Bauxite Resources Limited signs MOU with Yankuang

Representatives of Bauxite Resources Limited, Yankuang Resources Pty Ltd (Yankuang), and Yankuang Group Company Ltd ('YGL')'), on 21 October 2015, signed a non-binding memorandum of understanding (MOU) recording that they have negotiated a number of proposed transaction documents which, if approved by the respective Boards of Directors of BRL, Yankuang and YGL will see, subject to satisfaction of conditions precedent referred to below:

- The existing Joint Ventures between the parties terminated;

- BRL sell its interests in the Joint Ventures and its 100% owned Fortuna bauxite rights to Yankuang for cash consideration and a royalty right; and

- BRL buy back Yankuang's shares in BRL and cease to be represented on the BRL Board.

Background:

Since BRL's announcement on 19 June 2015, BRL and Yankuang engaged in a formal mediation in an effort to resolve the dispute between them.

The mediation was conducted on 11 August 2015 and was adjourned to enable the parties to explore a proposal under which the joint ventures would be terminated with Yankuang acquiring BRL's interests in the joint ventures and in BRL's 100% owned Fortuna bauxite interests.

Since the mediation was adjourned on 11 August 2015, the parties and their solicitors have been actively engaged in ongoing negotiations which have resulted in them entering into the non-binding MOU.

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