Kuncai Technology: Signed a letter of intent for the investment framework agreement of the vanadium and titanium resource base project

Recently, Fujian Kuncai Materials Technology Co., Ltd. (hereinafter referred to as the "Company") signed the "Letter of Intent for the Investment Framework Agreement of the Vanadium Titanium Resource Base Project" (hereinafter referred to as the "Framework Agreement") with Zhangzhou Municipal Bureau of Commerce and International Resources Limited in Johannesburg, South Africa. According to the company's development strategy, the company intends to establish a joint venture with International Resources Limited to exploit the resources of the Mapochs mine in South Africa acquired by International Resources Limited, and plans to rely on the port resources of Zhangzhou City to import the raw materials needed by the company and carry out raw material-related research and development and manufacturing business locally. The project is expected to achieve an annual throughput of 10 million tons and supporting mineral processing project investment in 2025, and an annual throughput of 60 million tons in 2030, and can produce 50 million tons of high-grade iron ore, 5 million tons of high-grade titanium concentrate, and 100,000 tons of vanadium pentoxide.

Main contents of the framework agreement

Party A: Zhangzhou Municipal Bureau of Commerce

Party B: Fujian Kuncai Materials Technology Co., Ltd.

Party C: International Resources Limited

1. Background and objectives of cooperation

Zhangzhou is located on the southeast coast of China, with superior resources. It is connected to the Yangtze River Delta Economic Zone in the north and the Guangdong-Hong Kong-Macao Greater Bay Area in the south. It has a convenient three-dimensional transportation network by sea, land and air. It has 2 deep-water ports and 5 national first-class open ports, with an annual throughput of more than 70 million tons.

Founded in 2012, International Resources Limited is headquartered in Hong Kong, China. It manages businesses around the world and has branches around the world. Its main business areas are financial investment, resource development and industrial investment, including new energy and new materials. In September 2017, International Resources Limited successfully acquired the Mapochs Mine, the world's largest single mine and the one with the highest vanadium grade, through a global public bidding auction.

As a high-tech enterprise specializing in material research and development, production and sales, the company's wholly-owned subsidiary Zhengtai New Materials Technology Co., Ltd. used the world's first extraction method to prepare high-purity titanium dioxide and iron oxide, and obtained the first set of process technology certification and a number of domestic and foreign invention patents.

Relying on their respective advantages and resources, and in line with the principle of "complementing each other's strengths, mutual benefit and common development", the three parties reached a cooperation intention on Party B and Party C establishing a joint venture and investing in construction projects in Party A's region, effectively integrating the three parties' industrial, geographical, and resource advantages, and comprehensively deepening the comprehensive development and utilization of vanadium and titanium resources.

(II) Cooperation Content

1. Overview of the joint venture partner's proposed investment project

Party B and Party C intend to establish a joint venture company to exploit the resources of the Mapochs mine, and intend to rely on Party A's terminal and port resources to import foreign new materials required for Party B's project and carry out new material research and development and manufacturing business locally. The project is expected to achieve an annual throughput of 10 million tons and supporting mineral processing project investment in 2025, and an annual throughput of 60 million tons in 2030. It can produce 50 million tons of high-grade iron ore, 5 million tons of high-grade titanium concentrate, and 100,000 tons of vanadium pentoxide. After the project is implemented, it can effectively drive the development of the local industrial chain and the business growth of the terminal company, improve the foreign trade import and export indicators of the development zone, and promote the organic integration and development of port-industry-city.

2. Commitment

The three parties jointly promised: Based on the principle of mutual benefit, the three parties will work closely together to carry out early market research, feasibility study plan preparation and other work to accelerate the implementation of the project.

3. Other Agreements

1) During the validity period of the agreement, if the agreement cannot be performed in part or in whole due to force majeure such as natural disasters, the three parties shall not bear any liability for breach of contract.

2) For matters not covered in the Agreement, the three parties may formulate a supplementary agreement as an annex to the Agreement.

3) The agreement shall come into effect on the date when it is signed and sealed by Parties A, B and C, and shall be valid for 1 year.

4) The Agreement only serves as proof of the intended cooperation between the three parties. The specific terms of the cooperation shall be subject to the relevant contract documents signed by the three parties.