Franconia Minerals Corp.

Published : January 15th, 2009

Receives Final Loan And Grant Payments From The State Of Minnesota For Birch Lake

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Keywords :   Copper | Dollar | Iron | Nickel |
Franconia Minerals Corp.
News Release

Thursday, January 15, 2009

Franconia Minerals Receives Final Loan And Grant Payments
From The State Of Minnesota For Birch Lake

January 15, 2009, Spokane, Washington: Franconia Minerals Corporation (TSX: FRA) ("Franconia" or the "Company") is pleased to report that it has received all funds from the State of Minnesota related to its 2006 loan agreement, providing the Company with a total of US$2.0 million in loans and US$500,000 in the form of a non-repayable grant.

According to the original terms of the 2006 loan agreement, the State -- through its two economic development entities, Iron Range Resources and the Department of Employment and Economic Development -- agreed to loan Franconia up to US$2.5 million towards the development of the Company's copper-nickel-PGM resource project at Birch Lake in the Duluth Complex of northeastern Minnesota (see Franconia press release of October 2, 2006). The Legislature changed the terms so that Franconia would become eligible to receive a loan of up to US$2.0 million in addition to a non-repayable grant of US$500,000.

The loan amortization date is the close of financing for the commercial mining operation at the Birch Lake site, or on December 31, 2011, whichever date comes first terms. Interest on the loan disbursements will accrue at the Prime Rate and be capitalized on the amortization date. Monthly payments of interest only, at Prime +3%, will be required for a two-year period commencing on the Amortization Date. Regular monthly payments of principal and interest payments will commence after the two-year period of interest payments and will be in an amount to fully amortize the outstanding balance of the loan by December 31, 2016 (the "Due Date"). Monthly payments will be adjusted semi-annually to reflect any change in the effective interest rate. All payments of principal and interest will be due on the Due Date. The borrowings under the 2006 loan agreement have been secured by one mineral lease held by the Company, guarantees by the Company and its joint venture partner, and intellectual property and data associated with the Birch Lake project.

Under the terms of the 2006 loan agreement, as amended, Franconia was required to contribute matching funds on a one-to-three basis. Thus, in order to draw down the full US$2.5 million dollars, Franconia had to expend at least US$10 million on a continuing technical development program aimed at advancing Birch Lake towards becoming a producing mine. To date, Franconia has spent more than US$15 million on this program. Franconia reached the US$10 million benchmark in October 2008 with the finalization of extensive drilling and other development work at Birch Lake (see Franconia press release of October 3, 2008).

Pursuant to the 2006 loan agreement, as amended, the Company has issued to the State of Minnesota, 2,500,000 common share purchase warrants (one warrant for each dollar advanced by the State of Minnesota under the loan and grant.) Each warrant entitles the State to acquire one common share of the Company at an exercise price of Cdn$0.75 until January 13, 2012. The terms of the warrants were amended from the original 2006 loan agreement to reduce the exercise price from Cdn$1.13 to Cdn$0.75; to change the expiry date from September 29, 2009 to three years from the drawdown date; and to include the funds advanced under the US$500,000.

Franconia Minerals Corporation trades on the TSX under the symbol FRA. (For additional information see Franconia currently has 59,017,572 shares issued and outstanding.

In the US: Douglas Sherk: 415 896 6820

In Toronto: Greg Taylor: 905 337 7673

In Vancouver: Farah Alibhai: 604 731 7340

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.


Franconia Minerals Corp.

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Franconia Min. is a exploration company based in United states of america.

Franconia Min. is listed in Canada and in United States of America. Its market capitalisation is CA$ 75.6 millions as of today (US$ 77.9 millions, € 56.1 millions).

Its stock quote reached its highest recent level on February 01, 2008 at CA$ 1.95, and its lowest recent point on March 06, 2009 at CA$ 0.10.

Franconia Min. has 86 954 000 shares outstanding.

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In the News and Medias of Franconia Minerals Corp.
7/5/2008Duluth Complex: A World-Class Value Play
Annual reports of Franconia Minerals Corp.
2006 Annual report
2007 Annual report
Project news of Franconia Minerals Corp.
5/12/2010(Birch Lake)Intercepts 124 Feet Of 0.67% Copper And 0.17% Nickel At Dulu...
5/4/2010(Birch Lake)Increases Ownership at Birch Lake to 70%
3/25/2010(Birch Lake)Options Land Parcels For Birch Lake
3/3/2010(Birch Lake)Begins New Drill Program At Its Birch Lake Project, Duluth ...
9/23/2009Announces 21% Increase In NI 43-101 Indicated Resource At Bi...
2/9/2009(Birch Lake)Summarizes Results Following Drilling & Bulk Sample Collecti...
1/15/2009(Birch Lake)Receives Final Loan And Grant Payments From The State Of Min...
8/25/2008(Birch Lake)Files Technical Report Supporting Latest Ni 43-101 Resource ...
7/9/2008(Birch Lake)Franconia Doubles NI 43-101 Resource Estimate On Birch Lake ...
6/20/2008(Birch Lake)Earns 60% Interest In Birch Lake Project
6/2/2008(Birch Lake)Second Drill Turning at Birch Lake
3/26/2008(Red Knoll)Launches New Drill Program at Red Knoll Copper Project, Ariz...
1/16/2008(Birch Lake) Intersects "Longest & Strongest" Mineralization To Date At ...
1/14/2008(Birch Lake)Reports "No Change in Water Quality" from Birch Lake Copper-...
Corporate news of Franconia Minerals Corp.
3/3/2011Shareholders Approve Arrangement With Duluth Metals
2/22/2011Announces that Institutional Shareholder Services and Glass ...
3/25/2008Adopts Shareholder Rights Plan
3/25/2008 Adopts Shareholder Rights Plan
3/24/2008 To Present At John Tumazos Very Independent Research, LLC M...
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