Eastern Iron Ltd has announced the signing of a binding strategic partnership agreement with Ya Hua International Investment and Development Co. Ltd (Yahua), a wholly-owned subsidiary of Sichuan Yahua Industrial Group Co. Ltd (Yahua Group), to provide a framework for the companies’ future collaboration in relation to the potential acquisition and development lithium projects.
Yahua is a substantial shareholder of the company (refer to announcement dated 22 October 2021). This partnership will formalise the existing strong relationship between Yahua and the company and provide a more strategic focus on the potential acquisition and development of further lithium projects.
Yahua Group is one of the most experienced lithium salt producers in China, and its subsidiaries have more than 20 years’ history of lithium salt production. The partnership will provide Eastern Iron a solid framework for co-operation with Yahua on joint acquisition and development of lithium projects, which extends to establishing for Yahua a first right of refusal for an offtake agreement for spodumene concentrates products which may be produced from any such lithium projects.
Yahua Group’s Managing Director, Xin Gao, stated: “We are excited to be working with Eastern Iron, who we believe is likely to be a strong source of spodumene concentrates in the future. We see many potential cooperation between us on acquisition and development of lithium projects and look forward to exploring a deeper relationship over time.”
Eastern Iron Chairman, Eddie King, added: “Following Yahua’s substantial investment in EFE, the strategic partnership agreement with Yahua is a transformational agreement for the company and should be an exciting phase for all stakeholders involved with Eastern Iron. The strategic partnership agreement provides the company with an advantage to acquire and develop lithium projects as we seek to strengthen our position in providing green energy solutions for future generations.”
Key terms of the strategic partnership agreement include:
- Yahua and Eastern Iron wish to establish a long-term strategic partnership for the supply of spodumene concentrates, and the potential acquisition and development of spodumene projects.
- Yahua and Eastern Iron wish to co-operate in respect of the acquisition and development of spodumene projects in Australia and in other countries (other than China or any country in Africa). The parties agree in principle that:
- A joint venture (JV) will be established either prior to the company acquiring a spodumene project, or when the company completes an agreed amount of work on a spodumene project.
- Each party has the right to invest in and develop spodumene projects without involving the other, but must offer the other party a first right of refusal on participation in a JV if it chooses to seek a JV partner.
- On completion of Eastern Iron’s acquisition of the Trigg Hill Project and the definition of an initial exploration target for Trigg Hill (which has not yet occurred), the parties wish to establish a JV for the exploration and development of Trigg Hill. The parties’ respective interests in the Trigg Hill JV are yet to be agreed.
- Yahua will be granted a first right of refusal on offtake of spodumene products from any of the JV projects, including the Trigg Hill Project once the Trigg Hill JV is established.
- The company has an option to enter into a long-term offtake agreement with Yahua in respect of spodumene products produced from other projects owned by the company, but which are not subject to any of the JVs.
- Any further transactions pursuant to the strategic partnership agreement remain subject to formal agreement.
Read the article online at: https://www.globalminingreview.com/finance-business/18112021/eastern-iron-enters-strategic-partnership-agreement-with-yahua/