Mayur Resources secures key investment for Orokolo Bay mineral sands project in PNG

Mayur Resources (ASX: MRL) has continued its recent run of project development and corporate success with the signing of an agreement which will go a long way to help commercialise its Orokolo Bay mineral sands project in Papua New Guinea.

Mayur has signed binding agreements with Indonesia’s PT SEA First Nickel Industry (PTSFNI) to fully fund the project located in the Gulf Project precinct to the north-east of the capital of Port Moresby.

PTSFNI will receive a 51% equity interest in the project for an up to $25 million investment and will also become a strategic Mayur shareholder with a $7.32m placement for 9.9% of Mayur at a 15% premium to the 30-day volume-weighted average price.

PTSFNI will also receive a first right of refusal to work with Mayur on its four other industrial sands projects in PNG.

Run of funding success

The deal with PTSFNI comes hot on the heels of Mayur’s 2023 agreement with Vision Blue Resources for a proposed investment of around $60m for a 49% equity share in Mayur’s Central Lime project.

Mayur chair Richard Pegum said PTSFNI has agreed to fully fund the development of Orokolo Bay, which is designed to deliver an annual nameplate capacity output of 400,000 tonnes of vanadium-titano-magnetite concentrate, 100,000t of dense medium separation material, 1Mt of construction sand and 10,000t of zircon concentrate.

“I am excited to realise the vision of Mayur’s management after a decade of hard work, being the first of our five mineral sands licences we have been developing,” Mr Pegum said.

“While the agreement minimises the dilution of Mayur shareholders, it provides PTSFNI with an aligned parent company strategic stake across all of Mayur’s divisions […] mineral sands, limestone, quicklime, clinker/cement, power generation, renewable energy, special economic zone, carbon credits and copper-gold.”

“PTSFNI will also, at the subsidiary level, receive a 51% equity stake in the future economics of the Orokolo Bay project and the much larger portfolio of additional mineral sands projects the company has been developing over the last decade.”

“PTSFNI, having a proven, large-scale track record in Indonesia, just next door to PNG (also in a total greenfield remote environment at an eye-watering scale far bigger than the Orokolo Bay project), gave me immense comfort when recently visiting [these] facilities.”

PNG’s time to shine

Speaking at the recent PNG Resources and Energy Investment Conference in Sydney, Mayur noted that Papua New Guinea is a nation whose time has come.

“With the right proven and experienced development partners, PNG could also grow into a major downstream processing manufacturing hub,” Mr Pegum said.

“I wish to sincerely thank the local landowners and the PNG government and provincial administration for their ongoing support where we can now deliver the infrastructure and social projects we have committed to.”

PTSFNI president James Chen said his company’s objective is to commence with the iron and mineral sands portfolio, where value-added downstream processing of a comprehensive recovery of iron, titanium and vanadium is one of its strengths.

“We ultimately see access to domestic steel, a key ingredient for a developing nation such as PNG, as important as committing to a project where the landscape lends itself to ‘long-term sustainable post-mining industries.’”

“Orokolo Bay has a unique landscape, where post-mining land use such as corn plantation, rice plantation and fish-farming as well as other agricultural opportunities are immense.”

“These industries shall be established in partnership with landowners and respective local, provincial and state government agencies and shall set the economic foundation of the area well after mining has ceased.”

Carbon credit ruling welcomed

Mayur has also welcomed the ruling by PNG’s deputy chief justice quashing a cancellation decision affecting the company’s carbon credit program.

The ruling has reinstated the validity of Mayur’s timber permits for the development of carbon-offset projects held by wholly-owned subsidiary Mayur Renewables PNG.

Mayur is now able to continue with the establishment of its nature-based REDD+ projects at Kamula Dosa in PNG’s Western Province, as well as other locations across the country.