Franconia Finalizes US$2.5 Million Loan From State of Minnesota for Birch Lake

Under the terms of the loan, the State - through its two economic development entities, Iron Range Resources and the Department of Employment and Economic Development - will first lend US$0.2 million for work to be completed in 2006. Franconia will contribute matching funds of US$0.6 million for the same period. Further State funding of US$2.3 million will be matched against $6.9 million from Franconia for work to be completed late in 2007 or the first quarter of 2008.

In addition to the previously announced cash repayment terms, Franconia will issue the lender warrants to purchase one share of common stock of Franconia for each dollar advanced by the lender under the terms of the loan, at an exercise price equal to 120% of the weighted average price of the stock during the last full calendar month immediately preceding the effective date of the loan agreement. The warrants will have a term of three years.

Franconia Minerals Corporation trades on both the TSX VENTURE in Canada and OFEX in the UK under the symbol FRA. The directors of Franconia Minerals Corporation accept responsibility for this announcement. Franconia presently has 38,966,138 shares issued and outstanding. (For additional information see www.franconiaminerals.com.)

Brian Gavin,
President
Franconia Minerals Corporation

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. Incorporated in Alberta Canada No. 207953670

Email: cbird@lionmining.com