Advanced Explorations Inc.
TSX VENTURE : AXI.H
NEX BOARD : AXI.H
TSX VENTURE : AXI

Advanced Explorations Inc.

June 13, 2008 09:50 ET

AEI Completes Final Agreement with Melville Capital Corporation and Off-take Agreement

TORONTO, ONTARIO--(Marketwire - June 13, 2008) - Advanced Explorations Inc. ("the Company" or "AEI") is pleased to announce that it has completed its formal development agreement (the "Development Agreement") with Melville Capital Corporation ("MCC") and Roche Bay PLC ("RB") for the development of the Roche Bay project. The proposed agreement is currently awaiting regulatory approval.

The Development Agreement

The Development Agreement sets out a comprehensive and collaborative plan to develop and install various infrastructure components that will benefit the Company's project and the local communities. The parties have set out a framework for the development of power generation, advanced processing facilities (pig iron nugget plant, etc.), mining or processing facilities for derivative products (sulphides, gypsum, etc.), as well as lime/cement and aggregate operations. The Development Agreement also includes a number of capital financing rights granted to MCC that are primarily focused on providing debt financing for all non-core (not mine related) infrastructure.

The Development Agreement sets out a process by which MCC can procure an off-take agreement with a Chinese steel company and Timothy R. German, President of MCC, said, "We are excited to be part of this project, and we thank AEI and RB for giving us the opportunity to procure an agreement with a top Chinese steel company for 1 million metric tonnes of off-take per year. This off-take will help us secure a development partner who can further support the Company and the project through to a development phase. We also thank the executive of the Baron Group for their integral role and assistance in the negotiation process."

"Having MCC as a development partner in this business will give us added depth in both local knowledge and financing power while developing these infrastructure items," said John Gingerich, President and CEO of AEI. "When developed, these partnerships will help reduce dilution to AEI shareholders and build a secure path to development."

The Private Placement

The Company expects to complete three successive private placement financings totaling a minimum of $12,000,000 and is pleased to announce that an Aboriginal corporation will participate in the first private placement with an investment of not less than $3,000,000. The private placements are expected to close, subject to regulatory and other approvals, in June, July and September, 2008, respectively. The Company has agreed to the following private placement details:

1. A first private placement financing in the amount of $4,000,000 with participation by an Aboriginal corporation at $3 per share and closing no later than June 27, 2008;

2. The second private placement financing in the amount of $4,000,000 at minimum $4 per share and closing no later than September 30th, 2008;

3. The third private placement financing in the amount of not less than $12,000,000, minus the direct funding provided in the first and
second financings, at minimum $4 per share and closing no later than September 30th, 2008.

Accordingly, the Company hereby wishes to announce it is raising $4,000,000 through a share offering at $3.00 per common share. In connection with the private placement the Company may pay up to 10% in commission in cash, shares or a combination of both.

Convertible Debenture

MCC has agreed to close an unsecured convertible debenture offering that may be drawn upon partially by the Company, or not at all, in the amount of $53,000,000 by the receipt of the Company's preliminary feasibility study (as defined under NI 43-101) or November 1, 2008, whichever occurs first. The convertible debenture is conditional upon the approvals of the applicable regulators and the companies' Boards of Directors. The conversion of the debt to shares is at the discretion of MCC or AEI at a price of $5.50 per share. Failure to provide the convertible debenture will result in the forfeiture of MCC's future financing rights under the Development Agreement.

Capital Financing

The Development Agreement provides MCC the right of first refusal on capital financing related to infrastructure programs. The financing model provides for MCC to undertake development of non-core mining assets under a 15-year lease-to-own agreement. Fundamental to this right is the participation of a locally owned Aboriginal corporation and/or Aboriginal sovereignty trust that will be the vehicle through which the financing is provided. This innovative financing model is commonly used in the financing of long-term power projects and in this situation will be used to provide a greater role and benefit for the Aboriginal communities while significantly reducing the potential up-front financing obligations of AEI.

Mr. Gingerich also commented, "This agreement has been slow in closing because of the complexity of what we have achieved. We are pleased that the agreement covers a number of specific projects for MCC to pursue and develop. With three financings, a Chinese off-take agreement and the insistence of a strong involvement of the local Aboriginal community, it is clear why this has taken so long to complete. The parties involved have worked hard to find consensus on a broad range of opportunities. We are particularly pleased at the progress being made in partnership with MCC to expand the participation and communication with local and regional communities as well as the government in the Roche Bay project."

The Company also announces that pursuant to approval of the executive agreements approved by the Board of Directors following the AGM on June 2, 2008, the Company granted 150,000 incentive stock options at a price of $1.35 share having a 5 year term.

ON BEHALF OF THE BOARD

John Gingerich, President & CEO

ABOUT Advanced Explorations Inc.

AEI, based in Toronto, Canada, is exclusively focused on developing high quality iron ore opportunities. In early 2007 the Company expanded its capabilities in iron ore exploration and development with the acquisition of the Roche Bay iron ore project and strategic management personnel. AEI has the management, technical and exploration expertise and experience to rapidly advance the Roche Bay magnetite project, which was acquired in June 2007, as well as develop new opportunities in the area and globally. The Roche Bay magnetite project is located proximal to a natural harbour which makes it potentially one of the world's premier iron ore opportunities. Shares of the company trade on the TSX Venture Exchange under the symbol AXI. For more information please visit www.Advanced-Exploration.com.

ABOUT Melville Capital Corporation

Melville Capital Corporation is a private equity firm with international relationships to private and institutional funds, strategic industry partners and Aboriginal leadership. The Chairman and CEO of Melville Capital, Mr. Roman Bittman is a prominent Aboriginal Canadian financier and entrepreneur in the resource, environmental remediation and media industries in Canada, the United States and China. He also manages and advises a team that includes senior executives in infrastructure development. Mr. Timothy German, President of Melville Capital, has acted as a consultant and held management positions over the years for both private and public sector resource based companies. Mr. William Thomson is a strategic advisor who has been a senior executive with several national and international public logistics, primary manufacturing and infrastructure companies. Mr. Ernie Belyea is a lawyer with broad management experience and is currently senior corporate counsel for the Ontario Power Authority. Jim Antoine, a former Premier of the NWT and Chief of Liidlii Kue First Nation, has strong relationships with senior levels of territorial and federal governments and leaders in First Nations, Inuit and Aboriginal communities and businesses across Northern Canada.

THE TSX VENTURE EXCHANGE HAS NEITHER APPROVED OR DISAPPROVED OF THE CONTENTS HEREIN.

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 of 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.

Contact Information

  • Advanced Explorations Inc.
    John Gingerich
    President & CEO
    (416) 203-0057