Mayur Resources’ (ASX: MRL) has completed pioneering and site enabling works for the pilot plant at its Orokolo Bay Industrial Sands Project in Papua New Guinea.

Construction crew, mobile machinery, and building materials arrived at the site by barge in mid- February 2020 after a two‐day journey from Port Moresby.

The company’s first priority was the building of the pioneer wharf and 250m long road to the work camp. A mobile timber mill was also established to enable all local timbers to be milled and used in the camp construction.

All clans from the impacted villages have given their full consent and support for the bulk sample and pilot plant operation after their respective clan leaders signed the compensation agreement on October 29, 2019.

Local landowners, clan leaders, and villagers welcomed the arrival of the barge, and along with labour from the local villages worked under Mayur’s supervision to complete the first phase of works and construction camp.

The construction, commissioning and operation of the small‐scale bulk sampling pilot plant represents Stage 1 of our joint venture with China Titanium Resources Holdings (CTRH), whereby Mayur and CTRH have agreed to fund the capital costs of the pilot plant phase on a 50/50 split.

However, Mayur under this funding agreement have exercised its rights to defer 50% of its funding obligations to Stage 2 (Full Scale Plant).

Under the funding agreement with CTRH, CTRH are required to fund 100% of Stage 2 capital by investing up to USD $25 M for an earn in to Mayur Iron of 49%, with Mayur Iron being the 100% owner of the Orokolo Bay project.

The pilot plant will produce up to 100,000 tonnes of iron ore sands per annum to provide test‐scale shipments of product to potential off‐takers. These test shipments are an important pre condition for our offtake partners to form binding long‐term offtake agreements for our planned full‐scale plant (as per Stage 2 of our JV agreement). Processing will involve simple near surface sand extracti􏰀on and separati􏰀on by gravity spirals and low intensity magnets.

Key plant equipment and mobile machinery was purchased in December 2019 and continues to be purchased. CTRH have incurred some coronavirus‐related delays in finalising purchases and assembly of the process plant and while this has caused some uncertainty on timelines CTRH expect to be ready to ship all required plant and equipment in May.

The company will need to apply for a Mining Lease (ML) for the Full‐Scale Plant operation (Stage 2). This will involve further landowner mapping across the proposed ML area, together with compensation agreements with those specifically impacted.

“The pilot plant is a major step in the development of the Orokolo Bay Project, the knowledge obtained will be vital for the design of a full‐scale produc􏰀on plant, as well as support our investment, commercial and sustainability decisions,” Managing Director Paul Mulder said.