Advanced Explorations Provides Update on the LNG Power Generation Option at Roche Bay
TORONTO, ONTARIO -- (Marketwire) -- 03/01/13 -- Advanced Explorations Inc. (the "Company" or "AEI") (TSX VENTURE: AXI)(FRANKFURT: AE6) today provided an update on its plans to implement alternative power solutions as part of its Roche Bay development plan. The unique coastal location of the Roche Bay project affords the Company the opportunity to utilize a turnkey, modular LNG power and distribution solution with the potential to reduce both AEI's associated capital requirements while still capturing significant operational savings. These solutions have substantial benefits for the Roche Bay economics, and likewise can be applied to meet the challenges of Canada's northern resource developments and remote communities. As such, the companies that have been engaged in developing these solutions are anticipated to leverage their knowledge and experience across the North to encourage economic growth and competitiveness for other remote mines and Northern communities.
Studies to date indicate that the significant operational benefits both in environmental impact (approx. 40% reduction in CO2 emissions) and operating cost for LNG based power (technical studies indicated potential $8/t savings reducing the total FOB cost to approximately $42/t). These operating cost savings afford the company the opportunity to tradeoff a turnkey power solution for long-term operating cost while still retaining a net benefit to operating margins. Other resource companies are now evaluating LNG based power as there are both advanced turnkey power production and supply and storage models being developed. As currently contemplated, AEI plans to conclude partnership agreements that will include joint LNG feasibility studies (power and LNG supply) based on delivery of a turnkey power solution.
There are two independent partnerships being negotiated. The first partner would be granted the exclusive right to build and operate the LNG power facility should turnkey trade-off studies justify the benefits to AEI. The second, would provide an LNG supply and storage concept as a turnkey solution to complement the LNG power plant. Given there are business sensitive details associated with these negotiations, details will be released as permitted once agreements have been finalized. Additional news is expected in the near future.
Supplemental Wind Power
Studies provided by ArcStar Energy ("ArcStar") have demonstrated that the wind regime at the site is one of the best it has seen anywhere in the world. The initial economic evaluation for Roche Bay was done on a turnkey wind power solution whereby ArcStar Energy would capitalize the wind power facilities on a long term power purchase agreement at an approximate 40% discount to diesel power. Since completing its initial report, ArcStar has further evaluated technical and operational challenges and satisfied themselves that a turnkey solution can be delivered upon verification of the wind regime which is needed for ArcStar's financing requirements. Wind energy can only be viewed as a means of delivering supplemental power, and in the initial study the business case was done as a diesel displacement benefit estimated to reduce consumption by 30%. This plan can also be incorporated into the LNG option as wind delivered power will reduce consumption of non-renewable LNG, offering a possible hedge against rising future LNG prices. The results from Arcstar's work may provide an updated perspective on the use of supplemental wind power as a broader solution for northern development.
The company is extremely proud being an industry leader in moving resource development towards executable, sustainable power solutions which provide a broad range of social economic benefits to the north. AEI believes these alternative power initiatives are both economic solutions for remote resource projects and communities and have the opportunity to contribute economic competitiveness and improved environmental stewardship to remote Northern mines.
John Gingerich, President & CEO, commented:
"We are confident that AEI and its stakeholders are at the forefront of the inevitable conversion from Arctic Diesel towards LNG and supplemental wind power for resource projects in the Far North. By working with developers on turnkey delivery models, this will provide additional options for communities and developers wishing to avoid the onerous infrastructure burdens when affordable power is the only real objective. AEI believes it will be able to capture the first mover benefits generated by having motivated partners with a long-term regional focus in mind. We are convinced that the success of our alternative power initiatives will provide a long term sustainable advantage for all stakeholders."
ON BEHALF OF THE BOARD
John Gingerich, President & Chief Executive Officer
ABOUT Advanced Explorations Inc.
Advanced Explorations Inc., based in Toronto, Ontario, is a resource development company focused on developing its Roche Bay and Tuktu Iron Ore Projects in one of the world's largest developing iron ore districts, the Melville Peninsula in Nunavut. The Ocean-based Roche Bay Project boasts an NI 43-101 compliant resource estimate of over 500 million tonnes outlined within a small portion of the potential 140 km of banded iron formation. A positive feasibility study for the project's C Zone revealed a net present value of $642M on a base case 5.5 Mtpa start-up concentrate operation and substantial upside potential including becoming a low quartile cost producer. To date, the Company has delineated over 1 billion tonnes of iron under NI 43-101 among its Roche Bay and Tuktu deposits and continues to explore other targeted deposits in areas to the north, south and west of Roche Bay. The management team has extensive technical, exploration and Canadian Arctic mining expertise to effectively develop the high quality iron ore opportunities on the Melville Peninsula.
This news release also includes forward-looking statements that involve a number of risks and uncertainties. The information reflects numerous assumptions as to industry performance, general business and economic conditions, regulatory and legal requirements, taxes and other matters, many of which are beyond the control of the company. Similarly, this information assumes certain future business decisions that are subject to change. There can be no assurance that the results predicted here will be realized. Actual results may vary from those represented, and those variations may be material.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
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Contacts:
Advanced Explorations Inc.
(416) 203-0057 x320