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Adriana places Lac Otelnuk iron ore project on care and maintenance

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Adriana places Lac Otelnuk iron ore project on care and maintenance

Adriana ResourcesInc. said May 9 that it has placed the Lac Otelnuk iron ore project in Quebec under careand maintenance amid the low price environment.

"The company has taken the necessary actions to protectand preserve the long-term option value of the [Lac Otelnuk project] in anticipationof the commodity cycle returning to more favorable iron ore pricing, and a morefavorable financing market in the future," the company said in a statement.

As of March 31, the project had C$7.9 million, which will besufficient to maintain the mining claims in good order and to make advanced royaltypayments until 2021.

Adriana holds a 40% stake in the project while the remainingis owned by Wuhan Iron & SteelCo. Ltd.

A 2015 feasibilitystudy on the Lac Otelnuk iron ore project outlined a posttax net presentvalue of about US$5.24 billion at an 8% discount rate, an internal rate of returnof 13% and a payback period of 7.3 years while total CapEx was estimated at US$14.19billion.