Mayur Resources Limited (ASX: MRL) is in the business of mineral exploration and energy development, and it is one of the largest tenement holders in Papua New Guinea (PNG). It operates across many divisions like the production of Industrial Mineral Sands, quarrying of large?scale high?grade limestone deposits, power generation and operating under Gold, Copper and Coal exploration licences.
On 13th March 2019, the company announced it has entered into a condition precedent binding offtake agreement with Chinese customer Qingdao Shinebest for vanadium titano-magnetite (VTM) iron sands from the Orokolo Bay Industrial Sands Project in Gulf Province. Under the agreement, offtake of 200,000 tonnes of VTM per annum would be done over the period two years, there after extending annual contracts.
Sinebest has the largest deep?processing enterprise of tailing re?utilization of vanadium?titanium magnetite ore in northern China and has competence in the research, production and sales of furnace maintenance/protecting solvent and titanium concentrate. Since its inception 2004, it has established good relationships with steel making industry and has gained wide recognition for the product quality.
Some of the key terms under the agreement are;
- Under the agreement, the initial requirement for a bulk sample of VTM sands from the Orokolo Bay Stage 1 (Pilot Plant) needs to be fulfilled which is to be used for commercial-scale testing.
- It includes a commercial framework for the offtake of 200,000 tonnes of VTM iron sand per annum which would apply upon acceptance of product quality from the Pilot Plant.
- 200,000 tonnes of VTM iron sand purchase order is conditional upon the successful commercial-scale trial of at least 25,000 tonnes.
- The pricing has been derived by applying a discount factor on the prevailing Platts 62% Fe iron ore pricing index (IODEX) to adjust for the iron (Fe) content of the VTM iron sand and also its titanium content.
- Pricing is conditional upon the roof and floor price mechanism and to be negotiated on an annual basis as per agreed specifications of the delivered VTM iron sands.
Paul Mulder, Managing Director of Mayur Resources, stated, once this project gets in full production it would become a catalyst for the development of the project and follows in succession to the company’s recently announced deal with their JV partner China Titanium Resources Holdings Limited (CRTH). He also stated that VTM iron sands might also benefit from the recent surge in iron ore prices.
On 5th March 2019, the definitive transaction documents between MR Iron PNG Pte Ltd (MIPP) and China Titanium Resources Holdings Limited (CTRH) were already been executed, relating to the development of Mayur’s Orokolo Bay Industrial Mineral Sands project in Gulf Province, PNG.
On 21st February 2019, the company announced its 1HFY19 results where the reported profit decreased significantly by 92%.
On the technical front, the stock traded flat at A$0.540, as of 13th March 2019 compared to the previous closing of A$0.540. The stock has fallen by more than 8% in the last month, accounting to the total YTD return of negative 20%.
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