Canadian junior Adriana Resources in mid-April 2011 reported positive results from an NI 43-101 compliant preliminary economic assessment of its Lac Otelnuk iron ore pelletizing project on the Labrador Trough in Nunavik, Canada, 170 km north of Schefferville, Quebec. The project is still in its early development stages, but it is impressive in its contemplated scope. The Lac Otelnuk taconite mineralization, described as similar to the Mesabi Range ores of Minnesota, would be mined at an average rate of 175 million metric tons per year (mt/y) and processed to produce 50 million mt/y of pellets over a mine life of 34 years. An 815-km railway would be constructed to transport the product to new port facilities to be constructed at SeptÎles, Quebec. Capital cost to construct the project is estimated at $12.9 billion.

In late March 2011, China's Wuhan Iron and Steel Co. (Wisco) agreed to pay approximately $120-million for a 20% stake in Adriana and a 60% share of the iron-ore project. Commitment by Wisco of more than $28 million for the 20% stake was firm, but terms for a joint venture and the remaining $91.6 million were still being negotiated as of late-April.

Resources at the Lac Otelnuk deposit are estimated at 4.29 billion mt indicated and 1.97 million mt inferred at grades of 29% to 30% iron. The preliminary economic assessment for the project was completed by Met-Chem Canada. The study assumes a large-scale, open-pit, truck-and-shovel mining operation, and three processing modules, each producing 16.6 million mt/y of pellets. A preliminary concentrator flowsheet incorporates semi-mobile primary gyratory crushing, secondary cone crushing, primary grinding, magnetic separators, concentrate dewatering, and tailings dewatering and disposal. The pelletizing flowsheet assumes thickeners, slurry tanks, filtering equipment, cake storage bins, mixers, balling discs with roller screens, indurating machines, pellet screening, hearth layer and conveyor system.

Assuming on-time completion of all major project milestones, initial production at the Lac Otelnuk project could begin during the fourth quarter of 2016. Much of the project schedule depends on fast-tracking exploration and prefeasibility/feasibility studies while the environmental assessment process in being completed.