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- Mayur Resources (MRL) has secured an investment for its Orokolo Bay project through a binding term sheet with PNG-based HBS (PNG)
- HBS will complete a staged investment in Mayur’s PNG subsidiary for 20 per cent of the issued capital in Ortus Resources — an entity who’s set to complete an IPO in early 2022
- The investment will support construction works, plant and equipment which is expected to begin in February, prior to the IPO
- Mayur Resources expects the Orokolo Bay project will begin production in the second half of 2022 with the first shipment of products expected in late 2022 or early 2023
- Company shares have dropped 2.38 per cent to trade at 20.5 cents
Mayur Resources (MRL) has executed a term sheet agreement with Papua New Guinea-based construction and mining contractor, HBS (PNG).
Under the binding deal, HBS will complete a staged investment into Mayur’s wholly-owned subsidiary, Mayur Iron PNG, for 20 per cent of the issued capital in Ortus Resources. Ortus was established to hold Mayur’s iron and industrial sands portfolio that includes the flagship Orokolo Bay project.
HBS’ investment reportedly represents about 27 per cent of the total capital expenditure needed to bring Orokolo Bay into full-scale production.
At this stage, the investment will support construction works, plant and equipment with construction work expected to begin in February 2022.
The work is expected to begin before Ortus Resources’ planned initial public offering (IPO) in the first quarter of 2022. But, if Mayur doesn’t proceed with project development or doesn’t complete the IPO, Mayur will cover the costs of the construction work.
Notably, this deal replaces the former agreement partnering agreement with China Titanium Resources (CTRH) who reportedly were unable to meet their obligations. However, despite not pursuing a partnership with CTRH, Mayur is still in discussions to potentially agree on the purchase of equipment from CTRH if economically beneficial.
HBS CEO Jason Zoller said the company had been looking for an opportunity to invest in a new mining development project.
“Following extensive negotiations and due diligence we decided to partner with Mayur at Orokolo Bay,” he said.
“Not only are we extremely confident in the simple operational set up and fundamentals of the project, but we also believe there are significant benefits that HBS can deliver that enhances the results of the DFS that Mayur announced in September 2020.”
Once it’s up and running, the project will produce products such as titano-magnetite, construction sands and a zircon-rich heavy mineral concentrate.
MRL Managing Director Paul Mulder was pleased to have secured an investment from HBS.
“This strategic partnership and investment not only de-risks the development and operations of the project, it will also reduce the IPO financing requirements for the Ortus IPO that is planned for early 2022,” he said.
“Mayur’s senior executives toured the HBS facilities and it was clear that their established resources, strong in country network and on the ground operating systems in PNG will ensure that we can hit the ground running at Orokolo Bay early in the new year, building on an established camp and river landing facility and a decade long presence and engagement with landowners.”
Mayur Resources expects the Orokolo Bay project will begin production in the second half of 2022 with the first shipment of products expected in late 2022 or early 2023.
Company shares dropped 2.38 per cent to trade at 20.5 cents at 2:49 pm AEDT.
