Strategem Takes Equity Position in Adrian Resources

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Ken Morgan
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Petaquilla Hosts One of the World’s Largest Undeveloped Copper/Gold Resources

VANCOUVER, BRITISH COLUMBIA – September 19, 2003 – Strategem Capital Corporation (“Strategem”) (TSX-V: SGE) announces that it has agreed to invest $900,000 for 6,000,000 Units of Adrian Resources Ltd. (“Adrian”) (TSX: ADL) at $0.15 per Unit. Each Unit consists of one common share and one half warrant, each whole warrant exercisable for two years from closing at $0.25 per share. Adrian has also arranged to issue an additional 9,000,000 Units on the same terms to other parties, for a total proposed financing of $2.25 million.

“We believe copper and gold prices are poised to move higher, and view this investment in Adrian as an excellent opportunity to participate in a world class deposit at these prices,” said Ken Morgan, the President and CEO of Strategem. “Adrian’s Petaquilla Property has previously been ranked as one of the top five undeveloped copper resources in the world. There is a tremendous opportunity for upside if copper prices continue to improve.”


Adrian is a Vancouver-based mineral exploration company listed on the Toronto Stock Exchange (the “Exchange”). Adrian owns a 52% interest the Petaquilla Property in Panama, subject to Teck Cominco’s (“Teck”) right to acquire half of such interest by completing, at its cost, a bankable feasibility study, which has been completed, and arranging or providing Adrian’s share of costs of placing Petaquilla into commercial production. Inmet Mining Corporation owns the remaining 48% interest.

The Petaquilla Property is a 136 square kilometer property containing eight copper-gold porphyry deposits and one epithermal gold deposit. The property was the subject of a Final Feasibility Study (the “Final Study”) prepared in 1998 by H.A. Simons Ltd. (“Simons”) on behalf of Teck which concluded that the mineable reserves (measured and indicated only), in three of the deposits totaled 1.115 billion tonnes grading 0.50% copper, 0.09 g/t gold, 0.015% molybdenum, as well as recoverable silver. According to the Final Study, the recoverable metal content contained in these reserves totals at least 9.4 billion pounds of copper, 1.37 million ounces of gold, 24.1 million ounces of silver, and 131.1 million pounds of molybdenum.


Development of the Petaquilla Property is uneconomic at today’s copper prices. The Final Study estimated that copper could be produced at Petaquilla at a break even price of US$0.89 per pound. Copper is currently trading in the range of US$0.80 per pound. Adrian wrote off its $32,628,433 Petaquilla Property carrying value in January 2002 as a result of depressed copper prices. Teck is required to provide production financing to earn half of Adrian’s interest in the property, but has exercised its right to defer a production decision based on external economic conditions, primarily the price of copper. The Final Study estimated the capital cost of putting the three deposits into production at US$1.12 billion.


The investment by Strategem in Adrian is subject to regulatory approval and normal due diligence by Strategem. Upon closing, Ken Morgan and Richard Fifer, a former director of Adrian, will be appointed to the Board of Directors of Adrian. Mr. Morgan will also be appointed as the CFO of Adrian and will receive options and a management fee of $7,640 per month from Adrian. Mr. Morgan will reduce the management fee he receives from Strategem to reflect the time spent managing the affairs of Adrian.

About Strategem Capital

Strategem Capital Corporation is a publicly-traded merchant bank focused on the development of emerging companies with growth potential. The Company invests in debt and/or equity positions in these companies.

This release and prior releases are available on the Company’s Internet web site located at


“Kenneth W. Morgan”
Kenneth W. Morgan, CA, CPA
President, CEO and Director

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.