Somehow, some have concluded that because XDIP is offering AEI a $5 million interest free loan.....that they have broken their agreement and will not be advancing AEI the $20 million for the completion of the FS.
Personally, I cannot accept this as truth, for there is nothing to substantiate it. To me, this is a simple gesture by one strategic partner [XDIP] to tie over the other partner [AEI], for the completion of the FS, until the JV can be fully executed. It is only because of bureaucratic delays, that has caused this secondary agreement to take place.
Upon my recent discovery of XDIP's [translated] press releases.....it is now clear how the execution of the "framework agreement" is/was to unfold;
1) XDIP will perform their Pre-Feasibility Study [due diligence]
2) submit the findings to the State for necessary approval
3) upon successful approvals, enter into the formal JV with AEI
4) AEI will place the Roche Bay property into the new JV Corporation and will own 71.428%; and XDIP will make an initial contribution of $20 million to the new JV Corporation and will own 28.572% [and said funds would then be drawn down by AEI directly to cover FS costs]
5) upon completion and filing of the Definitive Feasibility Study by AEI, XDIP will then contribute another payment of $30 million to the JV Corporation, giving them 50% ownership [and AEI has the option of receiving another $20 million, based on future profits]
But due to unforeseen delays [of which I believe to be at the State level], AEI found themselves running low on funds as they awaited the formation of the JV and the advancement of the initial $20 million. So as that process is still unfolding, XDIP took it upon themselves to agree to a $5 million debenture, not only to help their partner over this hurdle, but to also give them the vehicle they sought to increase their ownership in AXI stock.....back to the original agreement of 19%.
I suspect that AEI management was not in favor of doing a simple private placement at current stock prices and XDIP concurred. The debenture was a slick move on their part to postpone the placement of shares into the future......at a much higher premium [
.45/share], and XDIP once again, concurred. And seeing as how this JV delay is [more than likely] because of bureaucracy at the Chinese State level, XDIP took responsibility and offered the loan to AEI......interest free.
Personally I cannot find a single piece of evidence that the original "agreement" has been broken, and XDIP's recent press releases state that they are still working to conclude the said "framework agreement". The recently announced Debenture, is a simple "secondary" agreement......as XDIP so puts it!
I truly hope this helps some in better understanding our [shareholder's] present situation.
Many blessings,
Murray