Advanced Explorations Inc announced that it has completed and executed an agreement with XinXing Pipes Group Co Ltd to form a partnership for the development of the Company's Roche Bay iron ore project.
AEI signed the Agreement with XXP's subsidiary, Xinxing Ductile Iron Pipes Co Ltd and its affiliate China Huaxin International Trade Co Ltd. XDIP and HIT have jointly agreed to acquire 19% of AEI's issued and outstanding stock at a price of USD 0.25 per share and valued at approximately USD 5,300,000 (equals 21,233,396 common shares to be issued). The Agreement also sets out principles for further direct investment into AEI or the establishment of a joint venture in order to complete a definitive feasibility study for AEI's Roche Bay Project.
AEI and XDIP have established the basis for collaborative development of the Roche Bay Project, and XDIP will earn a 50% direct interest in a newly formed joint venture entity the "Roche Bay JV". XDIP will provide USD 20,000,000 to the Roche Bay JV to complete the DFS and a further USD 30,000,000 of working capital to the Roche Bay JV upon completion of the DFS. In addition, XDIP has agreed to provide the necessary financing and development capital for AEI's Roche Bay Project to a maximum of USD 1 billion. In accordance with the Agreement, AEI has agreed to provide XDIP with 50% off take from all iron products once the Roche Bay Project begins production.
Mr John Gingerich president & CEO said “We are extremely pleased with our partnership with XinXing Pipes Group. The Company believes this agreement provides an excellent value for both our partners and AEI's shareholders. A significant equity position in AEI has been obtained in the context of the current depressed venture markets while providing clear framework to achieve production, and that could lead to other joint development opportunities. The exploration strengths of our team in collaboration with the development skills and financial resources of XXP can also be leveraged beyond the Melville Peninsula, Nunavut opportunities. These are very exciting times in iron ore as indicated by M&A activities in the region. The global demand for iron ore has brought international focus to the world's emerging opportunities. Having a project on the ocean provides exceptional leverage for companies focused on development. We expect, there will be significant operational and capital advantages which may be recognized by XXP's involvement and as a result of concluding this Agreement.”
The Agreement is focused on the Company's Roche Bay Project and does not include the Tuktu Project, however, the Tuktu Project could form part of future negotiations and discussions. The Company has also received other interest in this and other projects from third parties, and discussions are ongoing.
The Agreement is subject to the approval of the TSX Venture Exchange and other authorities. In connection with the investment a finder's fee may be paid in accordance with applicable laws and the policies of the TSX Venture Exchange.
