Altech Chemical Limited, formerly known as The Australian Minerals and Mining Group Limited (AMMG), has announced the signing of a Memorandum of Understanding with Dana Transport and Trading (Dana) for a scoping study into the commercial viability of mining and processing bulk kaolin from the MacRae Kaolin (aluminium clay) deposit. Kaolin is mainly used in ceramic, paper, rubber and coating industries. The cost of the study is estimated at about A $100,000. Key news -Altech guarantees partner funding of a $100,000 bulk Kaolin scoping Study - Option number one for 10 million tonnes of kaolin with a a $1 million rights issue and 2% of gross sales - Option number two for subsequent 10 million tonnes of kaolin, In return for an additional A $1 million rights issue and 2% of gross sales, Altech has granted Data exclusive exercisable rights to mine 10 million tonnes of kaolin from the Company's MacRae deposit (first choice) until 30 September 2015. In exercising the Option, Dana is required to subscribe for a $1,000,000 of Altech's fully paid ordinary shares at a weighted premium of 10% of the average price of the ASX shares traded over the 120 calendar days preceding the exercise date and to pay 2% of the Company's gross sales of future bulk kaolin sales. If Dana exercises its first option, Altech will grant Dana a second option to mine additional 10 million tons of kaolin from the McCree deposit. The second option is exercisable within three months of the first sale of commercial Bulk Kaolin from the MacRae Deposit and, if exercised, Dana must subscribe for an additional A $1,000,000 wholly paid shares of Altech at a weighted premium of 10% to the average price of the ASX shares traded over the 120 calendar days preceding the exercise date. And pay the company 2% of the total sales of future bulk kaolin sales. Dana is a global shipping company based in Athens, specializing in dry bulk shipping, working with diversified dry bulk commodities such as coal, iron ore, grain and small dry bulk carriers. "Dana is proud to have worked hard to finalize this agreement with Altech, "commented Patrick Hosking, Dana's CHIEF Executive Officer. "We believe our investigation will confirm the great potential of the project consistent with the export and long-term supply of shipping services in the high-grade kaolin market." Commenting on the memorandum, Altech's Managing Director, Mr Tan Yiji, explained: "The company remains focused on its high purity alumina (HPA) project and completing the bank feasibility analysis (BFS) for its 4,kt-a-year HPA project in Sungsan, Malaysia. However, it has always been clear to us that the kaolin of the Macrae deposit is attractive to ceramic and paper commodity producers due to its high brightness and whiteness properties, and based on 65 million tons of JORC resources, the capacity of the Macrae deposit far exceeds that of the company planning the HPA project to accommodate the annual demand of 40,000 tons of kaolin. And 10 million to 20 million tons of aggregate bulk kaolin demand after Dana exercises its option." "The structure of the Dana option agreement has the added advantage of providing the company with development capital at a premium per share, which, if exercised, would be applied to the BFS at this stage," he concluded. (HCSP)