Mayur Secures US $25Mn Funding for The Development of Orokolo Project

Mayur Resources Limited (ASX:MRL) has stated in the latest update, that its 100% owned subsidiary MR Iron PNG Pte Ltd (MIPP) has signed a legally binding term sheet with China Titanium Resources Holdings Limited (CTRH) relating to the development of Mayur’s Orokolo Bay Industrial Mineral Sands project in the Gulf Province with Pilot scale bulk sampling planned to commence in Q3 of the 2019 calendar year. The key highlights of the above-mentioned developments are as follows:

• Mayur Resources Limited has secured up to US$25 million in funding from China Titanium Resources Holdings Limited (CTRH) for a 49% stake in MR Iron PNG Pte Ltd (MIPP).
• MIPP is a 100% owned subsidiary of MRL and holds the Orokolo Bay Project as part of a highly prospective industrial mineral sands portfolio in Papua New Guinea (PNG).
• Legally Binding Term Sheet signed with Definitive Transaction Documents expected to be completed by the end of January 2019.
• CTRH has secured exclusivity and made a legally binding commitment to co?fund the Orokolo Bay Pilot Plant and fund the Full?Scale Operation up to US$25 million.

The Orokolo Bay Project is slated to be developed in two stages:

1. Stage 1 ? Pilot Plant. Comprising the construction, commissioning, and operation of a Pilot-scale bulk sample that is already environmentally permitted to produce up to 100,000 tonnes of iron ore sands per annum principally.
2. Stage 2 ? Full-Scale Plant. Subject to the outcomes of the Pilot Plant Bulk Samples including customer acceptance of the product, obtaining permits and landowner consents as well as the Definitive Feasibility Study. It is proposed to expand the capacity of the Pilot Plant to achieve a total production capacity of 800 tonnes per hour run of mine (ROM) feed rate.

According to the Legally Binding Term Sheet, CTRH has agreed to provide up to US$25 million for constructing Pilot Plant and Full?Scale Plant on the following terms:

a) CTRH to fund 50% of the Maximum Budget for the Stage 1 Pilot Plant that is to be agreed between the parties. MRL will provide the remaining 50% of the Maximum Budget for the Stage 1 Pilot Plant but may at its sole option defer payment of 50% of its funding obligation for the Stage 1 Pilot Plant. In that case, CTRH will fund 75% of the Maximum Budget for the Stage 1 Pilot Plant.

b) Should the conditions precedent for proceeding to the Stage 2 Full-Scale Plant be met CTRH will fund the capital expenditure for the Stage 2 Full-Scale Operation subject to the total funding provided by CTRH for both the Stage 1 Pilot Plant and the Stage 2 Full-Scale Operation not exceeding US$25 million.

c) CTRH will receive a 2% equity interest in MIPP for each US$1 million in funding contributed by CTRH, provided that CTRH’s total equity interest in MIPP is capped at 49%.

d) CTRH will be solely responsible for funding the operating costs of the Stage 1 Pilot Plant and the related bulk sampling program during the operation of the Stage 1 Pilot Plant.

e) Although it is considered extremely unlikely, to the extent that additional funding above US$25

Million is required for the construction of Stage 2 Full-Scale Project. In that case, MRL shall provide loans to MIPP with those loans being repaid, from the cash flows generated by MIPP from the operation of Stage 2 Full-Scale Plant.

MRL still retains a 51% interest in the minerals and exploration license portfolio that MIPP holds across the Gulf of Papua, that offers the potential for further expansion projects.

The suspension on the securities of the MRL has been lifted from the 7th of January 2019, on account of the declaration by MRL of an announcement related to the project investment in the subsidiary of the MRL.

Meanwhile, the stock price of the company has fallen by 4.29 percent in the past six months as on 21 December 2018. After the lift of suspension, the stock ended the day in green, and the stock price got settled at $0.675 per share which reflects that the stock has risen $0.005 per share or 0.746% with the market capitalization of circa $56.55 million as on 7 January 2019.

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