IRON ORE STUDY: PEA for Lac Otelnuk looks positive

QUEBEC - Adriana Resources of Toronto has revised the preliminary economic assessment (PEA) for its Lac Otelnuk iron ore project in Nunavik and says the outlook is positive. The study, using a US$100 per tonne FOB Sept-Iles, examined an operation that would produce 50 million t/y of 67% Fe iron pellets. The project has a net present value of $15.2 billion and an internal rate of return of 20%.

The project as contemplated includes mining and concentrating an average of 175 million tonnes of iron mineralization per year, pelletizing the concentrate, building an 815-km railway through Quebec and the necessary port capacity to accommodate Chinamax ore carriers.

The total capital cost of the project is estimated to be $12.9 billion with the mine complex being $7.9 billion, the railway $2.7 billion and the port estimated to be $600 million. The mine life is approximately 34 years and the projected cash cost per tonne of pellets FOB port is approximately $32/tonne potentially making this a low cost producer, according to Adriana.

Adriana has entered into a binding framework agreement with Wisco International Resources Development and Investment of China with respect to an investment in Adriana and the Lac Otelnuk project.

More information is available at www.AdrianaResources.com.