Advanced Explorations Inc. Re-Scoping Development Plans to Accommodate a 20 Mtpa Production Target
TORONTO, ONTARIO -- (Marketwire) -- 03/22/12 -- Advanced Explorations Inc. (the "Company" or "AEI") (TSX VENTURE: AXI)(FRANKFURT: AE6) announces today that in response to expanding interest in its projects and emerging development scenarios within the East Melville area (which includes the Roche Bay C-Zone, Roche Bay A-B Zone, and the Tuktu projects), the Company has decided to expand the scope of its development scenario to support a possible potential start-up of approximately 8 million tonnes per annum (Mpta) with a longer term regional production target of up to 20 Mtpa. In particular core infrastructure would become immediately strained if additional production from Tuktu or the A-B Zone were to occur. A major portion of the technical evaluations have been completed through the ongoing feasibility study (FS) and technical studies completed by XinXing Ductile Iron Pipes Co. Ltd. (XDIP). The proposed re-scoping will include adjustments to the ongoing study to accommodate the targeted higher production rate. It does not necessarily impact the C-Zone initial mine plan with production currently to supply 5 Mtpa. This move should allow the Company to further benefit from lower operating costs through better capital/infrastructure leverage, given the number of development options associated with the Roche Bay and Tuktu projects.
John Gingerich, President & CEO commented:
"The exciting expansion of development scenarios places AEI as one of the foremost iron ore projects in Canada. As the Roche Bay project is located adjacent to a natural deep water harbour, our partners do not face uncertainty in respect to future port and railroad developments as to securing supply requirements. In the last few months we have worked to address the exciting development scenarios while securing fundamental collaborative opportunities and additional funding in respect to a much larger development. Our challenge in the near term is to align all the expressed interests into a collaborative development strategy that may be 4 to 5 times greater than the base plan initiated one year ago. The Company also believes the new structure will facilitate an earlier implementation of the funding for a fast track early works program".
On February 28, 2012 XDIP announced the completion of a Pre-Feasibility Study on the Roche Bay project and the role AEI may play in meeting Chinese domestic iron ore concentrate demand. Moreover, with broadened development scope, AEI is capable of becoming a key supplier to China, which is strategically seeking to secure up to 300 Mtpa of seaborne supply and guaranteed long term access of feedstock for its domestic steel industry. By expanding its regional production objectives, AEI will be better able to play a role in meeting XDIP's and China's supply requirements. Due to its location near shore, Roche Bay does not face the potential bottlenecks in product delivery other land-based projects may face. AEI's ocean location provides natural deep water shipping lane access that can expand as market requirements demand.
The restructuring of AEI's iron ore assets, also announced February 28th, 2012, was developed in response to inquiries from third parties interested in participating in the Tuktu Project that is not part of the XDIP Joint Venture option, as well as a potentially much larger development scenario in East Melville. While there is no guarantee an agreement will be reached, the Company has confirmation that XDIP is willing to consider a three-party arrangement to better allow for a larger regional development vision and which would contemplate the added value of production from A-B Zone and Tuktu. AEI is currently in discussions with its Feasibility Study Team as to the impact of re-defining the feasibility specifications. Upon further review, all delivery milestones will be updated. The change in scope and shift to a second quarter delivery schedule will also be discussed with XDIP in the context of a potential revised development partnership.
John Gingerich further commented:
"The Company has had discussions with a number of interested parties in respect to acquiring an interest in the Tuktu project, with particular interest in pursuing the DSO potential. While these options remain available to the Company, pursuing a larger scale integrated development solution is believed to provide better shareholder value. Further details will be released as the Company concludes the current discussions/negotiations."
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 its Roche Bay and Tuktu Iron Ore Projects in one of the world's largest developing iron ore districts, the Melville Peninsula in Nunavut. The Ocean-based Roche Bay Project boasts an NI 43-101 compliant resource estimate of over 500 million tonnes outlined within a small portion of the potential 140 km of banded iron formation. A feasibility study for the project's C-Zone is near completion. To date, the Company has delineated over 1 billion tonnes of iron under NI 43-101 among its Roche Bay and Tuktu deposits and continues to explore other targeted deposits in areas to the north, south and west of Roche Bay. A preliminary economic assessment from the Roche Bay deposit alone indicates a potential net present value of US $1.1 billion, and the potential for rapid advancement into development of iron concentrate products. The management team has extensive technical, exploration and Canadian Arctic mining expertise to effectively develop the high quality iron ore opportunities on the Melville Peninsula.
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.
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Contacts:
Advanced Explorations Inc.
(416) 203-0057 x226