Tag Archives: Mayur Resources

Mayur Resources brings in the Chinese

Mayur gets Chinese funding for development of Orokolo iron and zircon sand project in PNG

Paul Moore | International Mining | 7 January 2019

Mayur Resources Ltd announces that its 100% owned subsidiary MR Iron PNG Pte Ltd (MIPP) has signed a legally binding term sheet with China Titanium Resources Holdings Ltd (CTRH) relating to the development of Mayur’s Orokolo Bay Industrial Mineral Sands project in PNG’s Gulf Province with pilot scale bulk sampling planned to commence in Q3 of the 2019 calendar year.

The Orokolo Bay Project is proposed to be developed in two stages. Stage 1 is the Pilot Plant comprising the construction, commissioning and operation of a pilot scale bulk sample that is already environmentally permitted to produce up to 100,000 t of iron ore sands per annum (over a 2‐year period) principally for the purpose of providing test scale shipments of product to potential off takers, with the endeavour they will then sign legally binding long‐term offtake agreements for the Full‐Scale Plant.

Stage 2 is the Full Scale Plant. Subject to the outcomes of the Pilot Plant Bulk Samples including customer acceptance of product, obtaining the required permits and landowner consents for the Full‐Scale Operations, as well as the Definitive Feasibility Study, it is proposed to expand the capacity of the Pilot Plant to achieve total production capacity of 800 t/h run of mine (ROM) feed rate. In addition, a processing circuit is to be installed to separately produce construction sands and crude zircon concentrates (in separated form).

Pursuant to the Legally Binding Term Sheet, CTRH has agreed to provide up to $25 million in funding for the construction of the Pilot Plant and Full‐Scale Plant on the following terms:

a) CTRH to fund 50% of the Maximum Budget for the Stage 1 Pilot Plant that is to be agreed between the parties. MRL will provide the remaining 50% of the Maximum Budget for the Stage 1 Pilot Plant but may at its sole option defer payment of half (50%) of its funding obligation for the Stage 1 Pilot Plant, in which case CTRH will fund 75% of the Maximum Budget for the Stage 1 Pilot Plant. CTRH will be solely responsible for funding any expenditure in excess of the Maximum Budget that is required to construct the Stage 1 Pilot Plant.

b) Should the conditions precedent for proceeding to the Stage 2 Full Scale Plant be met CTRH will fund the capital expenditure for the Stage 2 Full Scale Operation subject to the total funding provided by CTRH for both the Stage 1 Pilot Plant and the Stage 2 Full Scale Operation not exceeding $25 million.

c) CTRH will receive a 2% equity interest in MIPP for each $1 million in funding contributed by CTRH, provided that CTRH’s total equity interest in MIPP is capped at 49%.

d) CTRH will be solely responsible for funding the operating costs of the Stage 1 Pilot Plant and the related bulk sampling program during the operation of the Stage 1 Pilot Plant.

e) Although it is considered extremely unlikely, to the extent that additional funding above $25 million is required for the construction of the Stage 2 Full Scale Project, MRL shall provide loans to

MIPP with those loans being repaid, on a priority basis, from the cash flows generated by MIPP from the operation of the Stage 2 Full Scale Plant.

This agreement has been successfully concluded following a number of years of discussions, site visits (PNG and China) and detailed due diligence by both parties. Paul Mulder Managing Director of Mayur Resources said “CTRH bring core operational capability in mining these types of projects, and 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 up to $25 million and build the Stage 2 Full Scale Plant. This is a positive outcome for Mayur Shareholders where an external funding pathway has been secured whilst Mayur retains a 51% stake in the potential future economics of the $106 million 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 license portfolio that MIPP holds across the Gulf of Papua that offers the potential for further expansion projects. 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.”

He adds: “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 whilst progressing our National Building and Import displacement strategy for PNG.”

The legally binding term sheet is expected to be converted into definitive transaction documents before the end of January 2019. The Orokolo Bay project is extremely simple with no requirement

for chemical processing, grinding or tailings dams. The process involves simple near surface ripping and then sand extraction that is separated by gravity spirals and low intensity magnets (LIMS), with the vast majority of the sand being placed back from where it was taken, enabling rehabilitation to occur almost immediately after mining, leaving a minimal foot print.

CTRH ‘s Director Mr Chen Hui said: “As a strategic partner we are excited to develop the Papua New Guinea Industrial Mineral Sands operation together with Mayur, a team with great entrepreneurship and professionalism. We are confident that we will deliver Vanadium Titano Magnetite (VTM) and Construction Sands fit for the market demand at a low cost. We are also visioning for future downstream integrated steel production and expecting to bring long term value for our shareholders and the people of PNG. Having been to the site numerous times and having spent time in PNG to understand its provisions we are confident in the Provincial and State governments commitment to encouraging investment and diversifying the PNG economy. Very importantly we must see benefit go to the communities that we work in and as such will adopt a very inclusive management style. The intention of the Stage 1 pilot plant operations is to demonstrate to the international community that PNG can be taken seriously as a reliable, quality supplier of minerals that range from products for steelmaking, tiles, ceramics, concrete/cement, golf clubs, medical prothesis and smart phone screens.”

He adds: “Upon Stage 1 testing successfully gaining customer acceptance and Stage 2 Permits and Landowner consents being received, we have already committed to fund the development of Stage 2 full scale operation. The Governor of Gulf Province has been very supportive to provide new employment and job opportunities for the people of Orokolo Bay, and we are committed to localisation of human resources and will bring and transfer expertise and skills together with Mayur. CTRH and Mayur have already started ordering equipment for the Stage 1 trial plant and will further refine the definitive feasibility study (DFS) from the pilot plant findings that will inform the final Stage 2 Full Scale Plant. We will also second resources into MIPP to finalise the DFS while executing the Stage 1 pilot plant.”

Mulder concluded “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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Govt will support coal power plant, says Basil

Peter Esila | The National aka The Loggers Times | November 29, 2018

THE Government will support any type of energy-producing sources developed in the country, including coal, says Minister for Energy Sam Basil.
Basil, one of the major proponents of the coal project in Lae together with Lae MP John Rosso, said this on FM 100 talkback radio yesterday in reference to that project.
Bulolo MP Basil and Ross have already encountered fierce resistance to the project in light of environmental implications.
This includes biomass energy project landowners in the Markham Valley of Morobe.
“We will continue to support all the different power-producing companies using different methods that are coming into PNG to operate, coal being one of them,” Basil said.
“The important thing that we must also look at is that when we start putting new power plants in districts and provinces, I’d like to look more into the landowners, the local level government, districts, towns and the provinces.
“What kind of benefits will we have in return for those people who may have their land and resources available for those projects to take stage?
“We should now be looking at more benefits rolling back into the host districts and provinces, and landowners.”
Basil is aware of resistance to him and Rosso.
“I would like to test new ideas, new ways of doing things because PNG has been neglected for awhile,” he said.
“Our neighbours Indonesia and Australia are heavily dependent – more than 50 per cent – on coal.
“We should be asking ourselves: How can we progress PNG forward? I think that one of the answers is having access to energy.
“We have a lot of raw resources to burn, to produce products for us, decapitating international prices by having access to our own energy here like gas, coal and others.
“It is one of the things that we should be promoting,”
Of solar energy, Basil said: “We are looking for solar places.
“For example, we are asking the DDA (district development authority) of Markham and other districts that have ample land, good sunlight, to make land available.
“Register with the Energy Department so that when people come and look around for putting up solar plants, we have got land there.
“We can also identify potential sites for geothermal.”
Basil said that the National Energy Bill, which would allow for energy investments, was in its final stages.

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No power deal to use coal, says Blacklock

“Why should PNG that has all these beautiful water running through its rivers, is sitting on an ocean of gas, rush down the path of dealing with salesmen from other countries who want us to buy a coal-fired power station?”

Helen Tarawa | The National | November 23, 2018

PNG Power Limited acting managing director Carolyn Blacklock says the company does not have any power purchase agreements that involves coal.

She told The National that a proposal for a purchase agreement using coal-fired electricity supplies was “unsolicited”.

“This is not something we went to market for competitive bidding,” Blacklock said.

The Mayur Resources Enviro Energy Park project to be built in Lae has received support from Morobe and Gulf provincial governments, and the endorsement of the Conservation and Environment Protection Agency.

Mayur had agreed to a K125 million funding package for Morobe over 25 years. But it is awaiting the green light from PNG Power.

Energy Minister Sam Basil recently wrote to PNG Power chairman Peter Nupiri stating that Mayur’s response to a solicited request from Blacklock should be presented to the board for consideration.

He requested PNG Power to give Mayur, “being a genuine investor”, a fair chance by taking his response to the board. But Blacklock said “we are not scared about the fuel source”.

“Coal is not something that PNG Power worries necessarily about doing.

“If we have to do coal or gas or hydro, we do it on a basis that it is built around PNG Power’s plan which says we need this much generation at this time in this location.

“We don’t go into market to do that. So why should PNG that has all these beautiful water running through its rivers, is sitting on an ocean of gas, rush down the path of dealing with salesmen from other countries who want us to buy a coal-fired power station?

“They don’t have a balance sheet and they have never worked in PNG. I’m not Papua New Guinean but I’ve seen enough of this nonsense. We need to be building power stations based on true planned demand not on what somebody else thinks is our demand.

“We’ve got to get this right otherwise we end up with other power projects with other power projects that are costing us too much money or are not in the right place or too much power.

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Landowners oppose Lae’s coal-fired project

“We landowners of the Markham Valley, people of Papua New Guinea, we do not want coal-fired power or coal mining in our country”.

The National aka The Loggers Times | October 26, 2018

Markham Valley biomass landowners from Morobe have resisted the coal-fired project in Lae, spearheaded by Energy Minister Sam Basil and Lae MP John Rosso.

They travelled to Port Moresby this week to hold meetings with PNG Power Ltd and Government departments over the delay with the biomass project to which they have committed land.

Chairman Sam Meyab, of the Zif Faring Business Group, said yesterday the landowners wanted to show their support for the PNG Biomass project and to confront PPL, Energy Minister Sam Basil and Treasurer Charles Abel over the delay.

“The politicians think coal is the answer,” he said.

“We landowners of the Markham Valley, people of Papua New Guinea, we do not want coal-fired power or coal mining in our country.

“We want a clean, renewable, healthy future for our children.

“Coal has no place in PNG.

“We want renewable biomass to power our homes, not dirty coal.

“We want healthy lives, not a polluting coal-powered plant in Lae.

“We want our Government to honour its commitments – to us, to the developer, to the country, to the world.”
Meyab said the biomass project had all licences and permits, approvals and a signed power-purchasing agreement with PPL.

“We know that the biomass project sponsor Oil Search Ltd wants this project to go ahead,” he said.

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Australian company pushing to open Papua New Guinea’s first coal-fired power plant

PHOTO: A new 60 megawatt power station would have the ability to burn coal as well as use renewable biomass. (ABC News: Peter Giafis)

An Australian company is pushing ahead with plans to open a coal-fired power plant and coal mine in Papua New Guinea, despite the recent call from the world’s most authoritative climate science body to completely cut greenhouse emissions by 2050.

Key points:

  • Mayur Resources plans to open a power plant and possible coal mine in PNG
  • A new power facility is expected in just over two years, the Energy Minister says
  • Activists say the move would be counter to PNG’s commitments under the Paris accords

Yara Murray-Atfield | ABC News | 19 October 2018

Australian-based and PNG-focused Mayur Resources is proposing the establishment of an “Enviro Energy Park” in the industrial hub of Lae in PNG’s Morobe province.

Mayur has been in talks for the project since at least 2014, but now a new memorandum of agreement (MOA) has been signed between the company, the Lae City Authority, and the Morobe Provincial Government.

The MOA details plans for a new 60 megawatt power station, with the ability to burn coal as well as use renewable biomass, solar energy, and by-product heat.

Mayur Resources’ managing director Paul Mulder told the ABC the company was essentially at the stage of being “construction-ready” for the project, which he said would significantly reduce the energy cost for Papua New Guineans.

On Tuesday, Mayur released a statement to the Australian Stock Exchange detailing further non-binding plans to work with coal exporter Square at a coal mine in another province, touting the “low-ash, low-sulphur coal” found at Gulf Province’s Depot Creek.

If the projects are built, they would mark the first coal-fired power plant and coal mine in the country.

Coal generates mixed reaction

The project has attracted high-profile supporters, including Energy Minister Sam Basil who did not respond to an ABC request for comment, but said in a Mayur press release that “we can expect a new power facility in just over two years from now”.

“Whilst there are always those that will criticise, I take this opportunity to outline that Australia enjoys its first world developed lifestyle with 70 per cent of its total energy coming from coal,” Mr Basil said in the release, adding that this project would only be a much smaller fraction of PNG’s total energy.

PNG is a signatory to the Paris Agreement and, like Australia, recently signed the Pacific Islands Forum’s Boe Declaration, which says climate change “remains the single greatest threat to the livelihood, security, and wellbeing of the peoples of the Pacific”.

An assessment from PNG’s Conservation and Environment Protection Agency has given its endorsement to the plan, but it still faces community backlash.

“Our neighbours are really facing an existential crisis from sea level rise,” Christian Lohberger, head of anti-coal activist group Nogat Coal, told the ABC.

“So we think it’s irresponsible for Papua New Guinea to invest in coal, especially because there are many, many alternatives in Papua New Guinea for energy generation,” added Mr Lohberger, who also works for the Astra Solar company in PNG.

In 2016, World Bank data suggested only 23 per cent of the population had access to electricity, and even larger, electrified cities like the capital Port Moresby and Lae experience severe and frequent power outages.

Mr Mulder of Mayur Resources said PNG was an “energy-starved nation” and that the proposal “reduces the emissions footprint of what is currently the state of play in Papua New Guinea.”

Most prominent businesses in Lae use diesel-powered generators, which can produce carbon dioxide and other particulate emissions, and are known to reduce air quality.

“We’ve got the emission thing, but by the same token, if you lived in Lae, you would understand,” Lae MP John Rosso told the ABC.

“We have huge power fluctuations and we [sometimes] go a week without power.

“Our factories are suffering, our consumers are suffering, and I had to make that call, because we can’t keep sitting in the dark and letting our kids sit in the dark.”

The plan does have some resistance within government circles, with the Minister for Lands and Asia-Pacific Economic Cooperation (APEC) Justin Tkatchenko telling the ABC “for me personally … I am against coal fire, 100 per cent”.

Final hurdle is ‘unsolicited’ power agreement

The recent MOA is not an official contract, but Mayur said it had completed a feasibility study, selected a site, secured environmental approval, and received bids for the construction of the facility.

The plan also details a commitment to fully fund a research institute at the University of Technology, and provide $130,000 per year for 25 years to a local charity.

The sticking point for the project is now getting national provider PNG Power to sign a Power Purchasing Agreement (PPA) before energy could be sold to the country’s grid.

PNG Power’s acting managing director Carolyn Blacklock said they had received four “unsolicited” PPA proposals from Mayur over several years, without a public tender process, and that it was unlikely a deal would be signed without a competitive bidding process.

But Mr Mulder said the company received a written request for a PPA and was provided with PNG Power documentation to submit, which they did in March 2016.

The ABC has sighted a letter that appears to be from then-director of strategic planning and business development Chris Bais dated October 2015, which “welcomes” Mayur to submit a PPA proposal.

Ms Blacklock took on the acting managing director job earlier this year following a reshuffle of the company’s board and has overseen a massive restructure of the company.

She said regardless of what correspondence the company had engaged in to date, PNG Power had no obligation to accept any PPA proposal.

“In PNG we have very high costs over power, in part driven because what has been done at PNG Power: uncompetitive processes that have led to uncompetitive prices that leads to uncompetitive tariffs for our consumers,” Ms Blacklock told the ABC.

Meanwhile Energy Minister Sam Basil was quoted in the press release as saying “there is no cheaper alternative ready to be built” and that it was time for PNG Power to “act swiftly” to finalise the agreement.

“It doesn’t mean just because there’s pressure applied, that the PNG Power board or myself or management are going to be swayed,” Ms Blacklock said.

A month ago, Mayur resources was floated on the Australian Stock Exchange and raised $15.5 million in an over-subscribed initial public offering — money they say will go towards developing further projects in PNG.

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Mayur set to drill Feni Island

Field mapping at Matakangkaka Creek

PNG Industry News | 13 August 2018

MAYUR Resources says it is ready to mobilise a team do begin a drill program at its Feni Island copper-gold project in New Ireland Province.

This follows the completion of a detailed field mapping and sampling programme within the Matangkaka Creek area at Feni Islands EL2096.

The company says Matangkaka Creek is an eastern tributary of the Nanum River and is rated as one of the top three gold bearing streams in the Feni Island group. It is also near and upstream from the Kabang structure that hosts a 650,000 ounce gold resource.

“The trip was undertaken by Dr David Lindley, Mayur’s veteran expert geologist who has decades of experience on Feni,” Mayur said.

Mayur has correlated this new information with historical data to finalise a drilling programme of up to 2400m. The programme of up to seven holes is focusing on the gold mineralisation in structures beneath and along strike of the Matangkaka Creek.

Mayur managing director Paul Mulder said the company was essentially ready to mobilise and execute the drilling programme at Feni.

“This is particularly exciting as Feni Island sits between Lihir, one of the largest gold mines in the world, and Bougainville, one of the world’s great copper-deposits. You could not ask for a more prospective postcode location of the Feni prospect being the situated island between these two world-class giants.

“This, coupled with historic attractive copper and gold mineralisation from near surface (continuing at depth), provides an attractive backdrop to conduct a drilling campaign, which will be the first in many years on the island,” Mulder said.

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Australian company given green light to extract PNG coal

Mayur MD, Paul Mulder with Gulf Provincial Governor, Chris Havieta, signing an agreement in 2017

Radio New Zealand | 22 June 2018

An Australian company has been granted an environmental permit to extract coal in Papua New Guinea’s Gulf Province.

Mayur Resources has been given the green light to proceed with an exploration licence, owned by the company’s subsidiary in PNG, Waterford Ltd.

It’s the first time that the Conservation and Environmental Protection Authority (CEPA) has issued an environmental permit for coal bulk sampling in PNG to enable commercial grade shipments.

According to PNG Industry News, the conditions of the permit include the submission and implementation of a robust environmental management plan.

Managing director Paul Mulder said it was an exciting step in bringing PNG coal to the international market as a potential new source of energy.

The company was looking to confirm suitability of the coal for use in domestic power generation.

Mayur is also developing a proposed 50MW power station near Lae at the Western Tidal Basin in Morobe Province.

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