Advanced Explorations (TSX:V.AXI, Stock Forum)(“AEI”), a Toronto-based development stage firm engaged in the acquisition, exploration and development of mineral resource properties, announced today that the company inked a memorandum of understanding (MOU) with Parkson Star for the joint development of its Roche Bay iron ore project to bring it to production.
According to the news release, AEI will initiate the formation of a wholly-owned subsidiary named Savik Iron Mines in a mutually agreed jurisdiction. Then after necessary approvals have been granted, the company will transfer its interests in the Roche Bay and Tuktu projects to Savik.
After Parkson has made certain capital funding injections into Savik and completed certain capital funding requirements, Parkson shall possess a 20% interest in Savik as free carry until the substantial completion of the mine and attainment of first commercial production.
Also under the agreement, AEI will assign $13.3 million in corporate debts to Savik, including the outstanding convertible debentures currently held by XinXing Ductile Iron Pipe Co., along with any accrued interest on said debentures.
A definitive JV agreement will be signed once due diligence has been satisfied and the capitalization and formation of Savik has been completed.
The transaction has yet to be approved by shareholders of AEI and is also subject to regulatory approval.
AEI was in the news recently when the company announced Eric Guo as CEO at the end of March.
Shares climbed 7.69% on the news to $0.07 per share.
Currently there are 196.7m outstanding shares with a market cap of $13.8 million.