Advanced Explorations Inc. to Conclude Deal With China's XinXing Pipes Group
TORONTO, ONTARIO -- (Marketwire) -- 08/31/10 -- Advanced Explorations Inc. (the 'Company' or 'AEI') (TSX VENTURE: AXI)(FRANKFURT: AE6) is pleased to announce that XinXing Pipes Group Co., Ltd. ('XXP') has completed its initial review and site visit of the Roche Bay project and based on their positive assessment have committed to finalizing negotiations to a formal agreement by October 15, 2010. Subsequent discussions with XXP's led to a number of changes to the original July 19th Memorandum of Understanding (the 'Agreement') in order to facilitate the implementation of a strategic investment and alignment with other potential complimentary investors. The key points to the supplemental agreement are:
1. Initial review of the technical and economic parameters of AEI's Roche
Bay project have been completed with XXP agreeing to move negotiations
forward to complete a formal agreement.
2. XXP has modified the Agreement to allow one of its affiliates to
undertake an investment in AEI at $0.25 per share to acquire 19% of the
Company's outstanding shares.
3. The Agreement has also been modified to facilitate the inclusions of
potential third parties interested in developing other sites/projects
together with AEI in the Melville Area. XXP and AEI will jointly assess
the possible synergies to their plans in respect to any proposed
opportunity.
4. With the satisfactory completion of the initial phase, the Parties have
agreed to a target date of October 15, 2010 to complete the formal
agreement in respect to a strategic investment and cooperation.
The basis of the Agreement is a process by which XXP can acquire a substantial direct or indirect interest in the project in exchange for technical and financial support to ensure AEI's development of the project. The contemplated agreement is subject to TSX Venture Exchange, and other regulatory approvals which may also include shareholder approval.
John Gingerich, President & CEO, commented:
'We are extremely pleased to have XXP involved in the project as we believe them to be a partner with the financial strength and technical expertise required to move the Roche Bay iron ore project towards production. With the changes to the Agreement we have introduced the possibility for more dynamic development scenarios allowing other interested companies to work with XXP and AEI on the region's development opportunities. There is now a mechanism that provides additional investment opportunities without affecting XXP's desires to be AEI's exclusive primary partner in the Roche Bay development and becoming its largest shareholder'.
The Roche Bay project represents a significant capital project, and XXP's positive assessment and the decision to move forward confirm the fundamental strengths of this project and the other opportunities in the Melville area. In addition, it is believed that working together with XXP will help AEI realize cost savings such as modular construction (off-site construction, on-site assembly) of the mine's operational facilities. XXP has requested AEI initiate the necessary permitting approvals and negotiations that would allow the project to fully leverage the modular design strategy.
ON BEHALF OF THE BOARD
John Gingerich, President & CEO
ABOUT Advanced Explorations Inc.
Advanced Explorations Inc., based in Toronto, Ontario, is a resource development company focused on developing high quality iron ore opportunities. Currently, the company holds interests in projects located in Nunavut with low infrastructure needs. The Roche Bay magnetite project is located on the coast and is bolstered by a deep water access to its eastern coast. The Company intends to build upon logistical benefits when developing its current projects at Roche Bay and Tuktu. AEI plans to produce high quality iron products from the 357 million tonnes inferred resource of the project's C-Zone. Its preliminary economic assessment for the project indicates a potential US $2.76 billion net present value, a minimum of 50 years mine life and a return on investment between three and five years. Led by an experienced management team with technical, exploration and mining expertise the company has the capabilities to rapidly advance the Roche Bay and Tuktu Projects and explore other local and global opportunities.
ABOUT XinXing Pipes Group Co., Ltd.
XXP is a State Owned Enterprise in China and has its main business in iron and steel, military clothing supply, heavy machinery engineering, real estate investments and others. Currently XXP has Subsidiaries in 24 provinces throughout China, Mongolia and India with over 80,000 employees. Two of its Subsidiaries are publically traded, and XinXing Ductile Pipe Inc., its iron and steel Subsidiary is listed on the Shenzhen Stock Exchange (Ticker: 000778) with a market value of approximately 15 billion Yuan. According to XinXing Ductile Pipe's most recent news release dated August 11th this year, their 2010 target production is approximately 6 million tons of steel and cast iron pipes. XXP is one of the world's largest producers and vendors of cast iron pipe.
This news release also includes forward-looking statements that involve a number of risks and uncertainties. The information reflects numerous assumptions as to industry performance, general business and economic conditions, regulatory and legal requirements, taxes and other matters, many of which are beyond the control of the company. Similarly, this information assumes certain future business decisions that are subject to change. There can be no assurance that the results predicted here will be realized. Actual results may vary from those represented, and those variations may be material.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the 'U.S. Securities Act') or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED WITHIN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Contacts:
Advanced Explorations Inc.
(416) 203-0057 x226