Mayur Resources (ASX:MRL) mineral resources and energy developer in PNG

Interviews

by Jessica Amir

Mayur Resources Limited (ASX:MRL) Managing Director, Paul Mulder provides an update on the company's key Orokolo Bay Project in PNG.

Jessica Amir:
Thanks for tuning into the Finance News Network, I’m Jessica Amir. Today I’m with Mayur Resources Limited (ASX:MRL) Managing Director, Paul Mulder. Hi Paul and welcome to the Network.

Paul Mulder: Thanks for having me.

Jessica Amir: For those who haven’t heard of Mayur Resources (ASX:MRL), can you just give us a quick introduction?

Paul Mulder: Mayur Resources is a Papua New Guinea based portfolio of assets. Those assets are primarily surrounded around minerals, industrial minerals particularly and also energy. The reason why we’ve focused in on that area is most people know Papua New Guinea is a developing country. And based on it being a developing country, it has a need for industrial minerals for cement, lime and those sorts of things. That it also needs energy and it needs power.

Jessica Amir: Before we talk about your projects, just tell us about PNG. Is it supportive?

Paul Mulder: The Papua New Guinea Government has been very, very supportive for our investment. Before we made the investment in PNG, we looked around at other jurisdictions, such as Indonesia, South Africa, Myanmar, India and Papua New Guinea came up trumps. It has a Westminster system. It has a very proactive government that has a strong focus on resources and energy, in all of their plans for development. We’ve secured approvals and got through the development timeframe, in a very fast period of time when you compare it to how long it takes say, to develop a similar project in Australia.

Jessica Amir: Now to your projects Paul. What can you tell us about Mineral Sands?

Paul Mulder: We have a very, very large area of Mineral Sands under tenure. Orokolo Bay is our flagship project. That project has been funded; we recently announced that. We’re in a joint venture arrangement with a Chinese company and we will jointly develop that. Now those Mineral Sands projects have four different products. It has a vanadium titanium magnetite for steel making. It has a dense medium separation for coal washing, which is a magnetite-based product, zircon and also a high-grade silica sand for construction materials.

Jessica Amir: What about cement and lime?

Paul Mulder: Cement and lime has been our most recent project that we’ve announced. It’s a circa valued around $500 million in NPV terms. The key thing for Papua New Guinea here, which most people won’t know, is Papua New Guinea does not have one cement plant. So if you think about the whole country, to build the entire country, it’s importing its cement. And for its quicklime, most of its quicklime is coming from Thailand.

So when you’ve got all the resources in country, so close to an energy source. You have competitive labour and all of the other associated minerals to make cement. Is essentially all on the one tenement right on the coast next to deep water, that’s the consist of a tier one really valuable project. And you look at that project at the bottom end of the global cost curve, when it comes to capital intensity, when it comes to operations.

So we’re really excited about that; that is a flagship for our company. We see that as a massive nation building opportunity for PNG, but it doesn’t stop there. Because of its proximity to Australia, it’s a very, very large opportunity to ship the products down to the east coast of Australia.

Jessica Amir: You do have two other projects. What can you tell us about power generation?

Paul Mulder: Our power generation project is ready to go. We’re waiting on the Papua New Guinea Government to approve our power purchase agreement, that’s a 25-year arrangement with the Government. Their subsidiary PNG Power have requested us to submit a power purchase agreement, which has been done. All the approvals, definitive feasibility study, all the environmental approvals, all of that has been done and it’s simply waiting for a power purchase agreement, to be signed by the Government.

I think the key for people to understand there about why this would be an attractive project; we’re displacing a heavy fuel oil and diesel. That heavy fuel oil and diesel is far higher polluting, but also it’s two to three times the price. So we’re going to reduce the power price by more than half. So that is a huge opportunity for PNG, it’s a great opportunity for the shareholders of Mayur.

Jessica Amir: Now to your strategy. What can you tell us about your multi commodity approach, because you do have a lot of projects on your hands?

Paul Mulder: We see two things. One, you diversify your risk in a developing country. But also two, as I’ve articulated in the interview, you have energy and you have industrial minerals that actually go hand in glove and can benefit each other. And we see some synergies between the projects.

Jessica Amir: Just quickly, what can you tell us about your share price?

Paul Mulder: We’re valued at $100 million or thereabouts. If you then look at the projects that we’ve recently delivered, the Chinese deal values our economics at around $70 million. The lime and cement project that we’ve recently announced is also valued around $500 million, with the power and the copper gold. We’ve got an opportunity of around several hundred million dollars of value. So we see the arbitrage between $100 million and $700 million, as something very attractive to shareholders, particularly based on how advanced our projects are.

And then when you look at our share registry, we have Bennelong, we have Terra, we have Regal, we have Soul Pat (ASX:SOL) that have bought into the vision that we’ve got. They’ve bought into our track record. They’ve also bought into the fact that we’ve put our own skin in the game. And when I say skin in the game, management and my family control 70 per cent of the stock. So they know that we’ll be trying our very best to accrete value for shareholders, the very best we can.

Jessica Amir: Thank you so much for your time, Paul Mulder.

Paul Mulder: Thank you.


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