Mayur Resources has completed a funding agreement for the Orokolo Bay Mineral Sands project in Papua New Guinea’s Gulf Province.
The company has executed legally binding agreements with PTSFNI, securing the project’s construction and operational finances.
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PTSFNI, an Indonesian-based company specialising in nickel, ferrous, non-ferrous, and new energy materials development, has committed to fully fund the Orokolo Bay project.
This includes achieving an annual nameplate capacity of 400,000 million tonnes (mt) of vanadium titano magnetite (VTM) concentrate, 100,000mt of dense medium separation material, 1,000,000mt of construction sand and 10,000mt of zircon concentrate.
In exchange for funding the project, PTSFNI will receive a 51% equity stake.
The company will provide all necessary capital, construction and operational works, ensuring the project is financially supported up to the first cash flows.
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By GlobalDataShould the project’s development costs exceed A$25m ($16.48m), PTSFNI will contribute the additional funds to Mayur Iron PNG (MIPP) and receive priority repayment of the excess amount.
Upon the successful completion of the development and funding obligations, and after two successive shipments of VTM, PTSFNI’s Class B shares in MIPP will convert to Class A shares.
Furthermore, PTSFNI has secured the exclusive right to earn a 51% equity stake in four other mineral sands projects owned by Mayur, subject to future agreements.
Additionally, Mayur consented to PTSFNI becoming a significant shareholder in the listed parent company through an off-market placement.
PTSFNI will acquire a 9.9% stake at a 15% premium to the 30-day VWAP (volume-weighted average price) prior to the announcement of this transaction.
Mayur chairman Richard Pegum said: “I am excited in realising 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.
“The arrangement is such that landowners and local communities will receive material employment directly coupled with the establishment of additional support service businesses.
“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 being Minerals Sands, Limestone, Quicklime, Clinker/Cement, Power Generation, Renewable Energy, Special Economic Zone, Carbon Credits and Copper Gold.”
