Franklin Lake Resources Cancels Xenolix Transaction.

Business Editors

SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)--Aug. 18, 2003

Father Gregory Ofiesh, President and CEO of Franklin Lake Resources, Inc. (OTCBB:FKLR), announces the cancellation of the transaction in which it acquired specified assets of Xenolix Technologies. Father Ofiesh said, "After thorough testing in our own laboratory, in the Xenolix facility at Winslow, Arizona, and in the lab of Johnson and Associates in Phoenix, the company has concluded that no precious metals of any significance can be extracted from the raw materials tested using the Xenolix technology."

Offer of Compromise Rejected

Prior to taking this action, Franklin Lake had notified Xenolix of its final decision as to the ineffectiveness of the technology and made two offers in compromise: (1) Franklin Lake would make available the return of the materials and equipment to Xenolix, or (2) Franklin Lake would keep the materials and equipment in exchange for 300,000 shares of free trading Franklin Lake stock, upon the completion of the filing of the 10-K, after which, a registration statement for all the Franklin Lake shares will be immediately filed. A reply from Austin Lett, president of Xenolix, however, stated that "this unilateral action by Franklin Lake is not acceptable."

Thereafter, Father Ofiesh said the board of directors of the company had determined that its fiduciary obligation to the shareholders required it to take this action. Franklin Lake has demanded the return of the certificate for 1,201,657 restricted shares of stock and the two warrants given to Xenolix in the transaction. It has also sent its transfer agent a stop notice with respect to the transfer of the shares represented by the certificate and informed Xenolix that it will not honor the warrants.

Franklin Lake Continues to Use Its Own Process

Father Ofiesh concluded by saying that Franklin Lake is continuing to enhance its own process for bulk sampling. He and Roger Graham, the company's chief technician, recently met with officials of the Nevada Bureau of Mining Regulation and Reclamation. The company has retained Allstate-Nevada Environmental Management, Inc., of Las Vegas, to file all necessary permit applications, and to deal with governmental authorities.

NOTE: This news release contains forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause the company's actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, volatility of market prices, stability of product demand, market competition, uniformity and consistency of minerals in the raw material, difficulty of stepping up the scale of operations from the laboratory to production, and other risks, including the existence of many unknowns inherent in exploring for precious metal.