Adriana Resources Inc.

Adriana Resources Inc.

February 08, 2010 12:11 ET

Adriana Announces Second Flow-Through Private Placement Closing and 2010 Program to Increase and Upgrade Resources at Its Lac Otelnuk Property in Quebec

TORONTO, ONTARIO--(Marketwire - Feb. 8, 2010) - Adriana Resources Inc. ("Adriana" or the "Company") - (TSX VENTURE:ADI) announces that it has closed the second tranche of a non-brokered structured private placement by issuing 4,270,000 flow-through common shares at $0.89 per share (the "Second Closing") for gross proceeds of $3.8 million. All securities issued under the Second Closing will be subject to a four-month hold period expiring on June 6, 2010. The Company has raised aggregate gross proceeds from both tranches of the private placement of approximately $5 million. Finder's fees totaling $250,090 are payable by the Company to certain third parties in respect of both tranches of the private placement.

Adriana is currently focused on the advancement of its Lac Otelnuk iron ore deposit located in the Labrador Trough, Nunavik Quebec (the "Otelnuk Property"). The Otelnuk Property is a Lake Superior-type surface exposed iron formation, or taconite, identified over a strike length of approximately 25 kilometers.

The Otelnuk Property was first recognized and mapped in 1948. Diamond drilling, geological and geophysical mapping and certain metallurgical studies were completed on behalf of King Resources Company ("King Resources") in the 1970s. Metals, Petroleum & Hydraulic Resources Consulting Limited ("MPH") managed the field work, metallurgical testwork, "mineral resources" estimates and economic studies which were carried out between 1970 and 1977 on the North Zone and the South Zone of the Otelnuk Property.

In 2007 and 2008, the Company completed a drilling program on a rectangular area of 9.0 kilometers long by 2.5 kilometers wide of the South Zone of the Otelnuk Property. The zone is open along strike to the northwest and southeast and down dip to the northeast where it dips gently under overlying cap rock. The program was designed to test the entire stratigraphy of the drilled zone. In 2009, a National Instrument 43-101 ("NI 43-101") compliant Technical Report and Mineral Resource Estimate was issued on behalf of the Company by Watts, Griffis and McOuat (the "NI 43-101 Report") pursuant to which mineral resource estimates totalling 6.26 billion tonnes were defined only for the South Zone of which 4.97 billion tonnes are indicated resources and 1.97 billion tonnes are inferred resources as follows:

Resource Classification for the South Zone of the Otelnuk Property (cutoff of 18% DTWR) Tonnes (in billions) %TFe Head DTWR % %  SiO2 %TFe DTC
Indicated 4.29 29.08 27.26 3.53 68.00
Inferred 1.97 29.24 26.55 3.51 68.12

A copy of the NI 43-101 Report was filed on SEDAR on May 7, 2009 and is available under the Company's SEDAR profile at The NI 43-101 Report is subject to the assumptions and conditions set out therein. Mr. Frank Condon, P.Eng., a director of the Company and also a Qualified Person as defined in NI 43-101, has reviewed and approved the disclosure relating to the South Zone of the Otelnuk Property and the NI 43-101 Report contained in this news release.

The North Zone of the Otelnuk Property, where drilling in the 1970s on behalf of King Resources outlined the presence of a significant iron formation similar to that of the South Zone, has not yet been drill tested by the Company. Between 1970 and 1973, 31 vertical diamond drillholes aggregating 1,349 meters were drilled in the North Zone. This drilling mainly tested only one of three contiguous cherty-banded magnetite units. By comparison, drilling by Adriana in the South Zone of the Otelnuk Property was designed to test all three stratigraphic units of the South Zone.

In 1975, mineral resource estimates for the North Zone of the Otelnuk Property were prepared by three representatives of MPH, including Mr. G.A. Tremblay, P. Eng. Mr. G.A. Tremblay is currently a consultant to the Company. These historical resource estimates total approximately 6.3 billion tonnes as follows:

Historical Resource Estimates for the North Zone of the Otelnuk Property Tonnes (in billions) % Mag Fe % TFe
Selected Magnetite IF 0.613 25.08 33.92
Other Magnetite IF 0.317 25.00 34.00
Jasper Hematite-Magnetite IF 2.165 14.00 27.00
Banded Cherty Magnetite IF 3.223 15.00 26.55
Total 6.318 16.00 30.00

All historical assay and testwork was done at Lakefield Research of Canada Limited ("Lakefield") in Lakefield, Ontario. In addition, pilot plant test work done in 1977 at Lakefield on a 21-ton bulk sample collected from the upper units of the North Zone, indicated that the iron formation is amenable to conventional magnetic separation technology, yielding a good concentrate of 68.5% iron with a silica content of 3.5%, suitable for pelletizing.

The historical resource estimates referred to in this press release are based on work completed by MPH for King Resources and have not been confirmed in accordance with the standards in NI 43-101. The Company has presented the historical resource estimates because the Company considers them to be relevant and of historic significance. The Company is not treating the historical resource estimates as a defined current resource verified by a Qualified Person under NI 43-101 and these historical resource estimates should not be relied upon.

Mr. G.A. Tremblay, P.Eng., a consultant to the Company and also a Qualified Person as defined in NI 43-101, has reviewed and approved the disclosure relating to the North Zone of the Otelnuk Property contained in this news release.

Proceeds from the private placement will be used by the Company to fund its exploration program in 2010 to increase and upgrade mineral resources on the Otelnuk Property. The Company plans to complete a diamond drilling program on the North Zone designed to test the entire stratigraphy of the drilled zone and define an NI 43-101 compliant mineral resource estimate. The Company also plans further diamond drilling on the South Zone to upgrade a portion of the indicated mineral resources contained in the NI 43-101 Report in respect of the South Zone to measured mineral resources. As part of its 2010 Otelnuk Property program, the Company also plans to complete certain geo-metallurgical sampling and testing.


Allen J. Palmiere, President and CEO

Certain information regarding the Company, including the Company's plans to increase and upgrade mineral resources and management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties. Without limitation, statements relating to potential mineralization and resources, exploration results, mining and development, future plans and objectives of the Company and imprecision of mineral resources estimates, are forward-looking statements that involve various degrees of risk. 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, changes in the world wide price of mineral commodities and currency fluctuations, general market conditions, the uncertainty of future profitability and access to sufficient capital, risks inherent in mineral exploration, development, construction and mining operations, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, environmental risks, access to labour and services and competition from other companies. 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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