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Mayur Resources secures up to US$25 million to develop Orokolo Bay Industrial Sands Project in PNG

The agreement has been successfully concluded following a number of years of discussions, site visits and detailed due diligence.

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The project's tenements covers more than 10,000 square kilometres in the Gulf of Papua

Mayur Resources Ltd (ASX:MRL) has secured up to US$25 million in funding from China Titanium Resources Holding Limited (CTRH) for a 49% stake in Mayur’s subsidiary MR Iron PNG Pte Ltd (MIPP).

The subsidiary holds the Orokolo Bay Project as part of Mayur’s prospective industrial mineral sands portfolio in Papua New Guinea (PNG).

The legally-binding term sheet has been signed and definitive transaction documents are expected to be completed by the end of January.

CTRH has secured exclusivity and made a legally-binding commitment to co-fund the Orokolo Bay pilot plant and fund the full-scale operation.

Partner brings core operational capability

Mayur managing director Paul Mulder said CTRH brought core operational capability in mining these types of projects.

Mulder said: “In addition to providing development capital funding, CTRH will also take on working capital and operational risk through the Orokolo Bay pilot plant phase while agreeing to take on funding responsibility of up to US$25 million and build the stage II full scale plant.

“This is a positive outcome for Mayur shareholders where an external funding pathway has been secured.

“Mayur retains a 51% stake in the potential future economics of the US$106-million net present value (NPV) of the Orokolo Bay project as documented in the pre-feasibility study that was included in the Mayur prospectus.

“MRL still also retains a 51% interest in the mineral sands exploration licence portfolio that MIPP holds across the Gulf of Papua that offers the potential for further expansion projects.”

Two-stage development

The Orokolo Bay Project is proposed to be developed in two stages: a first-stage pilot plant which will produce up to 100,000 tonnes of iron ore sands a year over a 2-year period; and a full-scale plant with a total production capacity of 800 tonnes per hour of run-of-mine feed.

A processing circuit will also be installed to separately produce construction sands and crude zircon concentrates in separated form.

Multiple mineral sands products

Mulder continued: “Having the operational expertise of CTRH, with their proven capability in low cost mining and quarrying, will assist Mayur in putting PNG on a fast-track process to becoming a mineral sands exporter.

“Bilateral ties will increase with Australia, Japan and China with multiple products coming from the mineral sands operation.

“Our focus is to bring employment, spin off business opportunities for the people of Orokolo Bay and work with the people to ensure there will be clarity in detail around what such an operation will mean.

“Now having secured an operating and funding partner, we will progress the project alongside CTRH while progressing our national building and import displacement strategy for PNG.

“We hope this success is just the first in a pipeline of other similar type mineral sands projects slated for the Gulf of Papua region and moreover the replication time should be drastically reduced once this plant is up and running at Orokolo Bay.”

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