Pilot processing plant to help FYI Resources to build HPA plant

FYI Resources declared that it will get help from a pilot processing plant for getting offtake partners and finances to build high purity alumina (HPA) plant.

FYI will build a smaller and cheaper version of pilot plant as part of advance studies into its Cadoux project in Western Australia. The idea is to boost confidence in the company’s design before it commits large amounts of cash to full-scale commercial production.

It will produce HPA products for product testing and off-take negotiations for potential customers, which will also support project financing talks.

Demand for HPA is soaring. The sales which were at US$2 billion in 2015 are now expected to hit US$5 billion in the near future. HPA is used in LED lighting and lithium batteries.

FYI shares which had been ranging between 5.5c and 20.5c over the past years were up by 2 per cent to 6.2c in early trade.

The pilot plant wasn’t actually budgeted for as part of the ongoing Bankable Feasibility Study (BFS) into FYI’s Cadoux project. FYI will pay for it with an advance on its Government R&D tax rebate.

The pilot plant is expected to be completed in the late June quarter. Mr. Roland Hill, FYI managing director, said: “The results of the pilot plant will contribute greatly to the robustness and confidence in the project and its ability for the overall project capital to be financed.”

“The fact that we have also arranged the pilot plant to be financed by an advance on our expected R&D rebate benefits shareholders as there is no shareholder dilution or impact to our capital structure while funding a crucial segment of the project.”