Adriana Resources Inc.

Published : August 25th, 2008

featured in the Globe and Mail

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Keywords :   Australia | Brazil | Bugs | Canada | China | Commodities | Gold | Growth | India | Iron | London | Market | Reality |

Michael Beley: Two phone calls can change the world


From Saturday's Globe and Mail

August 22, 2008 at 6:00 AM DT

CALGARY --- Six weeks ago, Michael Beley was leaving the London office of the world's biggest steel maker when it hit him: Half a world away, his proposed sea port was going to become a reality.

Plans for a $250-million (U.S.) port off the Brazilian coast, seemingly distant only a day earlier, were suddenly within reach. Holding the keys to a small but vital piece of a much larger deal being chased by India's ArcelorMittal, his Vancouver-based Adriana Resources Inc. is a case study into how a tiny company can have big plans become a reality virtually overnight.

"We were looking for a way to get our port developed and also go out and acquire an iron resource. Now, here comes a group that will effectively assist us in funding the port, acquire an iron resource of their own to put through the port, and also assist us in acquiring [an iron resource]," says Mr. Beley, 69.

"You've heard of the concept of leaping into the air and clicking your heels together? Well, that's it."

How did tiny Adriana manage to get in bed with a global steel behemoth as part of an $850.5-million deal inked this week to develop iron ore assets in Brazil? The answer can be traced to two phone calls. Adriana

A career gold industry executive, Mr. Beley and a partner, Richard Barclay, started Adriana roughly three years ago, figuring that rocks, not nuggets, had the shinier future. Industrial demand from emerging markets such as China, Mr. Beley calculated, would likely drive up prices for base metals such as iron ore.

They got started by picking up a small iron ore project in Quebec, along with a mining play in Nunavut. At a conference in Toronto soon after, the pair bumped into a newsletter writer, an old acquaintance who liked the story of two veteran gold bugs with global experience shifting to iron ore, and wrote them up.

A New York limited partnership, Athena Resources LLC, read the piece and cold-called Adriana. Looking for experienced people to help with a South American project, the partners at Athena Resources LLC laid out the merits of building an iron ore port in Brazil. Mr. Beley didn't know much about ports then, but he had done work with a West Coast company that did. They liked what they saw. Flights to Rio de Janeiro were soon booked.

Brazil and Iron Ore

The trick in the iron ore business isn't in exploring for supply, which is abundant, but in getting it to market cheaply. Iron ore, the feedstock in steel making, is rarely found right next to steel plants -- making transportation a major cost. In Brazil, the world's second-largest iron ore producer, Adriana arrived at an ocean-side spot that was a mere 300 kilometres from iron ore mines, with an added bonus of a railway running by the front door. After nearly a year of bureaucratic wrangling, Adriana locked up the port location in January.

Arcelor Mittal

When the phone rings and ArcelorMittal is on the other end asking for a meeting, Mr. Beley will tell you it's like a dream come true for a junior mining company. Created in a blockbuster 2006 merger, ArcelorMittal accounts for 10 per cent of global crude steel production. Lakshmi Mittal, the world's fourth richest man, who holds a 44-per-cent stake in the firm, has said the steel maker wants to self-supply 75 per cent of its iron ore by 2014, up from 45 per cent currently.

ArcelorMittal was considering an $810-million offer for Brazilian iron ore assets from London Mining PLC. Without a port facility, however, ArcelorMittal would be unable to ship the iron ore and the deal would be scuttled.

What's next

After a whirlwind round of negotiations, Adriana agreed to sell an 80-per-cent stake in the Brazilian port to ArcelorMittal for $40.5-million. While Mr. Beley wanted Adriana to keep a bigger stake, in return for gaining control of the port ArcelorMittal agreed to help Adriana secure its own Brazilian mining project, while also keeping Adriana in the loop on other opportunities. For Mr. Beley, the potential of future deals with ArcelorMittal makes becoming a minority partner in the port worth the risk.

"I want to be able to go and show ArcelorMittal the balance of our assets and what we're doing and what we're capable of doing," Mr. Beley says. "On the other side of the coin ... for them to buy us out is nothing, but if I can show that I can make a difference to their bottom line, then we'll be here for a while."

Adriana Resources Inc.

Key executives:

Michael Beley: President and chief executive officer

History: Vice-president of Bema Gold Corp. 1976-1992

Vice-president of El Dorado Gold Corp. 1992-2001

Richard Barclay: Chief financial officer

History: Chief financial officer of Bema Gold Corp. 1976-1992

President and chief executive of El Dorado Gold Corp. 1992-1999

Market Capitalization:

$63- million

Share price: 90 cents

Iron ore

Demand for iron ore is surging in hand with the growth of Asia's emerging economic superpowers, China and India.

Iron ore is mined in about 50 countries, with the seven largest accounting for three-quarters of world production. Australia and Brazil are the two biggest iron ore exporters, accounting for about a third of total world exports.

The world's biggest mining companies, BHP Billiton and Rio Tinto, are among the largest iron ore suppliers. As prices have risen, however, steel makers such as ArcelorMittal are sourcing more of their own supply.

Iron ore players hold annual negotiations to set prices. In June, Chinese steel makers and Rio Tinto agreed to a record 96.5 per cent price increase. In 2005, prices surged about 70 per cent as the commodities boom took hold. Last year, iron ore prices charted a more modest 9.5 per cent increase.

Special to The Globe and Mail

Suite 1818 - 701 West Georgia St
Vancouver, BC
Canada V7Y 1C6

Telephone: 604.629.0250
Fax: 604.629.0923
Toll Free: 877.629.0150


Aug 20, 2008: News Releases: Adriana Partners With ArcelorMittal (more...)

Aug 11, 2008: News Releases: Adriana Announces $2 Million Financing (more...)

Jul 09, 2008: News Releases: Adriana Drills 1,730 Meters at Lac Otelnuk; Comple... (more...)

Jun 25, 2008: News Releases: Adriana Grants Incentive Stock Options (more...)


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Adriana Resources Inc.

ISIN : CA00735P1062
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Adriana Res. is a iron development stage company based in Canada.

Adriana Res. holds various exploration projects in Brazil, in Canada and in Finland.

Its main exploration properties are MUSTAVAARA in Finland, BRAZORE LTDA and MACKENZIE IGNEOUS EVENT in Brazil and UNAD JV in Canada.

Adriana Res. is listed in Canada, in Germany and in United States of America. Its market capitalisation is CA$ 2.4 millions as of today (US$ 1.9 millions, € 1.7 millions).

Its stock quote reached its highest recent level on May 05, 2006 at CA$ 2.03, and its lowest recent point on October 12, 2023 at CA$ 0.02.

Adriana Res. has 157 554 238 shares outstanding.

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Annual reports of Adriana Resources Inc.
2008 Annual Report
Annual Report 2007
Financings of Adriana Resources Inc.
5/22/2011Continues Negotiations
2/15/2011Announces Signing $28 Million Private Placement With WISCO
12/31/2009Announces Flow-Through Private Placement Closing
12/17/2009Announces C$4 Million Flow-Through Financing and New Chairma...
11/15/2007Announces $30 Million Private Placement
Option Grants of Adriana Resources Inc.
9/18/2009Engages Investor Relations Specialists & Grants Incentive St...
8/19/2009Grants Incentive Stock Options
6/16/2009Grants Incentive Stock Options
6/26/2008Grants Incentive Stock Options
Nominations of Adriana Resources Inc.
4/9/2013The Company Appoints a Director, Metallurgical
3/11/2013Announces Resignation of a Director of the Company
2/4/2013The Company Appoints a Director, Environment and Sustainabil...
7/20/2009Appoints Allen J. Palmiere to Board of Directors
11/20/2008Appoints Director of Port Development for Brazil Operations
6/25/2008Appoints Joseph Fodor as Executive Vice President
5/16/2008Appoints Michael Petrina Vice President Operations
4/2/2008Appoints Paul Yeou to the Board of Directors
Project news of Adriana Resources Inc.
10/23/2013(Lac Otelnuk)The Company Awards Feasibility Study Contract for Lac Otelnu...
8/15/2013(Lac Otelnuk)on Corporate Position And Progress on Lac Otelnuk Project
10/22/2012(Lac Otelnuk)Provides Project Update for Lac Otelnuk
3/20/2011(Lac Otelnuk)Announces Assay Results
1/17/2011(Lac Otelnuk) Adriana Announces Strategic Partnership with WISCO
2/12/2009(Lac Otelnuk)Confirms Lac Otelnuk Iron Deposit Over 22.5 Square Kilometre...
1/29/2009(Lac Otelnuk)Commences Resource Estimate at Lac Otelnuk Iron Project
11/25/2008(Lac Otelnuk)Completes 2008 Exploration Program At Lac Otelnuk Iron Proje...
7/9/2008(Lac Otelnuk)Drills 1,730 Meters at Lac Otelnuk; Completes Geophysics on ...
6/4/2008(Lac Otelnuk)Commences 2008 Diamond Drill Program on the Company's 100% O...
5/29/2008Reaches Milestone in Brazil Port Permitting
4/3/2008(Lac Otelnuk)Reports Results at Lac Otelnuk - Drills 95.8m of 30.4% Fe
2/19/2008(Lac Otelnuk)Announces Update on Lac Otelnuk Drill Program
1/10/2008(Brazore Ltda) Completes Purchase of Brazilian Port Land; Achieves First P...
Corporate news of Adriana Resources Inc.
5/30/2016Adriana Files Financial Statements for the Quarter Ended Mar...
5/9/2016Adriana Provides Shareholder Update
4/1/2016Adriana Announces Change Of Director And Change Of CFO
3/31/2016Adriana Announces Change of Director and Change of CFO
2/26/2016Adriana Files Annual Financial Statements Ended December 31,...
1/4/2016Adriana Funds the Lac Otelnuk Joint Venture beyond 2020
11/6/2015Adriana Files Third Quarter Financial Statements Ended Septe...
8/6/2015Adriana Files Second Quarter Financial Statements ended June...
4/23/2015Adriana announces that it has filed a NI 43-101 Technical Re...
4/23/2015Adriana announces completion of the Feasibility Study on the...
4/22/2015Adriana Announces Completion of the Feasibility Study on the...
3/6/2015Vista Partners Publishes March 2015 Macroeconomic & Investme...
2/26/2015Adriana Files Financial Statements for the Year Ended Decemb...
2/6/2015Vista Partners Publishes February 2015 Macroeconomic & Inves...
11/6/2014Adriana Files Third Quarter ended September 30, 2014
10/21/2014Adriana Announces its Participation in Feasibility Study for...
9/18/2014Adriana Grants Incentive Stock Options
8/8/2014Adriana Files Second Quarter Ended June 30, 2014
7/3/2014Vista Partners Publishes July 2014 Macroeconomic & Investmen...
6/17/2014Adriana Grants Incentive Stock Options
5/8/2014Adriana Announces Results of the Financial Quarter ended Mar...
4/4/2014Vista Partners Publishes April 2014 Macroeconomic & Investme...
10/30/2013Announces Completion of Mineral Resource Estimate
4/13/2011(Lac Otelnuk)Announces Positive Preliminary Economic Assessment on Lac Ot...
1/25/2011Adriana Res. announces grant of 947.500 incentive options at...
12/1/2009BNN - Chinese Demand For Iron Ore - Interview with Adriana C...
11/25/2009Announces Management and Board Changes
8/17/2009Announces Approval Of Amended Arcelormittal Convertible Debe...
7/24/2009Enters into Memorandums of Understanding with a Major Chines...
6/1/2009ArcelorMittal Extends Port Agreement with Adriana
3/9/2009& Stock Research Portal
1/6/2009Arcelormittal Extends Port Agreement with Adriana
11/12/2008Goldbard Cancels Agreement to Acquire MIE Metals Corp.
11/5/2008Iron sector hit by global slowdown
9/12/2008Closes $10 Million Financing
9/10/2008Goldbard Enters Agreement to Acquire MIE Metals Corp.
8/25/2008featured in the Globe and Mail
8/20/2008Partners With ArcelorMittal
8/11/2008Announces $2 Million Financing
7/2/2008We're Moving!
6/20/2008featured in Global Mining Finance
5/9/2008 Shareholders Approve Shareholder Rights Plan
5/9/2008Announces Dr. Anthony Patriarco Joins Board of Directors
4/8/2008 Adopts Shareholder Rights Plan
3/25/2008 Acquires Labrador Trough Iron Prospect
2/20/2008 Signs Letter of Intent with Makivik Corporation
2/14/2008Announces Brazilian Iron Ore Focus and Project Spin-Out
1/15/2008 Announces Conversion of Convertible Debentures
11/22/2007 Closes First Tranche of $30 Million Financing; Exercises Po...
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