Zeotech (ASX:ZEO) signed a non-binding memorandum of understanding (MOU) with China-based Jiangsu Mineral Sources International Trading (MSI), according to a Monday filing with the Australian bourse.

The agreement sets the framework for MSI to potentially purchase 800,000 tonnes of low-iron kaolin, 150,000 tonnes of pink cosmetic grade kaolin, and 1.5 million tonnes of bauxitic clay over five years, the filing said.

A binding agreement would be sufficient to sustain operations at the company's Toondoon Kaolin Project in Queensland and could generate additional revenue from bauxitic clay that would otherwise be stockpiled, the filing added.

The MOU expires on Dec. 31 and is subject to further negotiation and final agreement, the company said.

Shares of the company rose nearly 7% in recent Monday trade.