Franconia Minerals Corporation

Franconia Minerals Corporation

April 24, 2007 12:27 ET

Whitebox Acquires Shares of Franconia Minerals

TORONTO, ONTARIO--(CCNMatthews - April 24, 2007) - Franconia Minerals Corporation -

As a result of a private placement of units, each consisting of one common share and one-half of a common share warrant, completed by Franconia Minerals Corporation (the "Issuer") on or about April 9, 2007, Andrew Redleaf and Whitebox Advisors LLC (collectively, "Whitebox") may be considered to have control or direction over an aggregate of 7,008,000 voting common shares of the Issuer ("Common Shares"), representing approximately 13.4% of the issued and outstanding Common Shares, based on a total of 52,354,000 Common Shares issued and outstanding (calculated by including the number of Common Shares that would be issued if all the warrants forming part of the units held by Whitebox were exercised and on the basis of publicly available information filed by the Issuer). All such Common Shares are beneficially owned by the Whitebox Entities (as defined below). The Whitebox Entities have also agreed to acquire 1,769,000 additional units in the Issuer (also consisting of a common share and one-half of a common share warrant). It is expected that such acquisition will be completed on or about April 27, 2007. As a result of that transaction, Whitebox may be considered to have control or direction over an additional 2,653,500 Common Shares, or an aggregate of 9,661,500 Common Shares, representing, in total, approximately 17.2% of the issued and outstanding Common Shares, based on a total of 56,238,500 Common Shares issued and outstanding calculated by including the number of Common Shares that would be issued if all the warrants forming part of the 1,769,000 additional units so purchased were exercised. These transactions did not, and will not, take place on any market. The Common Shares were, and are being, acquired in the ordinary course of business of the Whitebox Entities.

Whitebox expects to evaluate on an ongoing basis the Issuer's financial condition, business, operations and prospects, the market price of the Common Shares, conditions in the securities markets generally, general economic conditions and industry conditions and other factors. Depending on such review, and subject to the conditions below, Whitebox may make additional purchases or may sell or transfer Common Shares over which they may be considered to have control or direction from time to time in public or private transactions and/or may enter into privately negotiated derivative transactions with institutional counterparties to hedge the market risk of some or all of their positions in the Common Shares or other securities and/or may cause any of the Whitebox Entities to distribute in kind to their respective partners or shareholders, as the case may be, Common Shares or other securities. Any such transactions may be effected at any time or from time to time subject to applicable law.

Andrew Redleaf is the managing director and controlling shareholder of Whitebox Advisors LLC, which is the managing director of the general partners of each of the Whitebox Entities that directly own the Common Shares. As such, Whitebox may be considered to exercise control or direction over the Common Shares beneficially owned by Whitebox Convertible Arbitrage Partners LP, Whitebox Hedged High Yield Partners LP, Whitebox Intermarket Partners LP and Pandora Select Partners LP (collectively, the "Whitebox Entities"). Whitebox disclaims any beneficial ownership over such Common Shares, except to the extent of their pecuniary interest, if any, therein. The address of Mr. Redleaf and Whitebox Advisors LLC is 3033 Excelsior Boulevard, Suite 300, Minneapolis, MN 55416-4675.

A copy of the early warning report filed by Mr. Redleaf and Whitebox Advisors LLC in connection with these acquisitions may be obtained from Julie von Arx at 612-253-6012.

Contact Information

  • Whitebox
    Julie von Arx
    (612) 253-6012