Toronto, Canada-based resource development company Advanced Explorations Inc. (AEI) has announced that it has completed and executed an agreement with state-owned Chinese steelmaker XinXing Pipes Group Co, Ltd (XXP) to form a partnership for the development of the AEI'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). Accordingly, XDIP and HIT have jointly agreed to acquire 19 percent of AEI's shares at a price of $0.25 per share and valued at approximately $5.3 million.
XDIP will earn a 50 percent direct interest in a newly formed joint venture entity, Roche Bay JV, and XDIP will provide $20 million for the venture to complete the definitive feasibility study and a further $30 million of working capital to the Roche Bay JV upon completion of the study.
In addition, XDIP has agreed to provide the necessary financing and development capital for the project to a maximum of $1 billion. In accordance with the agreement, AEI has agreed to provide XDIP with 50 percent off-take from all iron products once the production starts.
The agreement is subject to the approval of the TSX Venture Exchange and other authorities.