Tag Archives: Orokolo Bay

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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PNG sands come to the market in Australia

Bondi beach in Sydney

Tim Boreham | The Australian | August 12, 2017

In a variation of the coals-to-Newcastle theme, Mayur Resources, an eclectic multi-commodity resources house plans to ship a million tonnes of sand from Papua New Guinea to Sydney.

Don’t we have a surfeit of the stuff already — and not just on Bondi Beach? Apparently not: Mayur’s sand is the high-quality, fine-grained variety valued by cement makers, and it’s in short supply in the Sydney region.

Mayur chief executive Paul Mulder says most of the construction sand is supplied from quarries in the Newcastle region and then trucked to Sydney at great cost.

It’s cheaper to ship the stuff from PNG, where the sand will be an otherwise waste product from Mayur’s proposed Orokolo Bay mineral and industrial sands project on the southern coast.

The Singapore-incorporated, Brisbane-headquartered Mayur is in the throes of raising up to $15.5m ahead of its September 1 ASX listing. The offer looks like being oversubscribed ahead of its close date next Friday.

Mayur’s PNG assets also include limestone, copper-gold tenements and coal projects, as well as a planned coal-fired power station to be built near the industrial city of Lae.

The project remains subject to a definitive feasibility study, with total capex of just $US22m to bring the project into production.

With more than 12,000sq km of highly prospective exploration tenements available to be drilled, Mayur is confident enough to plan trial shipments to customers in China and Japan within 14 months.

Costed at $110m, the Lae power project involves shipping coal from Mayur’s Depot Creek project in the south of the country, which boasts the first compliant coal resource in PNG, at 11.4 million tonnes.

The power plant, which has been granted environmental approval, remains subject to a power purchasing agreement execution with state-owned utility PNG Power.

While approval is no Lae-down misere, Mulder seems confident the power project will ultimately prevail because of the need for reliable low-cost electricity.

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