Adriana Resources receives approval for extension of the unsecured convertible debenture held by ArcelorMittal
If one ever had any doubts about the prospects for iron ore companies, the ongoing controversy over Rio Tinto in China should dispel them. Following the unsuccessful bid by Chinalco, China’s largest aluminium producer, for a major stake in Rio Tinto, China has arrested some Rio Tinto executives in China for allegedly steeling “state secrets”. Meanwhile, Rio Tinto and BHP Billiton's proposed iron-ore joint venture has prompted protests in China fearing "a strong monopolistic flavour" in the venture. Chinese firms apparently are actively seeking ways to cope with it.
These controversies clearly indicate prospects for the iron ore market and for iron ore companies. In all likelihood, the joint venture will go through much to the dismay of Chinese steel makers as well as other steel makers around the world. The venture would also boost prospects for other iron ore companies including those engaged in exploration and development of iron ore projects.
It is therefore hardly surprising that Canadian Venture listed Adriana Resources (TSX.V: ADI) has been able to extend the unsecured convertible debenture held by ArcelorMittal in the principal amount of $6,450,000. The unsecured convertible debenture is now due September 10, 2012.
This represents ArcelorMittal’s commitment to fund a significant portion of Adriana's monthly costs incurred in connection with its port permitting process in Brazil and 80% of substantial third party consultant costs incurred in connection with Adriana's port permitting process in Brazil.
Michael Beley, Chairman of Adriana stated that the Company continues to work closely with ArcelorMittal to advance its port development project in Brazil, and is pleased with ArcelorMittal's commitment in assisting Adriana to fund the advancement of the project through the combination of cash payments and interest deferrals.
As the world seeks new iron ore suppliers, companies such as Adriana are expected to receive renewed interest. The company has three iron ore projects namely Lac Otelnuk project, Quebec, Canada, Bedford iron prospect, Labrador, Canada and Brazore Ltda, Iron Export Project, Brazil. Located 170 km north of Schefferville, once a centre for the iron mining and processing operations of the Iron Ore Company of Canada, Lac Otelnuk is ranked about 12th in the world. Adriana recently signed two memorandums of understanding with a major Chinese steel company to bring the Lac Otelnuk Project into production, subject to (i) the negotiation and entering into of a definitive agreement and (ii) applicable regulatory approval. Adriana’s continued ability to attract investors to form partnerships further indicate the quality of their assets
Bedford iron prospect meanwhile is still an exploration endeavour and Adriana plans to commence some geophysics work soon. The project is just 25km Northwest of Schefferville on the east side of Howells River where Millennium Capital Corp. (NML) has its iron ore project.
Iron ore projects require hefty capital investments and Adriana’s partnership with ArcelorMittal and the Chinese group ensures future financing of its projects. As the global economy revives, demand for iron ore is expected to take off with companies such as Adriana bound to attract investor attention.
ArcelorMittal is the world's leading steel company, with operations in more than 60 countries. The company is the leader in all major global steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. With an industrial presence in over 20 countries spanning four continents, the Company covers all of the key steel markets, from emerging to mature.
About Adriana Resources Inc.
Adriana's goal is to become a fully integrated iron ore producer through continued development of its iron ore port facility in Brazil, through acquisition of iron ore mineral resources in Brazil, and the advancement of the Lac Otelnuk Iron Project in Quebec, Canada