Advanced Explorations and XinXing Ductile Iron Pipes have inked a deal to further explore and develop Advanced Explorations’ Tuktu 2 project.
The deal gives XinXing Ductile Iron Pipes the right to earn a 50% of interest of Advanced Explorations in the Tuktu 2 project by making a total investment of $20 million in three stages, and Advanced Explorations will receive an initial payment of $5 million secured by a two-year, non-interest bearing convertible debenture.
These funds will be used by Advanced Explorations to start a drill program on the Tuktu 2 project to explore its direct-ship ore (DSO) potential. If the program results call for further exploration, XinXing Ductile Iron Pipes will invest additional $5 million and $10 million in the Tuktu 2 project. The focus of the Tuktu 2 exploration work will be the analysis of the range of any DSO resources, with the completion of a Tuktu 2 feasibility study as the ultimate objective.
As per the contact, a 50:50 joint venture will be formed to develop the potential Tuktu 2 iron ore asset upon conclusion of XinXing Ductile Iron Pipes’ investment commitments and upon assessment of the progression of a Tuktu 2 feasibility study. However, the proportionate stake of the parties in the Tuktu DSO joint venture will rely on detected minimum resource thresholds (measured and indicated). Moreover, XinXing Ductile Iron Pipes will receive preferred off-take rights from Advanced Explorations in proportion to its earned interest in the Tuktu DSO joint venture. The boards of both companies have approved the agreement, which is now waiting for approval from TSX Venture Exchange.
Source: http://www.advanced-exploration.com
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