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MELVILLE PENINSULA
Mary River isn't the only iron ore project making waves in Nunavut.

Advanced Explorations Inc. has signed an agreement with a Chinese iron company over the iron deposits, pictured here in a sample, from its Tuktu 2 project. - photo courtesy of Advanced Explorations Inc.

In addition to a recently completed feasibility study for its Roche Bay iron ore project, Advanced Explorations Inc. -- which boasts that it is developing the country's newest iron district at tide water -- has also just signed an agreement with a Chinese iron company to explore the iron deposits from its nearby Tuktu 2 project.

"Almost all the developments in Canada now have been driven and supported in part by the Chinese investments," said John Gingerich, president and CEO of Advanced, adding that China is the biggest global consumer of iron ore by a substantial amount.

"Being that they are the most important consumer, it means that they are more intimately involved in helping develop and coordinate supply.

"So it works both sides of your ledger. You've got the capital resources to build and you've got sort of a guaranteed buyer on the other end."

Xin-Xing Ductile Iron Pipes Co. Ltd., plans to invest up to $15 million in exploration and development of the Tuktu 2 project, which is demonstrating mineralization that can be considered for direct-ship ore, Gingerich said.

Tuktu 2 could be a satellite project to Roche Bay, he added, which is also supported by Xin-Xing, and exploration being scheduled for this year will give a clearer picture of the potential of the property later on this year.

The location of Roche Bay, about six to eight kilometres from tidewater, is the most important part of the feasibility study which was recently completed Gingerich said, in addition to the potential to expand the estimated life mine considered with more drilling, to 25-plus years, from 15.

"There's not many projects that Mother Nature places sort of right at the ocean," Gingerich said. "So even despite the Northern location, they could be very competitive in the market when you have that ocean location.

"If you look at the rest of the Canadian mines, they all need railroads. This one doesn't. Not having a railroad to operate, that provides significant advantage to our project.

"So the two very important points (of the feasibility study) is the low cost and the ability to expand resources."

Exploration done on the Roche Bay site in past years has seen up to 40 people working seasonally from the communities of Hall Beach, Iglulik and Rankin Inlet, Gingerich said.

The proposed mining operation would employ about 400 people once fully developed and running, he added.

The target date to have permitting and impact benefits agreements in place to start construction at Roche Bay is 2015/16.

Advanced is completing its environmental impact statement and has formed committees and held community meetings to keep people informed about the project, Gingerich said.

"We've certainly been continuously engaging our local communities to keep them fully informed as to what may or may not take place at the project and whether or not the development scenarios we discuss are supported and consistent with what the communities feel is important," he said. "So far we've had great support."

Earlier this year, the Toronto-based company also entered into a partnership with the Government of Nunavut to look into lower cost alternative power solutions to Arctic diesel, including the possibilities of liquid natural gas and wind power technology at Roche Bay. The LNG option would save about $8 per tonne in operating costs, according to the feasibility study.

Baffinland Iron Mines Corp.'s proposed multi-billion dollar Mary River iron ore project is currently under review by the Nunavut Impact Review Board.

Shares of Advanced Exploration Inc. trade on the TSX Venture Exchange.

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