Announce some good news, some great news in fact. We obviously had two announcements yesterday, so I'd like to go through high level, the China Minmetals announcement and also the short-term funding transaction from AMR. I'd also like to address the organizational change, which we're currently going through, and also address some Q&A. Now, we've had some questions sent through to us, so we'll address some of those. We can't address all of them, but we'll try to address the ones that are certainly we feel are the most important and that you guys have all shown interest in. Just from the China Minmetals transaction, I'd like to run through that firstly. As you've seen, Highfield Resources signed a non-binding letter of intent with Qinghai Salt Lake, which is a subsidiary of China Minmetals, for a proposed $300 million equity subscription.
These funds are intended to advance the Muga Potash project and pursue other strategic opportunities. It follows the previously announced transformative transaction with Yankuang Energy. Qinghai Salt Lake is China's largest potash producer with significant annual potash production capacity of about 5 million tonnes per annum, and is controlled by China Minmetals, the major state-owned enterprise, so we, in the metals and mining sector. I think most of you will know China Minmetals or otherwise in Australia, known, one of its subsidiaries is MMG that's held various assets over time. It held Century for a while, and has, you know, very large base metals and other Tier 1 assets around the world. They are very, very experienced miners, producers, developers, and with very, very big pockets, which is fantastic. Both these entities bring significant operational experience, advanced technology, and strategic investment capabilities, you know, into Highfield.
The potential $300 million equity injection represents a substantial commitment to Highfield and in particular the Muga project. The Muga project, along with their 5 million tonnes per annum and the Saudi project, create a globally diversified Tier 1 company. They are very focused on making this transaction happen. There are strong mandates within the SOE to expand the diversification and production of potash within Qinghai Salt Lake. The LOI is non-binding, indicating the agreement is subject to further negotiation and due diligence. The Board of Directors and Company's largest shareholder, AMR Capital, have affirmed their strong support to finalizing this deal. Now I'd just like to touch on, and I'll come back to some Q&A around the transaction.
In relation to the AMR facility, I firstly just like to say I can't thank AMR enough for supporting us along the way and providing this facility, which is non-dilutionary, which I know a number of shareholders have expressed concern about further dilution for funding, but this is a pure standby loan facility of EUR 1.15 million, a principal amount of EUR 0.65 million that can increase to EUR 1.15 million in certain circumstances. AMR has also agreed to extend the maturity date of its convertible loan notes to the, to I think it's to the earlier of July 31, 2025, or unless the transaction is consummated with a binding MOU, which extends it for a further 75 days.
I think the reality is behind that AMR has been very flexible in ensuring that that liability is extended and gives us some runway to actually execute this transaction. We're all aligned in terms of trying to close the MMG/ YKE transaction. The loan facility use of funds is for working cap during this strategic period. The terms of the note are a fixed coupon at market rates and a maturity date of six months from first drawdown. I'd now just like to touch on some organisational issues. You would have all seen that Ignacio has resigned from the company. I came here over the weekend and have been with the team for the last three days and am here working through with the whole team.
I have spent time with all of our key employees and some external key stakeholders, including the Navarran government with Olivier and Susana. I have to say that it's all very, very positive. It was fantastic to announce both the China Minmetals transaction and also the funding. I think that there's actually some positive feelings around the change. I have to say that from what I've seen, there's absolutely little to no effect on our progress of Muga, our progress of the Minmetals transaction, and our ability to execute what we're trying to do. We are looking to, you know, make some minor, streamlined changes here over the next few days. What I can assure you is that we have the talent within this team. We don't need to go externally.
We have the talent within this team to take this project through to completion, with China Minmetals and then through to development. Obviously at that point, once we close the transaction, we'll have funding and we'll expand the team to build the Muga mine. Now if we can just move to some of the Q&A. In no particular order, we've received some various questions. I suppose the first one is in relation to the timeline of the $300 million equity subscription. As you can probably appreciate with our dealings with Yankuang, I don't want to say how long is a piece of string, but these things do take time.
Dealing with a state-owned enterprise that has to deal with central SASAC and other regulatory approvals, these things do take a little bit of time. It is currently non-binding, so it means obviously there is further negotiation and due diligence. Olivier, Susana and I received emails this morning about timing for site visits, et cetera, as you would not be surprised, which is next week and the following week and probably the week after that. I do not know how much time I will be needing to spend here, but we will keep the market informed and provide material updates on the timing, and we will let you know as and when we can. We are very happy to be able to announce the LOI.
In relation to that, there's a question around how the LOI compares to the Yankuang Energy transaction. In the event any potential conflicts between that original transaction, which is binding, and the proposed transaction, then Highfield, Yankuang, and AMR intend to negotiate and enter into any required agreement to resolve all obstacles that may impede or delay the progress of the transaction. At the end of the day, I think all parties will be flexible to try and ensure that we can maintain the existing terms of the transaction. Obviously, the Saudi project has a value on it and we'll need to ensure that value sticks. In relation to the terms that we're entered into that surround the value of the Saudi project, we will also be endeavoring to stick to that.
There is obviously some work to be done, along with the diligence. Further on the LOI, what are the key risks associated with this being converted to a binding agreement? Again, as it is non-binding, there is a risk that it may not be reached. As I have said, China Minmetals has an internal mandate to increase the production from 5 million tonnes to a significant amount more. Their plans to diversify globally is absolutely paramount to their objectives. Like with any transaction, if a company has a desire to do it, they will do everything they can to do that. We have seen the way they have moved thus far very quickly since engaging with them.
We're confident there's a lot of work to do. They have some regulatory hurdles to go through. We don't feel that any of the regulatory hurdles are an impediment. We already have, for Yankuang, we already have FIRB and China approval, and we're well on the path with Spanish approvals. We don't see any issues around that. As I said, these things do take a little bit of time. I had a question in relation to Qinghai Salt Lake, and I thought I think we've covered most of it, but, yeah, I think we've covered most of the Qinghai Salt Lake.
I, I sort of in reflection in my introduction, I, you know, I think we've got a list of something like 17, you know, people from Qinghai that are, are looking to come to site. And they are technically very experienced. I mean, they are actually producing 5 million tonnes of potash per annum. There's no one in Australia doing anywhere near that. And, and this is the sort of production that we're seeing out of Saskatchewan, Saskatoon. This, this is a sizable experienced company that has the ability and, and in particular to give you all comfort, the desire to actually make, make this transaction happen. They don't send 17 people that are very technically orientated and strategically operated to site, unless they were committed. That's a little bit more about Qinghai Salt. And look, you, you can, you can jump on China Minmetals website.
I, that's a public website.
It is.
I'm not sure if Qinghai Salt's actually mentioned in there.
No.
No, it's okay. Anyway, as we can, we will share more information as we can in due course. But 5 million tonne producer of potash, 40,000 tonne of lithium carbonate as well. I have touched on China Minmetals. As I said, you can jump on their website and have a bit of a look around that. Regarding Ignacio's resignation and the project continuity, some questions just around how and will this impact the Muga project and or the LOI. The Highfield board and AMR remain absolutely committed to finalizing this deal, as you can hear from my comments, and to the Muga project.
What I do have to say is, every time I come here, I'm more and more impressed with the individuals that we have in this team. It's a great opportunity for all of them to step up. We've had some fantastic meetings over the last couple of days and some what we call town halls. The team's really eager and more than capable of stepping up and, you know, completing the project. As I said, there's no need for change within this organization. We have all the tools and we're going to make sure that this project gets up and running and the LOI moves through to binding.
Paul, it might just be worth saying that you've obviously spoken to Yankuang as well.
Yes, yes.
And explained the situation and as far as we're concerned, that doesn't impact the Yankuang deal in any shape or form.
That's a good point, Ollie. Yes. Before the announcement went out, obviously China Minmetals and Yankuang are fully briefed and understand the change with the CEO and would not have signed the LOI if they did not want to proceed with the transaction. We are comfortable that the team that we have in place is capable of executing this. That is a really good point. Just in relation to that, some questions around is the project still on track despite the leadership change? I think I have addressed that. I mean, yes, obviously still a lot of work to do. You know, I think AMR's got unwavering support for us and the changes, the minor changes we are undertaking at the moment. I think that is sort of covered.
There is a question on the AMR facility just around the purpose. Look, the loan is intended to cover working cap and G&A. It is standby there. We have actually spent quite a bit of time with our finance team and our strategic team focusing on our cash flow going forward. In the last two days, we have actually made some really good progression in understanding our cash flow and trying to extend our runway. We are pretty confident we have got a pretty good runway. Obviously still some work to do around that, but there is some streamlining around our cash that we can do and that is underway. That AMR facility is fantastic because it is standby there. It gives us some security and some confidence to keep going on the path that we are going down.
Some questions on the conditions for the extension of the convertible note. I think, look, all I can read out is that the maturity date will be extended to the earlier of the 31st of July, subject to a 75-day extension if a binding term sheet is entered into with Qinghai Salt Lake by the 30th of June, and the date on which the Yankuang Energy transaction terminates, which, you know, that's not going to happen. You know, that's been fantastic being able to push that out. It's a real positive for us. I think there's just been some questions around AMR support. I'd personally like to say they have been, to provide an unsecured debt security that's non-dilutionary, just shows how committed they are at the moment and always have been.
They are fully supportive of the team that we have here and the strategic value of Muga. You should also note too that there is a very strong relationship and respect between China Minmetals and AMR. You all know Owen has a long history within the resources industry, and Owen with his tenure at Oxiana and then OZ Minerals. Some of those assets obviously were vended into MMG. There is a huge amount of respect between the two firms. I cannot thank AMR support enough in relation to the financing and also in relation to our strategic initiatives. Those are some of the key questions. I am sure you have all got a bunch more other questions that we have not addressed, but they are the key ones we have.
Please, you know, I think you've got Elvis and Olivia's number. Send us questions. We'll try and answer them all. If we need to do another call, happy to do so. We'll try and update you as much as possible. I think, you know, you've all been very patient. I have to say perhaps a void of information to date. We certainly are looking to change that as much as we can, within the confines of the listing rules and our disclosure obligations. You know, we thank you for that. I'm glad to see a bit of a bounce in the share price today. I hope that continues. I can't see why you wouldn't be buying shares with this sort of, with these sort of announcements. Hopefully we get some arbitrages into the stock. Look, that's all from me.
I don't think there's a live Q&A on here, is there, Ollie?
No.
Okay. So look, thanks very much. We look forward to keeping you updated. Signing off.