Mayur Resources secures $235m from Appian for Central Lime project in Papua New Guinea
Mayur Resources (ASX: MRL) has received an offer of a combined $235 million in new funding support from London-headquartered Appian Capital Advisory and Vision Blue Resources to help complete its Central Lime Project (CLP) in Papua New Guinea.
The definitive debt financing agreement with Appian, when combined with the approximately $63 million investment proposed by another London firm Vision Blue Resources in November 2023, would see the CLP fully funded.
Mayur managing director Paul Mulder said the funding would help pay for construction costs to achieve an annual base case nameplate production capacity of 400,000 tonnes with Mayur’s share of annual EBITDA from the base case to be $19.4 million, along with an allocation for expected further expansion.
First quicklime production at the Port Moresby site is expected to begin 18 months after financial close.
However, first cash flows will come ahead of construction completion through the sale of unprocessed limestone, with sales set to start in Q3 CY24.
“Today marks the key funding milestone in delivering the CLP, which will be a transformative development for Papua New Guinea’s landowners, Central Province and the broader manufacturing sector,” Mr Mulder said.
“As the nation’s inaugural industrial downstream manufacturing processing hub, the CLP will create hundreds of jobs and materially contribute to the clean energy transition by providing a key input to the processing of energy transition metals in the region.”
PNG government support
Mr Mulder said the signing of the funding agreements is a major breakthrough for the manufacturing sector in PNG.
“The project has successfully attracted finance from both Appian and Vision Blue, bringing both debt and equity to the table in a first for PNG.”
“This investment sets the foundation to showcase PNG’s vast potential for small to medium manufacturing projects connected to its natural resources.”
“The support provided by the PNG Marape-Rosso government is a testament to their commitment to supporting downstream processing and assisting in attracting such reputable investment funds into PNG’s first single factory special economic zone.”
“Such support now sets the scene for PNG to compete with the hundreds of billions of dollars already invested into Southeast Asian special economic zones.”
Mining investment focus
Appian Capital Advisory is the investment advisor to long-term value-focused private capital funds that invest solely in mining and mining-related companies.
Its chief executive officer and founder Michael Scherb describes the CLP as a leading asset, set to produce low-cost lime products for metal processing, strategically located close to end markets in Australia and Asia.
“The project will also play a pivotal role in highlighting foreign direct investment in PNG, supporting the country’s growing industrial sector.”
“This collaboration showcases the ongoing success of Appian’s dedicated credit and royalties offering, highlighting the significant value our team brings to the delivery of mining assets globally.”
Vision Blue is a clean energy battery metals transition investment vehicle led by Sir Mick Davis.
Its proposed $63m investment is being made in exchange for a 49% equity stake in the CLP (with Mayur retaining a 51% majority stake).
Construction and funding
Mr Mulder said Mayur’s immediate focus is on completing the remaining conditions precedent to the debt and equity funding on items including but not limited to, product offtake, appointing construction contractors and finalisation of project documentation with and approvals from the PNG government.
Construction of the CLP commenced in mid-2023, with the primary activity to date being the wharf infrastructure, which has allowed Mayur to optimise construction logistics and shorten the project’s development schedule.
Additionally, the company expects to generate early revenues through the sale of raw limestone aggregate from this wharf during construction of the kilns.