RE: rpdulca......... up to your last post....I don't think that some of the people here have all of their facts straight . The only way AXI can default on the current agreement is if they forget to pay $275k before the end of fiscal 2010.
All that AXI had to do to earn 100% of the project, subject to a royalty, was pay $365,000 cash in 2009, pay $275,000 in 2010 and issue either 4.0 million shares or 6.0 million options exercisable at
.20 per AXI share. They have indicated that they issued the 4.0 million shares and I would assume that they would have paid the $365K during 2009. All that has to be done now is make the 2010 cash payment.
The only time that the $25 or $30 million come into play is when AXI wants to exercise their option to buy out the gross overriding warranty. If they don't excerise by the required dates, the option still stands, but the $35 million price is adjusted for inflation.
You can find the following excerpt from the November MD&A on Sedar.com. The MD&A says the following:
"
On December 5, 2008 the Company announced that it had signed a memorandum of understanding with Roche Bay to acquire Roche Bay's remaining interest, and thus hold 100% ownership interest in the mineral leases comprising the Roche Bay Project. The resulting Definitive Agreement replaces all pre-existing agreements (Amended and Restated Option and Farm-Out Agreement) and amendments made between AEI and Roche Bay. The transaction will merge AEI's previously announced iron nugget plans with the Roche Bay mine joint venture.
Under the terms of the Definitive Agreement, AEI is required to make further payments of $365,000 in fiscal 2009 and $275,000 at the end of fiscal 2010, and the issuance of either 4,000,000 AEI shares or 6,000,000 share purchase warrants with an exercise price of
.20 for the purchase of one AEI share. All future rights to be issued to Roche Bay in accordance with the previous agreement will be cancelled. AEI has been granted an option to earn up to a 100% interest in the Leases, and once the option to acquire has been exercised, AEI may:(a) acquire Roche Bay's interest in the Leases and claims (or “project lands”) subject to: (i) a retained 4% gross overriding royalty (“GOR”) on iron products (such as nuggets) having greater than 90% iron content, (ii) a 6% GOR on iron products (such as concentrates and pellets) having less than 90% iron content, and (iii) a 10% gross overriding royalty on byproduct precious metals (the "Royalty"); or
(b) purchase Roche Bay's interest in the Leases (see above) outright, and terminate the Royalty if effective, for a lump sum payment of $25,000,000 on or before March 15, 2010 or $30,000,000 after March 15, 2010 and on or before
March 15, 2011; (the "Royalty Purchase Option").
If this Buy-Out Option is not exercised, AEI will thereafter have the right to buy out 50% of the Royalty (other than the precious metals royalty) before June 30, 2020 for a total payment of $35,000,000 plus an inflation adjustment, allowing the Company to effectively reduce the gross overriding royalty on iron products to 2% on nuggets and 3% on concentrates/pellets, respectively.
On April 1, 2009 the Company announced that it completed the Definitive Agreement of the MOU announced on December 5, 2008. The Definitive Agreement has been approved by the TSX Venture Exchange and the 4,000,000 Company shares that form part of the additional payments were issued. The Definitive Agreement replaces the Amended and Restated Option and Farm-Out Agreement dated May 30th, 2007 between AEI and Roche Bay."