Adriana Resources Inc.
Adriana Resources Inc. Adriana Resources Inc. Adriana Resources Inc. Adriana Resources Inc. Adriana Resources Inc.
Adriana Resources Inc.

Location: Labrador Trough - Nunavik, Québec, Canada
Mineral: Iron (Fe)
Property Size: 68,449 hectares
Project Status: Resource Definition
Current Project Activity: Work towards advancing to "Feasibility Stage"
Resource: 20.64 Billion Tonnes Indicated; 6.84 Billion Tonnes Inferred (see below)
Ownership: 40% ownership, 60% owned by WISCO

The Total Iron (Head Fe analysis), DTWR and Satmagan results (Head magnetic Fe) are shown in the table below:

CATEGORIZED MINERAL RESOURCE ESTIMATE FOR LAC OTELNUK PROJECT
(CUTOFF OF 18% DTWR)


Resource Classification Tonnes (in billions) TFe Head DTWR Magnetic Fe
Measured
16.21
29.3
25.8
17.8
Indicated
4.43
31.5
24.1
16.7
Total M&I
20.64
29.8
25.4
17.6
 
Inferred
6.84
29.8
26.3
17.8
Notes:
  1. Interpretation of the mineralized zones were created as 3D wireframes/solids based on logged geology and a nominal 10% DTWR when required.
  2. Mineral Resources were estimated using a block model with a block size of 50m x 50m x 5m.
  3. No grade capping was done.  Tonnages and grades reported above are undiluted.
  4. Assumed Fe concentrate price was US$110/dmt.
  5. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.  There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserves.  The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, socio-political, marketing, or other relevant issues;
  6. The quantity and grade of reported Inferred Mineral Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category;
  7. The Mineral Resources were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards for Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council December 11, 2005.

The Estimate was completed using an Inverse Distance to the power of one method with a block size of 50m x 50m x 5m high. In general, Measured Mineral Resources are defined as blocks being within 350 m of a drillhole intercept, Indicated Mineral Resources are defined as blocks from 350 m to 500 m from a drillhole intercept and Inferred Mineral Resources are defined as blocks more than 500 m distance from a drillhole intercept and interpolated out to a maximum of approximately 1,000 m where the drilling is more sparse, predominantly in the deeper parts of the deposit. This categorization was used specifically in the Main Zone area of the deposit. Mr. Michael W. Kociumbas, P.Geo., Vice-President of WGM, and Mr. Richard Risto, P.Geo., are independent Qualified Persons in accordance with NI 43- 101. Mr. Kociumbas has reviewed and is responsible for the Mineral Resources presented in this news release. WGM has previously visited the site, collected independent core samples and reviewed the QA/QC data received to date. Mr. Risto has reviewed and approved the underlying sampling, analytical and test data used for the Estimate.

In 2012, the Company drilled 157 BQ delineation holes totaling 18,508 meters to expand and upgrade the Mineral Resource. An additional 18 PQ holes totaling 1,957 meters were also drilled to obtain a 33 tonne bulk sample for metallurgical testing. Since 2007, Adriana and Lac Otelnuk Mining Ltd. have drilled a total of 392 diamond drill holes totaling 50,802 meters on the Lac Otelnuk property. The Lac Otelnuk iron formation is open along strike to the northwest and southeast. It subcrops at surface and dips gently (from 2 to 5 degrees) to the northeast, eventually plunging under sedimentary formations. The western extent is terminated by erosion. Due to the gentle north-easterly dip and westerly sloping terrain, much of the sedimentary rocks that overly the South Zone have been stripped away by erosion, exposing the Upper Iron Formation. The Company has also completed, the geotechnical drilling and test pitting programs for the Tailings Management Facility, Process Plant, Air Strip and borrow sources. In addition, the hydrogeological and rock mechanical holes for the design of open pit have been completed. An 80 tonne bulk sample was extracted and the pilot plant testing is in progress.



Property Description

The Lac Otelnuk Iron Project is located 170 kilometers north of the town of Schefferville, Quebec. This town once served as a centre for the iron mining and processing operations of the Iron Ore Company of Canada. The northern terminus of the Quebec North Shore and Labrador Railroad, a common carrier, is located in Schefferville.

The property lies within the Labrador Trough, one of the largest iron ore belts in the world. The belt contains world-class iron deposits that have been continuously mined since 1954.

Historical Work Completed

The property was first explored in the early 1950s when a significant magnetite iron formation was mapped over a strike length of approximately 25 kilometres. Subsequent diamond drilling and surface sampling in the 1970s, which was largely limited to the upper iron formation unit, resulted in historic mineral resource estimates for two adjacent zones, the North and South. Magnetite occurs throughout this iron formation, with the North and South zones largely uniform in continuity of grade and thickness.

Lakefield Research (now SGS Minerals Services) of Lakefield, Ontario, carried out limited metallurgical test work on surface samples and drill core from the North Zone in 1971 and 1974. In addition, in 1976, an 18-long ton bulk sample was taken from the North Zone, of which approximately one long ton was shipped to a German laboratory for metallurgical testwork. This work was carried out in 1977. Finally, in 1981 Lakefield carried out testwork on another portion of the bulk sample. While the results from the two laboratories cannot be directly correlated, both prepared concentrates grading 65.1% to 70.6% Soluble Fe with weight recoveries up to 41.0%, acceptable results for taconite deposits.

Recent Activity, Work Programs & Going Forward

In 2010, Adriana completed 40 diamond drill holes and the 2007 and 2008 field seasons, Adriana drilled 67 diamond drill holes to test the 9 kilometre strike length of the South Zone of the Otelnuk Property. The results from the drill program confirmed a large, flat lying iron formation over an approximate area of 22.5 square kilometres. The targeted formation remains open along strike to the northwest and southeast. The North Zone, where drilling in the 1970s outlined the presence of a significant iron formation similar to that of the South Zone.

The Lac Otelnuk iron formation is open along strike to the northwest and southeast. It subcrops at surface and dips gently (from 2 to 5 degrees) to the northeast, eventually plunging under sedimentary formations. The western extent is terminated by erosion. Due to the gentle north-easterly dip and westerly sloping terrain, much of the sedimentary rocks that overly the South Zone have been stripped away by erosion, exposing the Upper Iron Formation.

In November 2010, Adriana contracted Met-Chem to produce a Preliminary Economic Assessment (PEA) of the Otelnuk iron ore property. The purpose of this report was to provide a preliminary assessment of the project's options and viability. The study assumes the development of an open pit mine, concentrator, and pelletizing facility with planned annual output of 50 million tonnes of pellets grading 67% -- 69% Fe for 75 -- 100 years. The study also assumes that iron ore pellets will be transported via a newly constructed 815 km railway that will connect the processing facilities at Otelnuk with the port of Sept-Iles. The study purports that a new port facility at Sept-Iles is built and is capable of servicing 400,000 DWT vessels, and that a 240 km power line is erected between Brisay and Otelnuk. In total, the PEA report suggests total capex of $12.9 billion with first production to commence in 2016.

In May 2011, the Company commenced diamond drilling with the intent to further expand and upgrade the mineral resource and collect large diameter (PQ) core samples for grinding tests. The 2011 drill program contemplates 115 drill holes and, as of September 2011, the Company has drilled 71 holes and 10,475 meters.
In 2012, the Company drilled 157 BQ delineation holes totaling 18,508 meters to expand and upgrade the Mineral Resource. An additional 18 PQ holes totaling 1,957 meters were also drilled to obtain a 33 tonne bulk sample for metallurgical testing. Since 2007, Adriana and Lac Otelnuk Mining Ltd. have drilled a total of 392 diamond drill holes totaling 50,802 meters on the Lac Otelnuk property. The Lac Otelnuk iron formation is open along strike to the northwest and southeast. It subcrops at surface and dips gently (from 2 to 5 degrees) to the northeast, eventually plunging under sedimentary formations. The western extent is terminated by erosion. Due to the gentle north-easterly dip and westerly sloping terrain, much of the sedimentary rocks that overly the South Zone have been stripped away by erosion, exposing the Upper Iron Formation. The Company has also completed, the geotechnical drilling and test pitting programs for the Tailings Management Facility, Process Plant, Air Strip and borrow sources. In addition, the hydrogeological and rock mechanical holes for the design of open pit have been completed. An 80 tonne bulk sample was extracted and the pilot plant testing is in progress.

Metallurgical testing is being carried out by SGS Minerals, and Golder Associates has been retained to undertake an Environmental and Social Impact Analysis of the Project.

A total of 261 diamond drill holes totaling 34,037 meters have now been drilled on the South Zone of the deposit since 2007, over a strike length of 9 km and cross section width of 2.5 km. The Lac Otelnuk deposit is very uniform, dips gently to the northeast and has a potential thickness of approximately 100 meters where the deposit has not been eroded. Approximately 75% of the deposit outcrops to the surface. The deposit is open along strike to the northwest and southeast and down dip to the northeast.



The Company's goal is to advance feasibility and subsequent development stage through the future potential partnership with WISCO International Resources Development and Investment Limited.

Mr. Frank Condon, P.Eng., a consultant of the Company and a qualified person as defined by NI 43-101, has reviewed and approved the technical disclosure of this information on Lac Otelnuk.


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