Advanced Explorations Inc. ADEXF

re: PR

[abdikens]

Murray Mac, Venman, R.P., when you decipher the Pres Release, could you please summarize it so that us plain folk can understand. In other words, put it in contempory, i.e. non-legalize, English. Thanks Guys. Andrew

[rpdeluca]

Hi Andrew: I'm just getting back from a week's vacation and saw the release yesterday (in Chinese).  We have to wait for the official press release from AXI today but from what I can tell, it looks like Xinxing (our partner) has enterered into a framework agreement with AXI which is going to prove out Tuktu 2 (note the reference to Tuktu 2 as this is the area of Tuktu which has DSO

[Kadillac]

Looks like potential of $20 million in investment to take 50% of Tuktu.  Sounds like it is like a convertible debenture so not actually giving funds but more of a loan (investment).   I guess the way the markets are, the deals are not as good for financing these days. 

[Kadillac]

Tracker,   Balance does not say it is theirs to pay for.  It says it is an investment so could be another convertible debenture again. I don't like the deal for AXI.  Giving away 50% of the project for a convertible debenture. What do others think?  RP, Murraymac

[rpdeluca]

They are not giving away 50% of the project for only $5 million.  They would have to go through the entire 3 phases and then sign a JV agreement before any perecent in ownership is confirmed.  Hence a JV is formed once Xinxing has invested $20 million across the 3 phase program

[Kadillac]

Exactly what i said.  They are giving away 50% of the project for $20 million convertible debenture or some sort of debt facility.  So, AXI is giving away 50% of the project to finance them $20 million.  Would have been a better deal if XDIP gave them $20 million cash over the 3 milestones for 50% of the project. 

[rpdeluca]

Not sure where you are reading that the $20 million is all in a CD format.  You are correct in that the first $5 million is a CD but it does not state that the other $15 million is in the form of a CD.  So it's really $5M CD + $15M for 50%....

[Kadillac]

Other $15 does not say convertible debenture but does say investment.  So it is some format similar to CD, loan, etc.  They are not giving away cash and that is my concern.  I think it is due to the way the markets are.  In a good market, AXI would have got straight cash for the 50% investment in Tuktu. 

[abdikens]

Thanks RP. That shook some of the cobwebs away.