TORONTO, June 13 /CNW/ - 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
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.
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.
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
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.
For further information:
For further information: John Gingerich, President & CEO, Tel: (416)