Quarterly Report

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Ending 31 December 2021

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mayurresources.com

Highlights

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Corporate

•

Completed $5.85 million financing comprising a $2.85

million equity Placement and a $3 million Loan Agreement

Central Cement & Lime Project

•

Finalised the alignment and locations for the road and

bridge upgrades and commenced geotechnical surveys to

provide direct access to the project in the future

•

Further support for product offtake from Independent

Cement consumers in Australasia with letters of support

now at 1,167,000 tonnes per annum for Clinker and

Cement

•

Finalised the microgrid rooftop Solar project for Kido

Community School with installation expected in February

2022

Iron & Industrial Sands

For•

Secured a 20-year Mining Lease for the Orokolo Bay Iron

and Industrial Sands project that compliments the

environmental conditions that were issued in 2019

•

Strategic delivery, investment partner and project

operator secured with HBS, PNG's leading civil and mining

contractor

  • HBS to commence site establishment works at Orokolo Bay in February 2022
  • Executed a term sheet for supply of magnetite to Leading Japanese Trading House from the Orokolo Bay project
  • Continuing to progress the spin out of Ortus Resources, that holds Mayur's iron and industrial sands portfolio, onto the ASX in 2022 and complete the remaining funding to bring Orokolo Bay project into production

Mayur Renewables

  • Completed a study demonstrating 500MW of renewable solar power potential within the Special Economic Zone (SEZ) that also hosts the Central Cement & Lime Project
  • Signed an MoU with Australian-UK energy storage innovator Gelion Technologies for supply of zinc-bromidenon-flow battery technology to PNG
  • First nature-based forest carbon concessions granted to Mayur preserving and protecting circa 800,000 hectares of PNGs pristine rainforests.
  • Forestry project areas are to be developed as carbon estates to generate high-qualitynature-based carbon credits under UNFCCC REDD+ program

1 Mayur Resources Quarterly Report 31 December 2021

Overview

onlyIt was another quarter of significant developments and milestone achievements across Mayur's portfolio.

A major highlight was the granting of the Mining Lease for the Orokolo Bay iron and industrial sands project. As with the ML for the CCL project this was achieved in record time despite the impacts of COVID. This was followed by the signing of a magnetite offtake agreement with a large Japanese trading house and a cornerstone investment deal

usentered into with HBS.

HBS are due to commence site works at the Orokolo Bay project in February 2022. The site works will support the IPO of Mayur's iron and industrial minerals portfolio via the spin out of Ortus Resources to raise the remaining funds required to complete construction and bring Orokolo Bay into

A total of $0.99 million was spent on exploration and development activities in the quarter, predominantly relating to the Central Cement and Lime Project, and the Orokolo Bay Iron and Industrial Sands Project. An outline of these activities is included elsewhere in this report.

During the quarter, the company made payments totalling approximately $0.15 million to related parties representing remuneration paid to Directors.

Looking forward Mayur's activities will be focussed on the following areas:

  • Community endorsed enabling works and village development projects for the Central Cement and Lime (CCL) Project

production.

• Enabling works for the Orokolo Bay Project, in

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conjunction with the mine construction works to be

Mayur Renewables strategy was significantly advanced with

undertaken by HBS following the recent grant of the

the securing of 800,000 hectares of forestry permits for the

Mining Lease

preservation of highly biodiverse rainforest for carbon offset

• Masterplan Development work for the Mayur-Provincial

projects. The $3 million financing facility with Tribeca Capital

Government-Landowner Special Economic Zone (SEZ), to

Partners will be used to further develop these project areas

build upon the recently completed study that has

into carbon estates under an internationally recognised

identified 500MW of potential solar power capacity

verification standards as Verified Carbon Units (VCU). Mayur

within the SEZ; and

renewables also completed a 500 MW solar power study for

the SEZ and CCL project.

• Planning and scoping studies for the portfolio of

renewables projects being developed by Mayur

Renewables, that includes solar, geothermal, and

forestry carbon estates.

2 Mayur Resources Quarterly Report 31 December 2021

Projects

onlyCentral Cement & Lime Project

The proposed Central Cement and Lime (CCL) Project is a vertically integrated manufacturing facility with the ability

to meet 100% of PNG's cement, clinker and quicklime requirements, displacing imports into PNG, and to penetrate nearby export markets in Australia and the South

Pacific. The co-located quarry, plant site and deep draft wharf will enable very low operating costs. CCL is also seeking to become Asia Pacific's first carbon-neutral Cement and Lime producer.

Offtake support and financing

Offtake support has continued for Phase 1 and 2 of the fully

approved CCL project. Further backing received from

useIndependent Cement consumers in Australasia with letters of

support now totalling 1,167,000 tonnes per annum for

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Clinker and Cement, including blue chip end users and

traders of quicklime and hydrated lime products.

Phase

Products

Letters of Support

Volumes (tpa)

1

Quicklime / Hydrated Lime

400,000*

Limestone

700,000*

2

Clinker & Cement

1,167,000

*refer to ASX announcements dated 13 August 2021 and 25 August 2021

3D visualisation of the vertically integrated Central Cement & Lime Project.

The process to secure strategic JV equity partner(s) to assist with co-development for Phase 1 is continuing.

Road and bridge upgrade works

Works continued and were largely finalised on the alignment and locations for the road and bridge upgrades while geotechnical surveys were commenced on the access road and bridge alignment to connect the project to Port Moresby.

SEZ and Large-scale Solar potential

Following completion of the study by VECKTA demonstrating potential for large scale solar (>500 MW) within the SEZ that also hosts the CCL project. Refinement of CCLs phase 1 hybrid power station was also completed and will focus on an initial 10 Mw of solar integrated with Battery Energy storage and reciprocating engines.

Community projects - microgrid rooftop solar for school

Aa a demonstration of Mayur's commitment to the local community a microgrid rooftop solar system is to be provided to the Kido Community School with installation expected during February 2022. This will provide much needed power for classroom fans, computers and other appliances that are taken for granted in schools in developed nations such as Australia.

Sign erected at entrance to Mining Lease for CCL Project and the SEZ

3 Mayur Resources Quarterly Report 31 December 2021

onlyOrokolo Bay Iron & Industrial Sands Project

The Orokolo Bay Industrial Sands Project in PNG will produce a number of products including titano-magnetite, construction sands and a zircon-rich valuable heavy mineral concentrate. Orokolo Bay Project has been significantly de - risked with the Mining Lease granted and strategic delivery partner secured

use20-year Mining Lease granted

Despite the challenges of the Covid pandemic the Mineral Resources Authority (MRA) was still able to undertake and conclude a detailed assessment of the Orokolo Bay Mining Lease application submitted in December 2020 and in December 2021 the MRA granted a 20-year Mining Lease to

Mayur Iron PNG Ltd.

personalThe grant is the final statutory approval required to allow full-scale production of a multi-product operation, that is

planned to produce 0.5 million tonnes per annum (Mtpa) of magnetite, 1 Mtpa of high-grade construction sand, and up to 10,000 tpa of zircon concentrate with its target markets being Japan, Australia, China and Singapore.

Artist's impression of the Orokolo Iron and Industrial Sands operation For

Magnetite Offtake with Japanese trader

A Term Sheet agreement was signed with a leading Japanese Trading House, for the supply of magnetite on behalf of Asian Steel mills. The non-binding Term Sheet contemplates the parties agreeing to negotiate and finalise commercial sales and purchase contracts, following the satisfaction of various buyer and seller conditions, including test results and the sale of a trial shipment, following the project's planned commissioning in 2022.

Strategic investment by HBS - PNGs leading construction and mining contactor

Following the ML grant and the magnetite offtake agreement a binding Terms Sheet Agreement was executed with leading PNG based construction and mining contactor HBS (PNG) Limited for the delivery of the Orokolo Bay Iron and Industrial Sands Project.

4 Mayur Resources Quarterly Report 31 December 2021

Orokolo Bay Iron & Industrial

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Sands Project (cont.)

The key terms with HBS are :

• HBS to invest in Mayur Iron PNG Ltd via the provision of

construction works, plant and equipment for the Orokolo

Bay Project

• HBS investment represents approximately 27% of the total

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capital expenditure required to bring Orokolo Bay into full

scale production

• In recognition of HBS's early investment in the Project and

commitment as a strategic partner, HBS is to be provided

with a discounted 20% equity holding in Ortus Resources

Limited, the Orokolo Bay Project holding company

• Capital raised from the planned Ortus IPO to be used to

fund the remaining construction of Orokolo Bay

• HBS due to commence construction works at Orokolo Bay

in February 2022 prior to the Ortus IPO

• Remainder of construction works and Contract Mining by

HBS to occur post completion of the Ortus IPO

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• First shipment of products planned for late 2022 / early

2023

Mayur's iron and industrial sands portfolio

Spin Out of Ortus Resources

The Orokolo Bay project is now well positioned as the flagship asset for "Ortus Resources" the entity holding Mayur's iron and industrial sands portfolio, to be listed on the ASX in 2022.

The project economics for Orokolo Bay remain robust given the definitive feasibility study NPV forecast of US$131 million (post-tax (real) , 10% discount rate*) was based on an average life of mine iron ore price of US$66 per tonne (62%Fe).

The HBS funded construction work is planned to commence in February 2022 and includes the provision of people, plant and equipment to complete an agreed early works package. These construction works will occur prior to the planned IPO of Ortus. In the event Mayur does not progress with the development of the Project, or does not complete the IPO, Mayur will cover the costs of this work.

  • For further information refer to Orokolo Bay DFS ASX announcement dated 11 September 2020. The company confirms it is not aware of any new information or data that materially effects the previously disclosed information and that all material assumptions and technical parameters underpinning the estimates in that information on continue to apply and have not materially changed.

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Mayur Resources Ltd. published this content on 31 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 January 2022 05:40:03 UTC.