Franconia Earns 60% Interest in Birch Lake Project

SPOKANE, WA - Franconia Minerals reported that its 60% interest in the Birch Lake copper-nickel-PGM (platinum group metals) project in the Duluth Complex of Minnesota has vested and the Company has signed a joint venture agreement with the underlying property owners, through its wholly owned subsidiary, Franconia Minerals Corporation (US) Inc.
In accordance with the terms of the Birch Lake Option Agreement, signed in 2002 with the Beaver Bay Joint Venture (BBJV), Franconia has reached this milestone by spending US$10 million in exploration on the property, and by paying US$3.25 million in cash and US$1.25 million in Franconia's common shares to the BBJV (731,006 common shares were issued based on the previous month's average closing share price of Cdn$1.71). Franconia will continue as the project operator and will also take over primary responsibility for managing the approximately 15,000 acres of lands held in the project. Mr. Ernest K. Lehmann, a founder, and director of Franconia, owns a controlling interest in North Central Mineral Ventures Inc., which in turn owns 70% of BBJV.
"We are very pleased to have reached this important milestone in our ongoing ownership in and development of Birch Lake and we are aggressively working towards our next target of a 70% interest later this year," said Brian Gavin, President and CEO.
The newly signed joint venture agreement replaces the original option agreement and allows Franconia to advance its ownership interest in the project to 70% by spending an additional US$10 million on exploration and acquisition at Birch Lake and making an additional cash payment of US$1 million to BBJV.
Additionally, Franconia may further earn up to an 82% interest in the project by funding BBJV's portion of development costs of a mine to commercial production. Franconia will recoup these costs from BBJV's share of proceeds from production.
The company's address is  111 E. Magnesium Road, Suite A, Spokane, WA 99208, (509) 340.1328, fax: (509) 696.9680, email: [email protected].