November 02, 2012 21:05 ET
Advanced Explorations Inc. Completes $5,000,000 Private Placement
TORONTO, ONTARIO--(Marketwire - Nov. 2, 2012) - Advanced Explorations Inc. (TSX VENTURE:AXI)(FRANKFURT:AE6)(the "Company") announced today that it has completed its previously announced $5,000,000 convertible debenture private placement with XinXing Ductile Iron Pipes Co. Ltd. ("XDIP"). In connection with the Framework Agreement entered into between the Company and XDIP, as described in the Company's August 21, 2012 press release, the Company has issued to XDIP a $5,000,000 principal amount convertible debenture (the "Debenture"). The Debenture is non-interest bearing and matures on November 5, 2014 (the "Maturity Date").
Subject to the terms and conditions of the Debenture, XDIP shall have the right, at its option, upon the earlier of: (a) the completion of a feasibility study (within the meaning of National Instrument 43-101 - Standards of Disclosure for Mineral Projects) with respect to Tuktu Project (Zone 2); and (b) the Maturity Date, to convert all, but not less than all, of the principal amount of the Debenture into fully paid and non-assessable common shares of the Company. The conversion price per common share shall be an amount equal to the greater of: (i) the volume weighted average trading price of the common shares on the TSX Venture Exchange during the 10 trading days prior to the date of conversion multiplied by 90%; or (ii) $0.25.
Alternatively, subject to the provisions of the Framework Agreement (including the requirement that the XDIP make investments in the Company in the aggregate amount of not less than $20,000,000), XDIP shall have the option to convert the principal amount of the Debenture into an equity interest in a joint venture to be created between XDIP and the Company for the development of the Tuktu Project (Zone 2) (the "Tuktu Zone 2 JV"). The conversion of the principal amount of the Debenture into an equity interest in the Tuktu Zone 2 JV will be subject to TSX Venture Exchange approval and also disinterested shareholder approval.
As the Company's primary strategic partner, XDIP currently holds approximately 13% of the outstanding common shares of the Company. Unless disinterested shareholder approval is obtained in accordance with the applicable policies of the TSX Venture Exchange, XDIP shall only be permitted to convert that portion of the principal amount of the Debenture into common shares such that, immediately following such conversion, XDIP will not hold greater than 19.9% of the then outstanding common shares of the Corporation (on a non-diluted basis).
All of the securities issuable in connection with the Offering will be subject to a hold period expiring four months and one day after the date of issuance of the Debenture.
The Company also wishes to inform its shareholders that it received notice this week that a Statement of Claim has been filed with the Ontario Superior Court of Justice. The claim arises out of an alleged finder's fee agreement with Storm Capital Corp. ("Storm"). Storm is seeking to have the matter subjected to arbitration. The Company has retained legal counsel and believes that it has meritorious defenses to this action and intends to vigorously defend such action.
ON BEHALF OF THE BOARD
John Gingerich, President & Chief Executive Officer
ABOUT Advanced Explorations Inc.