China Environmental Resources Group Ltd. has terminated its memorandum of understanding with Sichuan YLS and will instead proceed with the direct acquisition of a 90% equity interest in 四川源莱顺再生资源有限公司, the principal operating subsidiary of Sichuan YLS. The decision follows further commercial negotiations and is intended to provide the group with direct control and integration of the target company's business, enhancing synergies and growth opportunities in the rare earth materials market. The parties mutually agreed that a direct acquisition would be more strategically beneficial than the previously contemplated cooperation. Completion of the acquisition remains subject to the satisfaction of certain conditions.