Roche Bay plc is an iron ore lease-holding company with properties on the Melville Peninsula in Nunavut, Canada.
In 2007, Roche Bay plc signed a joint venture agreement with Advanced Explorations Inc. to develop its Eastern properties on the Melville Peninsula, including the Roche Bay Project. Advanced Explorations currently owns 75% of the joint venture and holds an option to complete a full earn-in or purchase of a 100% interest in the project by December 31, 2015.
Regardless of ownership percentage, Roche Bay also holds a 4% gross overriding royalty (GOR) on iron products having greater than 90% iron content, a 6% GOR on iron products having less than 90% iron content and a 10% GOR on byproduct precious metals. AXI has two alternative royalty purchase options which would allow it to reduce the royalty rates to as low as 2% (other than the precious metal royalty, which is to remain at 10% in perpetuity), no later than December 15, 2020.
On September 27, 2010, Advanced Explorations entered into a strategic agreement with XinXing Pipes Group Co., Ltd., a Chinese state-owned enterprise. XinXing Pipes gained a 14% stake for agreeing to fully fund the Roche Bay Project to production, and will provide up to $1 billion in capital to build out the project.
On August 10, 2012, Advanced Explorations released the results of a positive feasibility study on the C Zone of the Roche Bay Project. The study envisions a 5.5 million tonnes-per-year start-up production rate based upon the Indicated resources of 501MT @ 26.53% Fe. The project has a pre-tax NPV (8%) of $642m and an IRR of 16%. It is important to note that this study only considered the indicated resources of the C Zone and not the more speculative resources of the A/B Zone, D Zone, E Zone and F Zone. Advanced Exploration believes that further drilling to produce measured and indicated resources for these zones could significantly enhance the mine life and economics of the project.
AXI’s 2013 Milestones
Independent geoscientists conclude there exists DSO potential at both Roche Bay and Tuktu projects
Identified high-priority structural and geologic targets that warrant further evaluation for their DSO potential
AXI’s 2012 Milestones
Published first Feasibility Study
Continued relationship-building with Inuit community
– Shandong Fulun Steel exercises right to off-take agreement on Roche Bay Project
– Draft Feasibility Study
– AXI closes $5.3 million strategic investment by XXP
– AXI enters into agreement with Shandong Fulun Steel Company, where Fulun Steel can earn the right to 19% of the off-take on iron products
– AXI and XXP execute formal agreement to develop Roche Bay Project
– Signs MOU with XXP for proposed strategic partnership, where XXP can acquire a significant interest in AXI and/or the Roche Bay and Tuktu projects