FYI Resources in exclusive talks with Alcoa to bring $1 billion HPA Project to life

FYI Resources Ltd (ASX:FYI) (OTCMKTS:FYIRF) (FRA:SDL) is positioning itself to be a significant producer of high quality, high purity alumina (HPA) in Western Australia, having entered into a nine-day exclusive period for a joint venture negotiation with Alcoa Australia (NYSE:AA) (FRA:185).

Wise-Owl.com has released a research report detailing the strategic significant of the agreement, with outcomes from the negotiations expected to provide a clear path for the HPA project development, funding, operation and product marketing.

The company's Cadoux Kaolin Project has a 3.2 million tonne reserve and a >25yr mine life of aluminous kaolin clay, grading 24.8% aluminium oxide and around 10,000 tonnes per annum of feedstock would be produced via the company's proposed HPA production facility in Kwinana.*"Show of faith by a multinational"*

The report said: "The outcomes of these negotiations should provide investors with much greater clarity on how the project's costs will be funded.

"The JV could arguably prompt analysts to revise valuations due to a dilution in risk metrics surrounding product development and the securing of financing and offtake agreements.

"Making this development even more significant is Alcoa's close involvement with FYI during the testing process and the establishment of an updated DFS - in short, this is a show of faith by a multinational that has an intimate knowledge of FYI and its capabilities.

"With investors now able to place a value circa US$1 billion on FYI's project and a strengthening of its relationship with Alcoa, the company should continue to benefit from positive momentum and has been significantly de-risked."

Notably, the company also has backing for up to A$80 million from Luxembourg-based private equity group, GEM Global Yield LLC SCS which provides capital support for the development of the project, particularly at key funding requirement stages.