FYI Resources and Yuntianhua Group have agreed to advance discussions centred on potential potash production in Laos to more formal joint venture negotiations.
Perth-based FYI signed a Memorandum of Understanding (MoU) earlier this year with the Chinese company which is headquartered in Yunnan Province. The negotiations concern collaboration on resource development and potential production at the Sino-Lao potash project, 40km north of Vientiane, the capital of Laos.
Yuntianhua, via subsidiary company Sino-Lao Mining Development and Investment Co, majority owns the potash project, which includes an established trial potash production facility and infrastructure as well as a significant potash deposit.
The joint venture transaction is conditional upon FYI completing its current due diligence to its satisfaction by May 31 and obtaining all necessary shareholder and regulatory approvals.
Both parties have agreed to use reasonable endeavours to negotiate, finalise and execute the proposed JV agreement.
The Yuntianhua Group is a large chemical and fertilizer manufacturer and supplier which also has numerous and diverse non-core business units and engages in international and domestic trading services, fibreglass products, technology businesses and the supply and marketing of commodities, fertilizers salts and farming products. The group also has a number of strategic relationships with large international companies and international joint venture operations.