FYI Resources Ltd (ASX:FYI) has closed the books on week two of its high-purity alumina (HPA) trial with Alcoa (NYSE:AA) of Australia.
The HPA-producing hopeful is working with Alcoa (NYSE:AA) at its pilot plant facility in Welshpool, WA, where it hopes to one day erect an initial demonstration plant and a fully-fledged, 8,000-tonnes-per-annum HPA production facility.
Following the encouraging operations of the first week trial, FYI has reported the second week of operations has continued, with the pilot plant performing positively and meeting the upper limits of its internal expectations.
The trial run is the second one-week pilot plant operation in a schedule of four separate trials that will be undertaken over an extended program.
Advancing product quality
Commenting on the pilot plant trial, FYI managing director Roland Hill said the extended pilot plant program was performing to plan.
“Not only are we continuing to gain important technical knowledge and learning from the incremental enhancements that we are incorporating into each pilot plant run, but we are also witnessing an increasing trend of operational improvements.
“We expect that this will translate to further advances in product quality and overall project economics.”
In line with the company’s internal analysis procedure, samples from week two of the extended trial HPA product will now be internally checked.
From here, they’ll be submitted for high-level Glow Discharge Mass Spectrometry (GDMS) analysis to EAG Laboratories in New York, which can confirm the inherent HPA grades.
Binding agreement
FYI and Alcoa’s extended trial stems from a binding joint venture term sheet they struck up in early October.
Together, both parties are determined to erect an initial demonstration plant and a fully-fledged, 8,000-tonnes-per-annum HPA production facility, establishing a market-leading high purity alumina business.
Alcoa is expected to front the construction costs linked to the HPA refining project, bringing the asset out of research and development and into reality.
More broadly, though, the term sheet paves the way for a future joint venture agreement — one which will see FYI and Alcoa collaborate to produce HPA for the global market.
Under the term sheet, FYI will own 35% of the HPA project, while Alcoa will pick up the remaining 65% stake.
The asset will come to life over three stages, and each party will fund their share of the capital and development costs based on their holding.
However, Alcoa will also provide extra capital to cover the construction expenses, cementing its 65% interest.