Adriana Partners With ArcelorMittal

Adriana Partners With ArcelorMittal

Wednesday, August 20th 2008

Adriana Resources Inc. announce that it has reached an agreement with ArcelorMittal, the world’s leading steel company, on the principal terms for the development of an iron ore port facility in the State of Rio de Janeiro, Brazil. The Port will be constructed on lands acquired by Adriana in January 2008.

Michael Beley, President and CEO of the Company stated, “Three years ago, Adriana recognized the surging mineral super cycle and through strategic partnerships with Athena and WorldLink, quickly identified the need for a new iron ore port facility in Brazil that would create an export opportunity to deliver iron ore to the “End User”. Today we have partnered with the leading steel corporation in the world to export iron ore from Brazil. Partnering with ArcelorMittal is a significant milestone in the advancement of our Brazilian iron ore strategy. ArcelorMittal brings the global expertise in mining, ports, seaborne shipping logistics and the ability to finance large infrastructure and mining projects through to operation.”

Aditya Mittal, Chief Financial Officer and Member of ArcelorMittal’s Group Management Board, stated, “The planned port facility at Sepetiba Bay in Brazil is the ideal captive solution to deliver access to the export market for ore from the Iron Quadrangle region.”

The acquisition of the Port lands was disclosed in the Company’s news release dated January 10, 2008. In summary, the Company purchased a total of 771,818 square meters of land on the coast of Brazil (Bay of Sepetiba) for the development of an iron ore port facility. The purchase of an additional 85,757 square meters is expected to be completed during the third or fourth quarter of 2008. Since January 2008, the Company has been developing key strategic relationships and establishing a team of mining, port engineering, shipping and iron ore trading professionals to assist in advancing the Company’s iron ore strategy.

Prior to the Port Agreement, the Company had commenced the engineering and permitting required to develop a port facility capable of handling 5 – 10Mtpa of iron ore at inception and increasing to a potential 50 million tonnes by year five through the accelerated development of a deep water port facility. The Port Agreement is the culmination of the Company’s strategy in Brazil to develop the port facility with an end-user of iron ore. Given the capital-intensive nature of the project, the Company expects that the Port Agreement will establish the required funding, technical and regional expertise, and industry recognition to move the project through to completion and revenue generation.

Pursuant to the terms of the Port Agreement, ArcelorMittal has agreed to jointly develop the Port with the Company and acquire 80% of the Port for a lump-sum payment of approximately $40.5 million USD. The Company will retain the remaining 20% of the Port with pre-emptive rights until the Port reaches a capacity of 20Mtpa.

ArcelorMittal will use reasonable endeavours to assist Adriana in obtaining its portion of the Port Debt. Each party undertakes that it will be responsible for servicing and repaying its respective share of the Port Debt, consistent with its percentage ownership. The Company believes this support will substantially minimize dilution to the Company’s common shareholders. In addition, ArcelorMittal will own 80% of the proposed port capacity while the remaining 20% will be retained by the Company. Port capacity in excess of 20Mtpa will be subject to further negotiation and may result in the Company increasing its utilization rights.

The two companies also agreed to co-operate to explore future strategic and mutually beneficial world-wide opportunities, although neither party is obliged to enter into any agreements.

Pursuant to the terms of the Port Agreement, the Company has agreed to acquire all of the third party owned interests in Brazore Holdings Ltd. (“Brazore Barbados”), of which the Company currently beneficially owns 60% of the outstanding issued share capital. The acquisition cost for the minority interest, held by Athena Resources L.L.C. (“Athena”), will be $19.6 million USD. The Company and Athena have agreed that up to $19.6 million USD of the purchase price will be paid in shares of the Company at a deemed price of $1.10 CDN. In 2006, Athena brought the Port opportunity to Adriana based on Adriana management’s previous successful track record within Brazil and ability to advance projects on a global scale. Adriana and Athena continue to work closely together to review other opportunities within Brazil.

In addition to the consolidation of the minority interest in Brazore Barbados, the Company has agreed to acquire the minority interests of its Brazilian subsidiary for consideration of approximately $3.5 million USD. The Company and the minority interest holders have agreed that up to $1 million USD of the purchase price may be paid in shares of the Company at a deemed price of $1.10 CDN.

The Company’s agreement with the WorldLink Group in respect of port utilisation has been amended to match the Company’s Port off-take capacity of 20%. No further obligations are contemplated in connection with the WorldLink agreement.

The Port Agreement is subject to applicable regulatory and corporate approvals and the negotiation and execution of a definitive agreement by the parties which is anticipated to be concluded by September 30, 2008.

Upon completion of the proposed transactions Adriana will move forward with three strategic alliances: ArcelorMittal, WorldLink Group and Athena Resources L.L.C. Such partnerships and supported iron ore strategy will allow minimal dilution for shareholders for future project financings.

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