Adriana Resources Inc.

Adriana Resources Inc.

April 14, 2011 18:02 ET

Adriana Announces Positive Preliminary Economic Assessment on Lac Otelnuk Iron Ore Project (Revised)

TORONTO, ONTARIO--(Marketwire - April 14, 2011) - Adriana Resources Inc. ("Adriana" or the "Company") – (TSX VENTURE:ADI) is pleased to announce that it has received positive results from a Preliminary Economic Assessment ("PEA"), for a 50 million tonne per annum operation on the Lac Otelnuk Iron Ore Project located in Nunavik, Quebec. The PEA was completed by Met-Chem Canada Inc. ("Met-Chem") using Watts, Griffis and McOuat Limited's ("WGM") Mineral Resource estimate, previously released in a Technical Report dated May 7, 2009. The National Instrument ("NI") 43-101 Technical Report on the Preliminary Economic Assessment will be available under the Company's SEDAR profile at and has an effective date of April 8, 2011.

The key parameters and results of the study are as follows:

Iron Price:US$100 per tonne of Pellets FOB Sept-Îles, approximately equivalent to a spot price of concentrate FOB Sept-Îles of $80 per tonne
Discount rate:8%
Annual Production:50 million tonnes per year of pellets at a grade of about 67.5% Iron.
Net Present Value:$15.2 billion
Internal Rate of Return: 20%

The project as contemplated includes mining and concentrating an average of 175 million tonnes of iron mineralization per year, pelletizing 50 million tonnes of concentrate, constructing an 815 kilometer railway and constructing 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 $0.6 billion. The railway right of way will run through the Province of Quebec and will be the subject of a negotiation with the Government of Quebec. The mine life based on the WGM Mineral Resource Estimate is approximately 34 years and the projected cash cost per tonne of pellets FOB port is approximately $32 per tonne potentially making this a low cost producer. The project will be subject to the normal environmental and permitting process as dictated by the jurisdictions within which the project is located. The studies and permit application process will commence with the planned feasibility study.

As announced January 17, 2011, Adriana has entered into a Binding Framework Agreement with WISCO International Resources Development & Investment Limited "WISCO" with respect of an investment into Adriana and an investment into the Lac Otelnuk Project. The investment into Adriana was completed in March (see press release dated March 23, 2011) and negotiations are ongoing with respect of the investment into the Project. Subject to the closing of a definitive agreement for the investment in the Project, a definitive feasibility study is planned to commence during 2011.

Allen J. Palmiere, CEO of Adriana stated "We are encouraged by the robust economics demonstrated by the Preliminary Economic Assessment for the Lac Otelnuk Project. The possible combination of a strong strategic partner and robust economics provides the ability to realize upon the value represented by the largest iron ore deposit in Canada. Lac Otelnuk has the potential of being the largest mining project in Canadian history and the largest private investment in the history of Quebec. We are excited about the future and look forward to advancing the project."

Mineral resources that are not mineral reserves do not have demonstrated economic viability. The preliminary assessment includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.

"Mr. Andre Boilard, PMP, Eng, of Met-Chem Canada Inc., an independent Qualified Person ("QP") in accordance with NI 43-101 Standards of Disclosure for Mineral Projects and has reviewed and is responsible for the technical disclosure presented in this news release."


Allen J. Palmiere, President and CEO

Certain information regarding the Company, including the results of the Preliminary Economic Assessment and the completion of the definitive joint venture agreement with WISCO constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties. Certain important risk factors could cause the Company's actual results to differ materially from those expressed or implied by such forward-looking statements including, without limitation, completion of due diligence to the satisfaction of WISCO, approvals of the government of China, approval of the TSX-V, changes in the world wide price of mineral commodities and currency fluctuations, general market conditions, and the uncertainty of future profitability and access to sufficient capital. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and caution should be exercised on placing undue reliance on forward looking information.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

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