Advanced Explorations Inc.

Advanced Explorations Inc.

September 27, 2010 11:52 ET

Advanced Explorations and XinXing Pipes Group Execute Formal Agreement to Develop Roche Bay Project

TORONTO, ONTARIO--(Marketwire - Sept. 27, 2010) - Advanced Explorations Inc. (the "Company" or "AEI") (TSX VENTURE:AXI)(FRANKFURT:AE6) is pleased to announce that it has completed and executed an agreement (the "Agreement") with XinXing Pipes Group Co., Ltd. ("XXP") 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. ("XDIP") and its affiliate China Huaxin International Trade Co., Ltd. ("HIT"). XDIP and HIT have jointly agreed to acquire 19% of AEI's issued and outstanding stock at a price of $0.25 per share and valued at approximately $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 ("DFS") 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 $20,000,000 to the Roche Bay JV to complete the DFS and a further $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 $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.

John Gingerich, President & CEO, commented:

"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.


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 Iron Pipe Co., Ltd., 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 Iron 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.


Contact Information

  • Advanced Explorations Inc.
    (416) 203-0057 x226