Franconia Minerals Corporation

Franconia Minerals Corporation

June 27, 2005 10:30 ET

Franconia Signs Agreement on Arizona Copper Target

SPOKANE, WASHINGTON--(CCNMatthews - June 27, 2005) - FRANCONIA MINERALS CORPORATION (TSX VENTURE:FRA)(OFEX:FRA) is pleased to announce that it has signed a Property Acquisition Agreement with Teck Cominco American Incorporated (Teck Cominco) regarding the 8,000 acre Red Knoll property in Graham County, Arizona. The Red Knoll area encompasses an area of favorable geology between the Morenci mine, the largest copper producer in the US, and the Safford district.

The Red Knoll property is adjacent to and northeast of the porphyry copper deposits of Phelps Dodge in the Safford District. The target is concealed porphyry-style copper mineralization buried beneath post-mineral volcanic cover. The property is located on the northeast-trending structural zone thought to control mineralization at the Safford district. The property also lies on a regional northeast-trending magnetic low connecting the Safford and Morenci camps. A geophysical program of magneto-telluric soundings followed by reconnaissance IP is planned. A drilling program will follow, contingent upon favorable results from the geophysical surveys.

Under the terms of the Agreement, Franconia will earn a 100% interest in Teck Cominco's unpatented mining claims by spending US$2,000,000 over four years on exploration. The Agreement calls for a minimum expenditure of US$200,000 by Franconia in the first year. In addition, Franconia will reimburse Teck Cominco for land holding costs in 2004 and issue shares to Teck Cominco (see below). Following the issuance of shares on execution of the agreement, Teck Cominco will hold 425,000 shares in Franconia.

Upon Franconia completing US$2,000,000 in expenditures on the property, Teck Cominco will have a one-time option to elect to back-in to a 70% interest in the Red Knoll property by spending US$5,000,000. If Teck Cominco does not exercise its back-in right, it will have no further rights to the property except for a 2% NSR royalty. Franconia will have the right to reduce the royalty to 1% by paying Teck Cominco US$1,500,000.

According to the Agreement and subject to TSX-V approval, on execution of this agreement Franconia will issue to Teck Cominco 150,000 units of Franconia at a price of Cdn$0.40 per unit. Each unit will consist of one common share of the Corporation and one-half of one common share purchase warrant. Each whole warrant entitles the holder thereof to purchase one common share at a price of Cdn$0.60 at any time prior to 5:00 p.m. Toronto time on the earlier of: a) 15 trading days after receiving notice from the Corporation that the weighted average price of the Common Shares has been equal to or greater than Cdn$0.70 for a period of 15 consecutive trading days; or b) two years from the date of issue of the units. Franconia will also issue an additional 100,000 units to Teck Cominco on each anniversary date during the term of the option.

Franconia Minerals Corporation trades on both the TSX-V in Canada and OFEX in the UK under the symbol FRA. Franconia's property portfolio consists of the Birch Lake PGM property in the Duluth Complex of Minnesota; the San Francisco high-grade zinc property (up to 55 ft of 19% zinc in previous drilling) in Utah and the Mahoney high-grade zinc property in New Mexico. (For additional information see

The directors of Franconia Minerals Corporation accept responsibility for this announcement. Franconia presently has 22,459,903 shares issued and outstanding.

On behalf of the Board of Directors,


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 authorized 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. Incorporated in Alberta Canada No. 207953670


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