Zeotech (ASX:ZEO) executed a non-binding term sheet with Gladstone Ports for a proposed agreement to lease designated land at the Port of Bundaberg for a dry bulk kaolin direct shipping ore receival, storage, and loading facility in Queensland, according to a Tuesday filing with the Australian bourse.

The company is required to provide a AU$20,000 bank guarantee to be surrendered to Gladstone Ports if an agreement to lease does not proceed, the filing said.

The company will determine the final area required for the proposal after design and planning approval processes, per the filing.

Zeotech shares fell 3% in afternoon trade on Tuesday.