Nunavut
IRON – Advanced Explorations Inc. March 5 said it has engaged ICBC International Capital Ltd. as its lead financial advisor in Hong Kong for the purpose of a proposed capital financing for a joint venture to be set up by Advanced Explorations and XinXing Ductile Iron Pipes Co. Ltd. for the Roche Bay iron project in eastern Nunavut. Advanced Explorations has engaged ICBCI to assist its preparation for a valuation, based on the valuation report to be issued by relevant third-party independent technical experts. ICBCI also will explore with the JV partners the feasibility of consolidating all Advanced Explorations’ iron ore assets (Tuktu, Tuktu-2 and Roche Bay) in Nunavut as part of asset injection into the proposed joint venture. Should this proposal be accepted, an expansion of the financing structure would be required along with a revision to the framework agreement between the JV partners. Advanced Explorations has concluded this engagement with the consultation and support of XinXing. ICBCI’s primary focus is to work within China’s regulatory and financing framework to secure the proposed capital financing. ICBCI is a subsidiary of the Industrial and Commercial Bank of China Ltd., one of the world’s largest banks by capitalization. Given the breadth of ICBCI’s expertise, Advanced Explorations and XinXing will benefit greatly from the advice and development scenarios presented by ICBCI. With global markets substantially discounting resources projects, these advisory services allow an external party to properly value Advanced Explorations’ assets and to put a definitive financing solution in place. The company has been focused on optimizing the feasibility study to further reduce capital and operating cost. Recent announcements with respect to port and LNG power partnerships are but two examples that will have a positive impact on the project financials. Further optimization of the Roche Bay development plans include updating the expected project revenues based on a higher grade concentrate (>68 percent iron) than was used in the feasibility study and to expand the measured and indicated resource base to support a mine life greater than 25 years. The larger resource base will also allow AEI to model a development scenario at an 8 million-metric-tons-per-annum startup which, through improved economy of scale, should further reduce the per-metric-ton FOB operating cost. ICBCI will assist Advanced Explorations in providing the associated updated financial models in connection with the proposed capital financing. Advanced Explorations President and CEO John Gingerich commented: “We are extremely pleased to conclude the engagement with ICBCI that follows from 10 months of discussions on the various strategies/plans in respect to the proposed capital financing for the Roche Bay AEI-XDIP mine plan and potentially larger regional development scenarios. Through this process, a strong working relationship has evolved between the ICBCI and AEI teams. … By engaging one of the world’s largest banks, which has an institutional investor client base in China, AEI will have solid financial guidance so as to move ahead on an expedited basis. We believe this relationship to be the jumping off point from which we can regain significant market capitalization.”
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