Mayur Resources (ASX:MRL) Industrial Minerals and Energy


by Anna Napoli

Mayur Resources Limited (ASX:MRL) Managing Director, Paul Mulder provides an update on the company’s portfolio of nation building projects in PNG.

Anna Napoli: Hello, I'm Anna Napoli for the Finance News Network, and joining me now from Mayur Resources (ASX:MRL) is managing director Paul Mulder. Paul, welcome back to FNN.

Paul Mulder: Thank you for having me.

Anna Napoli: For investors new to Mayur Resources (ASX:MRL), can you give us an introduction to the company?

Paul Mulder: Mayur Resources (ASX:MRL) is a mineral development and energy platform. It has a portfolio of assets. Those assets are primarily centered around industrial minerals and energy, being things such as coal, solar, biomass, co-generated steam. Those elements are critical to essentially growing the GDP and wealth of the country. Our focus is predominantly to displace imports and grow industries using natural PNG resources in country, and essentially grow those businesses not just for PNG but also to export into the broader Asia Pacific, particularly Australia.

Anna Napoli: You've released a definitive feasibility study for the cement and lime project. Can you tell us more?

Paul Mulder: The definitive feasibility study that we have just completed showed extremely attractive economics. Those economics were circa $500 million. The definitive feasibility study contemplates quicklime, powdered cement, as well as clinker. What we're planning to do is to satisfy all of the demand for cement within Papua New Guinea from this facility, that will displace imports. But at the same time, the surplus capacity will then to go Australia in the form of powdered cement and also clinker.

The opportunity, however, with the resources, we've got some 380 million tonnes. Only a fraction is being used for the first phase, which is the plant that we've studied in the definitive feasibility study. We've got the opportunity as PNG grows also to utilize those resources and grow the production facilities. I think the really important thing to note for investors, though, is that when you look at a market such as Australia, it imports half of the material from Japan, China, Vietnam. That's 21 days sailing from the market to the East Coast of Australia. We’re six days sailing, where we are. If you were to fast-forward five years and say, "Well, from the perspective of utilization and market security and security of supply, why is someone going to be purchasing a cement product that is three times further away from themselves when it has such a close opportunity in purchasing cement and quicklime products from Papua New Guinea?"

We feel that strategically, the resource is very, very low-cost, strip ratio is zero. The energy costs are very low, the labor costs are very low, and the proximity to market is excellent. Those fundamental things for us, that will be a game-changer for Papua New Guinea and a game-changer for the company.
Anna Napoli: And Paul, what can you tell us about the deal with the Chinese at Orokolo Bay?

Paul Mulder: The deal that we have recently announced is with a very experienced mineral sands operator. They've operated in China as well as internationally. They've got a large amount of experience all the way from dredging to dry mining. We see that as an ideal partnership for us. They bring in a funded solution. It's obviously subject to relevant approvals, but provided that those are granted, they have a fully funded solution for us, where we're not going back to Mayur Resources' shareholders at the parent company level seeking more funding. We're able to demonstrate that we're able to keep 51 per cent of the economics, but at the same time we're able to bring a very experienced partner in.

Well, I should say, one of the very important things that we're doing is we're doing a bulk sample, where we're actually going to be trial and doing trial cargoes to the market in proper shipments. The shipments that will go to, say, China or Japan, they'll want to physically trial the material. That's for the steel-making element of our mineral sands, which will be very important for customer acceptance. But once that's done, we can then move those facilities once our mining lease application is granted, then move into full-scale production, which is the funded solution that we have.

The products that we're producing is a vanadium-titanium magnetite, a zircon, a construction sand, and also potentially a ilmenite and a cross between a high-tide product.

Anna Napoli: Last question, Paul. Is there anything else you'd like to add?

Paul Mulder: I think for investors and what they're looking for, we're a diversified company. We have invested our own money, $20 million our own money went in before we publicly listed last year. Management have got their own skin in the game, and that's what investors want to see. They want to see that the actual management have got behind this, not just from an employment perspective, but also from their own money, so we've put significant amount of our own money into this already.

In relation to overall value, as I mentioned, the lime and cement's got a valuation of circa 500 million. We have the mineral sands that has got the valuation of economics we're keeping is around the 70 million Aussie, and we've still got a power project that has a similar valuation again. We see several $100 million of value that can be crystallised in fairly short order, and we're at a market cap of well below $100 million. We see that being a good opportunity for investors to get involved now. We're at the final stages of some big development opportunities, so we would really encourage the investors take a closer look at Mayur.

Anna Napoli: Paul Mulder, thank you for the update.

Paul Mulder: Thank you.