Adrian Acquires Interest in Hyperion Resources

Business Wire, Nov 27, 1998

VANCOUVER, British Columbia--(BUSINESS WIRE)--Nov. 26, 1998-- Adrian Resources Ltd. (NASDAQ:ADLRF) (TSE:ADL.) ("Adrian") is pleased to report that it has signed an agreement (the "Agreement") with Hyperion Resources Inc. ("Hyperion"), Rhodes Mining NL ("Rhodes") and Ricdal Consultants Pty Ltd. ("Ricdal") whereby Adrian has agreed, subject to regulatory approval, to acquire certain securities of Hyperion.

If all of the transactions contemplated in the Agreement are consummated, Adrian will own approximately 52 percent of the issued shares of Hyperion.

The basic terms of the Agreement are as follows:

1. Adrian will purchase 1,000,000 units of Hyperion at a price of

$0.15 per unit, each unit comprised of one share and one two-year

warrant exercisable at $0.15 for the first year and at $0.20 for

the second year. The proceeds from this private placement shall

be used to carry out exploration on Hyperion's Holguin property

and to pay certain debts of Hyperion, such debt repayment not to

exceed C$50,000.

2. Adrian will also purchase 375,000 escrow shares of Hyperion at

cost ($0.01 per share) from Rhodes, as to 250,000 shares, and

Ricdal, as to 125,000 shares.

3. Adrian is entitled to purchase 375,000 shares of Hyperion by

issuing 125,000 shares of Adrian.

4. Rhodes will assign all of its interest in 1,500,000 warrants

(entitling the purchase of an equal number of shares of Hyperion

at $0.30 per share) held by Rhodes in consideration of the

issuance by Adrian of 500,000 share purchase warrants, entitling

the purchase of up to 500,000 shares of Adrian at a price of

C$0.90 per share.

5. Adrian will be entitled to purchase up to an additional 2,000,000

units of Hyperion at the prevailing market price, less the

maximum discount permitted by the Vancouver Stock Exchange for a

period of two years following the closing of the initial

placement. The warrants comprising part of the unit will be for a

two-year-term and will be priced at the minimum prices allowed by

the Vancouver Stock Exchange.

6. On the closing of the initial placement, Adrian will be entitled

to appoint the majority of directors on Hyperion's Board and

Rhodes will grant Adrian an irrevocable voting trust to ensure

continuation of this board majority for as long as Adrian owns

any shares of Hyperion.

In addition to the Agreement, Adrian has entered into an agreement with Alan M. Smith & Associates Ltd. whereby Adrian is entitled to purchase 100,000 shares of Hyperion by issuing 33,333 shares of Adrian.

Smith will also assign all of its interest in 100,000 warrants held by Smith entitling the purchase of an equal number of shares of Hyperion at a price of $0.15 per share in the first year and at $0.20 in the second year in consideration of the issuance by Adrian of 33,333 share purchase warrants, entitling the purchase of up to 33,333 shares of Adrian at a price of $0.45 per share in the first year and at $0.60 in the second year.

Adrian's objective in entering into both agreements is to indirectly acquire an interest in Hyperion's Holguin property in northeastern Cuba. Adrian believes that the Holguin property has very good potential to host a significant volcanogenic massive sulphide ("VMS") deposit. Hyperion owns a 50 percent interest in the Holguin property through its Cayman Islands subsidiary, Rhodes Victoria S.A. The other 50 percent is owned by Geominera S.A., the Cuban government partner.

The Holguin property is a 5600 hectare concession in northeastern Cuba. Adrian's primary exploration target on the Holguin property will be the copper VMS target at Monte Rojo, which is hosted by rhyolitic breccias, flows and tuffs in contact with mafic and ultramafic flows plus/minus pyroclastics -- the classic host rocks for VMS deposits.

Hyperion has conducted preliminary geologic mapping at Monte Rojo, collected grid-controlled soils (not yet analyzed due to financial constraints), completed ground magnetics and UTEM geophysics and drilled three short exploration holes.

The purpose of Hyperion's exploration at Monte Rojo was to verify a result obtained by a Hungarian-Cuban company from drilling conducted in 1989. The 1989 drill hole returned a 5.05 meter interval which graded 8.2 percent copper at a vertical depth of 30.0 meters. This high-grade section is the upper portion of a thicker copper-enriched zone covering 29.3 meters which grades 2.1 percent copper.

Another 1989 drill hole was located 200 meters to the west and returned a visual estimate of greater than 1 percent copper over 4.0 meters.

Hyperion's hole MR98-01, drilled within 10 meters of the 1989 hole, intersected a 5.1 meter interval which graded 6.5 percent copper, located at a basalt-dacitic agglomerate contact. Geological, geophysical and geochemical interpretations of two other Hyperion holes strongly suggests that the holes collared in the footwall stratigraphy and were drilled beneath the VMS horizon. The geophysical results indicate numerous anomalies within the limited 1.0 kilometer by 2.0 kilometer grid coverage.

Previous drilling was proximal to one of the lower priority anomalies, suggesting the best targets remain to be drilled. Drilling has also returned elevated values for cobalt and silver and sporadic anomalous zinc within the copper-rich interval.