Prices:

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Copper Nickel Cobalt Gold Platinum Palladium
per per per per per per
pound pound pound ounce ounce ounce
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Base Case $1.05 $5.00 $12.00 $410 $750 $225
Current prices
9/9/05 $1.74 $6.71 $16.75 $445 $912 $184
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Mineral Resource:

The Economic assessment is based on an inferred mineral resource estimated by E.K. Lehmann in 2005 (and reviewed by Roscoe Postle and Associates) using the Base Case metal prices quoted above, except cobalt for which $10 was used. With the exception of the new metallurgical data and price assumptions presented in this release the new estimate is based on the same drill hole data, key assumptions, parameters and methods as previously disclosed in a technical report (Review Of The Mineral Resources of the Birch Lake Property, Minnesota, by Richard E. Routledge, Roscoe Postle Associates) filed on www.sedar.com in August, 2004.



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NSR Gross Aver-
Cut metal age
Off/ Short Value/ NSR/ Plat- Pall-
Short tons short short Copper Nickel Cobalt Gold inum adium
ton (millions) ton ton (%) (%) (%) (g/t) (g/t) (g/t)
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$28.00 43.3 $61.68 $32.45 0.72 0.224 0.011 0.228 0.493 1.007
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Mining Method:

Room and pillar, shaft-accessed mine. A minimum mining thickness of 10 feet (25% dilution at an 8 foot minimum mining height; range of thickness is 10 to 127 feet, with an average of 79 feet). Production to commence in just over five years, and the mill throughput would increase to an annualized rate of 1.65 million short tons over the subsequent two years. Some 36.8 million short tons (or just under 85% of the resource) will be extracted and processed over a 22 year period. Mining recovery is based on an initial 65%, with an additional 20% in later pillar recovery.

Metal Recovery:

A concentrate would be produced by flotation methods processing 5,000 tpd. Metals would be recovered from the concentrate using the Platsol hydrometallurgical method (high temperature, high pressure oxidation leach) to produce cathode copper, a nickel-cobalt hydroxide sludge and a precious metals precipitate suitable for further refining (see Forward Looking Statement). Assumed recoveries are shown in the table:



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Metal Recovery and Annual Production
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Copper Nickel Cobalt Gold Platinum Palladium
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Mill Recoveries: 97.0% 70.0% 42.0% 90.0% 90.0% 90.0%
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Hydromet Recoveries: 95.3% 95.7% 95.7% 44.5% 90.5% 85.5%
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Overall Recoveries: 92.4% 67.0% 40.2% 40.0% 81.5% 76.9%
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Annual production
at 1.65 m short
tons/yr 22.0 m 5.0 m 124,000 4,950 19,800 37,950
lbs. lbs. lbs. oz. oz. oz.
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Capital costs:

In addition to local roads serving the local iron mining industry, about 3,000 feet of existing road would be upgraded, and 2,000 feet of new road would be built. A 2300 to 2500 foot prospect shaft is recommended. A subsequent production shaft would be developed in the same area. The surface plant to process 5,000 tpd would be located within one mile of the shaft area. Existing power lines are within about three miles of the proposed plant and shaft sites. Water requirements can be met on site. Tailings disposal areas would be located within one mile of the surface plant.



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Capital Cost Components Estimated Capital Costs
$
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Land Purchase 700,000
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Preproduction Bulk sampling,
Permitting & Feasibility 17,450,000
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Mine Development and equipment 31,000,000
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Metallurgical plant, waste handling,
process license 128,980,000
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Total Estimated Capital Costs: $178,130,000
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Operating Costs:

Glanville has utilized the following operating cost estimates in the Preliminary Assessment:



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Operating Cost Components Estimated Operating Costs
$/short ton
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Exploration and Development 1.35
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Direct Mining 5.50
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Processing 15.13
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General & Administrative Costs: 1.50
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Total Estimated Operating Costs: $23.48
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Franconia Minerals Corporation trades on both the TSX-V in Canada and OFEX in the UK under the symbol FRA. (For additional information see www.franconiaminerals.com.) The directors of Franconia Minerals Corporation accept responsibility for this announcement. Franconia presently has 22,464,923 shares issued and outstanding.

FRANCONIA MINERALS CORPORATION

Brian Gavin

President

This document, which has been issued by Franconia Minerals Corporation (Franconia), has been approved solely for the purposes of Section 21 of the Financial Services and Markets Act 2000, by Lion Capital Corporation Limited (Lion), 4th Floor, 2 Cromwell Place, London SW7 2JE, who is authorised to carry on Investment Business by the Financial Services Authority. Lion, is acting as advisers for Franconia and to no-one else and will not be responsible to anyone other than Franconia for providing protections afforded to customers of Lion for providing advice in relation to any investment made pursuant to this announcement and makes no recommendation for the suitability of any investment, which is the subject of this announcement. 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. The Platsol process is not currently in commercial use. Estimates of metal recovery and costs associated with this process have been made based on bench scale tests, publicly available information and comparison to similar processes currently in commercial use. There can be no guarantee that these metal recoveries and costs will be achieved in any eventual commercial operation. Incorporated in Alberta Canada No. 207953670

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

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