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MINING/ENERGY | Mayur Resources
MAYUR RESOURCES Developing an industrial minerals and power generation platform in Papua New Guinea
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MINING/ENERGY | Mayur Resources
Mayur Resources holds a unique portfolio of resources and energy projects in Papua New Guinea (PNG) – a Pacific island state which Mayur believes offers significant and unrecognised potential as a developing nation on the doorstep of several major economies across the Asia Pacific (APAC) region. The company’s diversified portfolio encompasses a pipeline of exploration and development projects across industrial minerals, cement, power generation, coal, copper and gold – many of the key building blocks for a developing country. Mayur’s executive management team benefits from extensive strategic and operational expertise across the resources sector, with executive director Tim Crossley and managing director Paul Mulder offering +20 years of experience across a broad range of commodities.
“We’ve been able to build a team of
“We essentially have a management team
PNG’s medium-term economic outlook is
with an experienced leader in each business
described as ‘optimistic’ by the World Bank,
division, for example we have a CEO of lime
and having hosted the APEC Leaders’ Summit
and cement, COO in mineral sands and an
in 2018, investment in large-scale resource
executive in power generation,” Mulder tells
projects is set to continue underpinning
RGN.
economic growth in the country.
respected, proven individuals who bring demonstrated capability in their respective fields of expertise. Yes, we have a diverse portfolio but we’ve been able to construct a nimble and highly resourceful team together with an outcome-focused approach.”
Papua New Guinea PNG has been recognised by Mayur as an increasingly attractive jurisdiction to operate in for several reasons: It has proven mineral potential and a well-established mining sector, with a supportive government, a stable legislative environment and favourable fiscal and tax regimes all set against a backdrop of sustained population growth. “PNG offers a huge amount of opportunity given that it is underdeveloped when you compare it the rest of its APAC neighbours and its first world neighbours such as Australia and New Zealand. “With an electrification rate of just 13% of the population, there has been limited economic development in PNG compared to what there could be if they had an electrified nation, and that is where we see a big opportunity,” Mulder adds.
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MINING/ENERGY | Mayur Resources
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The government has also made a strong
“The government is very focused on
commitment to diversify the economy away
attracting investors and having them stay for
from just the next LNG or mining mega-
the long term. In the past they have offered
project, and towards new growth sectors
very attractive incentive packages to attract
which will play a vital role in the nation’s
capital. We operate in a world where there
development.
is competition for capital which is globally mobile, and it will gravitate to jurisdictions
“This diversification will give rise to additional
that provide the best risk-reward returns,”
opportunities within each of those sectors
says Mulder.
where energy and building materials are fundamental, which is where our focus is – industrial minerals and energy.”
Central Cement and Lime project Mayur’s flagship development is the Central
The government has also fostered a distinct
Cement and Lime (CCL) project, a new
pro-investment environment in recent years,
vertically integrated cement project, based
driven largely by the state-run Investment
on two large scale, high quality limestone
Promotion Authority, which encourages
deposits near PNG’s capital Port Moresby.
foreign investment across a wide range of sectors, including resources.
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MINING/ENERGY | Mayur Resources
A definitive feasibility study (DFS) was
“I think this DFS demonstrates the significant
completed for the CCL project in January
value that is currently residing latent in PNG
2019 with very attractive economics,
that can be realised via ongoing support
including a post-tax ungeared NPV of US$352
from the government, the community and
million, an IRR of 23.9% and project payback
developers coming together to unlock the
of 5.2 years. The project offers a range of
opportunity, not only to displace PNG’s
final cement and lime products targeting
current reliance on imports, but also to
both domestic and export markets.
establish a new export industry.”
Life of project revenue has been estimated at
With a MOU signed for gas supply from the
$4,792 million with EBITDA of $3,540 million
nearby ExxonMobil PNG LNG plant, Mulder’s
over an estimated 30-year project life. The
excitement centres on the fact that CCL is a
project hosts over 380 million tonnes (Mt)
ring-fenced project that is not reliant on any
of limestone resources and a maiden ore
other inflows from outside PNG.
reserve of 78Mt has also been declared.
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In doing so, the project will provide a much
“The market is sophisticated and will look at
cheaper cement and lime product for the
diversity of supply, security of supply and at
domestic market, while also emerging as
the same time it will be making sure it has
an extremely competitive alternative supply
access to cheap, high quality, reliable inflow
source in other nearby markets such as
of cement and lime, and that’s what we are
Australia and New Zealand, which currently
going to provide.”
import around 45% of their needs from Japan, China and Vietnam.
Next steps for the CCL project will see Mayur conclude compensation agreements with
“We are three times closer than these
the local community, submit a mining lease
countries when you look at proximity to the
application in H1 2019 and award EPC design
market in Australia and New Zealand. That
and engineering contracts, while finalising
is not just a little bit closer, it is order of
product offtake and project financing
magnitudes closer to that market,” Mulder
arrangements by H2 2019.
stresses.
MINING/ENERGY | Mayur Resources
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Mineral sands Mayur is also developing a new industrial
sands) and a zircon-rich valuable heavy mineral
and mineral sands province in PNG, holding
concentrate by-product.
a portfolio of tenements that stretch across PNG’s Southern coastline and delta regions
At the start of 2019, Mayur secured up to
of the Gulf of Papua. This extensive portfolio
$25 million in funding from China Titanium
provides potential for multiple products and
Resources Holding Limited (CTRH) for the
routes to market.
development of the pilot plant and full-scale operation at Orokolo Bay in return for up to 49%
The most advanced mineral sands project is
of the mineral sands portfolio.
at Orokolo Bay, where a pre-feasibility study (PFS) has been completed which identified
The deal is an attractive one for Mayur, as it
an opportunity to produce fine grain
essentially provides a pathway where its partner
construction sands, titanomagnetite (iron
will develop and fund the project while Mayur
MINING/ENERGY | Mayur Resources maintains 51% of the $106 million NPV that was demonstrated by the PFS. “We retain around $53 million of the Orokolo Bay economics, which is just shy of our current market cap. So, that one deal essentially reflects the market cap of the company, but it should also be noted that Mayur also keeps 51% of all the other mineral sands projects in the portfolio. “We have several other projects we will be developing across our tenement area, But the key thing is we have an experienced, proven, low cost mineral sands developer and operator in CTRH, to help bring our projects into production.” Subsequent to the above, in another important company development Mayur also recently announced the signing of a first binding offtake agreement with a separate Chinese steel group for up to 40% of the vanadium-titano-magnetite product from Orokolo Bay.
Power Generation As previously alluded to by Mulder, PNG’s power generation industry is characterised by a lack of access to electricity for most of the population, and the power that is generated is not only expensive, being dependent on imported liquid fuels, but unreliable too given the lack of investment. Sensing an opportunity to improve the quantity and quality of electricity supply in PNG, Mayur is developing an environmentally
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MINING/ENERGY | Mayur Resources
“Sector diversification will give rise to additional opportunities within each of those sectors where energy and building materials are fundamental, which is where our focus is – industrial minerals and energy” Paul Mulder, managing director Mayur Resources
sustainable Enviro Energy Park (EEP) in
These industrial users are currently burning
the city of Lae, the country’s industrial and
heavy fuel such as diesel for their electricity
manufacturing hub in Morobe Province.
needs, which is highly polluting and very expensive versus using Mayur’s steam by-
The energy source for the Lae EEP Power
product. Therefore, this alternative has both
Project comes in three different forms in the
economic and environmental benefits for the
shape of solar, woodchip biomass and coal,
users in Lae.
making it a reliable and low carbon source of electricity.
“Our multi-fuel technology for the EEP reduces energy costs by more than half
“We have access to PNG’s own domestic coal
compared to the current practice of burning
resources, which is an extremely low ash, low
imported heavy fuel, and at the same time it
sulphur type that is a lot cleaner than the coal drastically reduces localised air emissions, in Australia uses for its own power generation
terms of noxious gases, as well as the CO2
needs. Another key differentiator of the
footprint.”
project is that it also produces steam as a byproduct, which will be produced extremely
Should all the aforementioned projects reach
cheaply and offered to industrial users in
final investment decisions, Mayur’s positive
Lae.”
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impact on PNG will be tangible, not only
“The flow on benefits will also extend
in stimulating the economy and boosting
indirectly to education, health and standards
employment, but also from adding value and
of living.”
keeping wealth in-country. Finally, with Mayur’s market capitalisation “The delivery and construction stages of
currently sitting well below $100 million,
these projects will create employment that
Mulder believes there is a significant
will then transition into the operational
opportunity for upward movement in the
phases. But the wider benefits will be from
company’s share price as these projects are
the multiplier effect of cheaper power and
advanced and ultimately commence revenue
cement that will flow across the economy
generation.
over the +30-year life of the projects,” says Mulder.
ASX:MRL
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Published by Anderson Murray Media Ltd
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