Mayur Resources (ASX:MRL) has executed a non-binding term sheet with an undisclosed Japanese trading house for the supply of magnetite ore from its Orokolo Bay Iron and Industrial Sands Project in Papua New Guinea.
The term sheet outlines a working relationship which will see the parties negotiate and finalise commercial sales and purchase contracts, subject to meeting conditions from both buyer and seller including the completion of a trial shipment post project commissioning in 2022.
“we see this support as a great vote of confidence in our Orokolo Bay project with blue chip customers continuing to engage with Mayur to source magnetite for their steel making purposes”
Addressing the update, Mayur Resources Managing Director Paul Mulder said: “Whilst we are unable to announce full details around the Term Sheet, due to confidentiality provisions, we see this support as a great vote of confidence in our Orokolo Bay project with blue chip customers continuing to engage with Mayur to source magnetite for their steel making purposes.
This deal contributes to the momentum we’ve made recently at Orokolo Bay with the grant of the 20-year Mining Lease as announced yesterday. The project is on track for development and commencement of operations next year. Orokolo Bay is the flagship asset in the planned spin out of our iron and industrial sands business on the ASX, to be named Ortus Resources Limited.”
CEO of Mayur’s Iron and Industrial Sands business Simon Slesarewich added: “Orokolo remains an attractive fully permitted and shovel ready development with the ability to produce multiple products providing protection through the various iron ore pricing commodity cycles, and this de-risking is highly valued by customers. Customers have confirmed they have been disappointed that various magnetite swing producers, with similar products as Orokolo Bay, entered the market during an environment of elevated iron ore prices and now with reduced pricing have exited the market.
We look forward to bringing Orokolo Bay into production in 2022 and we will use this agreement as an important catalyst to complete the funding requirements for construction now that we have the Mining Licence, which includes the listing of Ortus Resources on the ASX in 2022.”
The company says that the agreement as a ‘critical step’ in the development of the Orokolo Bay project which is expected to produce 500,000tpa of magnetite, 1,000,000tpa of high-grade construction sand, and up to 10,000tpa of zircon concentrate.
