The Mineral Resource Estimate was completed by Watts, Griffis and McOuat Limited ("WGM"), Consulting Geologists and Engineers of Toronto, Canada, using information from the most recent drilling program on Adriana's 40% owned Lac Otelnuk Project. The Estimate resulted in 11.35 billion tonnes of Measured and Indicated Mineral Resources and an additional 12.39 billion tonnes of Inferred Mineral Resources based on a Davis Tube Weight Recovery ("DTWR") cutoff grade of 18%. The Measured and Indicated portion of the Mineral Resource extends over a strike length of 20 km. The Inferred portion of the deposit north and south of the Measured and Indicated Mineral Resource adds an additional strike length of 16 km to the deposit for a total strike length of 36 km.

For the 2011 drilling program, a changeover was made to Satmagan measurements to replace previous Davis Tube ("DT") testwork. For QA/QC purposes, some DT tests were still maintained and certain samples had both DT and Satmagan determinations. WGM built a relationship between the magnetic Fe determined by Satmagan and that determined by DT where both techniques were used. There was a strong correlation between the two types of measurements and WGM normalized the Satmagan results to the DT results using this relationship. For consistency with previous Mineral Resource estimates, a %DTWR cutoff was retained based on this relationship.

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 (previously named the South Zone) area of the deposit.

Recent more widely spaced drilling was carried out to the north and south of the previous Mineral Resource area to trace the strike extensions of the deposit and some additional holes were also drilled to follow the mineralization at depth in the south part of the deposit. The areas directly to the north and the south of the Main Zone for about 3 km strike length were all classified as Indicated. Any Mineral Resources beyond the 3 km extension on either side of the Main Zone was classified as Inferred, due to even more widely spaced drilling. The deeper intersections of mineralization, predominantly on the northeastern down-dip extension of the deposit, generally lie beneath 70 m or more of cover rock and this mineralization was re categorized as Inferred, regardless of the distance to a drillhole, to account for the uncertainty that would be associated with a higher stripping ratio.

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 May 2012, the Company commenced diamond drilling and to date has drilled 48 holes totalling 5,333 metres. Drilling is currently focused on definition drilling to better define the limits of the potential early stage mine pit for mine planing purposes. Additional drilling for hydrogeology monitoring wells and further delineation drilling to update inferred mineral resources are planed.

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 towards 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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