DISCUSSIONS are ongoing between FYI Resources and China’s Yuntianhua Group (YTH) regarding the Sino-Lao Potash Project joint venture. The companies are continuing to refine a common development strategy on the project and to explore various equity, expansion, production and capital expenditure options.
FYI and its legal team have made a number of visits to Laos and Kunming, China, this year and the key negotiating points between the parties remain the joint venture structuring and the valuation of various components of the project.
Ultimately, the final decision on any joint venture agreement will be subject to approval from the Chinese State owned Assets Supervision and Administration Commission (SASAC), which is charged with the responsibility of preserving and enhancing the value of state-owned assets and has final oversight on the transaction terms and conditions.
In its Q1 report, ASX-listed FYI advised that no field work was undertaken during the quarter while the high-level JV discussions are progressed and that due diligence on the project, which is owned by YTH, is still to be finalised.
The company did, however continue its internal reviews of the Sino-Lao project and assessing of the extensive technical information to determine the array of possible development option schedules and capital requirements in order to recommence operations.
The company’s Sino-Lao due diligence review aims to verify deposit quality and evaluate the overall development potential.
As well as continuing JV discussions and due diligence, during the remainder of 2017 FYI aims to review selected components of the database, and undertake metallurgical studies and process design in respect to the unusual deposit characteristics.
FYI’s managing director Roland Hill met with the Deputy Prime Minister of Laos, Dr Bounthong Chitmany, informally in Melbourne, earlier this year with a number of other delegates involved in the Lao mining and mining services sectors to discuss the various issues facing the industry and separately, private lobbying for FYI’s potash interests.
FYI considers the South East Asian potash sector to be of world-class standard and it continues to review potential commercial opportunities.