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Summary
- FYI Resources Limited (ASX:FYI) has extended the exclusivity agreement signed with Alcoa for one month.
- Initially, the agreement carried an exclusivity period of 90 days.
- FYI aims to establish itself as a leading high purity alumina producer amid escalating demand for HPA as the EV market gains traction.
Shares of FYI Resources Limited (ASX:FYI) on Wednesday surged 8.77% at AU$0.620 per share during the intraday trade following a significant announcement related to its HPA project.
In an upbeat market update, FYI announced that it has agreed to extend the Exclusive Agreement with Alcoa for an additional period of one month. Both the companies had inked the three-month Exclusivity Agreement on 5th May 2021 regarding a possible joint venture for the Company’s HPA project development.
Alcoa is the world's leading producer of alumina with an installed refinery capacity of over 17 million metric tons a year.
Related Article: FYI Resources (ASX:FYI) inks exclusivity agreement with Alcoa, Shares up
On the other hand, FYI envisions to position itself as a leading and fully integrated high purity alumina producer amid surging demand for HPA in the burgeoning electric vehicle and LED markets. The Company intends to become a significant producer of 4N and 5N HPA by adhering to high ESG and low carbon emission standards.
Must Read: FYI Resources (ASX:FYI) Pilot Plant Trial with Alcoa Meets Expected Operating Parameters
Extension of Exclusivity Agreement
The previously signed agreement had an initial exclusivity period of 90 days, which has now been further extended by a one-month period. Both FYI and Alcoa had mutually agreed to conduct due diligence to establish the technical and commercial feasibility to form a joint venture for the development and commercialisation of the HPA project.
Having completed due diligence, both parties have made a substantial progress regarding negotiations for the formation of a possible joint venture.
The two companies are currently assessing the following factors based on the scope and content of the project:
The extension of the agreement is intended to complete the above-stated tasks as well as to facilitate the completion of negotiations and the drafting of a binding term sheet.
Relevant Read: FYI Resources (ASX:FYI) and Alcoa Advancing on HPA Project Development Activities
The intent of both the companies to ramp up the project development as outlined in the original MoU remains unaltered and doesn't get affected by this extension.
MoU between FYI and Alcoa
The exclusivity agreement signed between FYI and Alcoa is in line with the Memorandum of Understanding signed between both parties in September 2020. The MoU was intended to investigate the possible joint development of the FYI's innovative HPA project for commercialisation.
Also Read: FYI Resources (ASX:FYI) and Alcoa Advancing on HPA Project Development Activities
Additionally, the MoU also established a pathway to progress a possible joint venture followed by the successful completion and satisfaction of negotiations which were mutually agreed upon between both the parties.
Suggested Read: FYI Resources makes significant moves at HPA project, reveals June quarter report
