MRL is pleased to announce the signing of a Non-Binding Exclusive Term Sheet (“Term Sheet”) with S&F Investment Advisors Ltd and ACAM LP (the "Investor"), for a proposed USD $50 million investment in MRL and its 100% owned MRCL subsidiary (the “Proposed Transaction”).
Additionally, the Company is also pleased to announce an AUD $5 million placement to existing sophisticated investors to fund Stage 2 and part of Stage 3 wharf facilities for MRL’s CLP, located in the Central Province of PNG. This will provide the CLP with commercial scale wharf infrastructure, enabling opportunity for early cashflow opportunities in calendar year 2024 from raw limestone production.
Richard Pegum, Chairman of Mayur Resources, said: “We are extremely pleased to have entered this arrangement with ACAM LP, which represents a transformational investment for MRL. ACAM LP’s proposed investment will enable MRL to push ahead with our mission of developing mineral projects that deliver higher quality, lower cost, inputs for the mining and construction industries.”
“The AUD $5 million share placement with existing sophisticated investors will be integral to our CLP, ensuring that the early construction works can continue for the benefit of the ongoing development of the project with the aim of producing early cash flow revenues in late 2024.”
“The work completed by S&F Investment Advisors to date, including a site visit and the commencement of discussions with our debt financier, Appian, further gives me confidence in their ability to swiftly go through their final confirmatory phase.”
USD $50 MILLION INVESTMENT FROM ACAM LP
The proposed USD $50 million (minus capital raising fees) has been earmarked to fully replace Vision Blue’s funding for the CLP and retire debt at the parent company level.
Key Terms of the Term Sheet:
- From the proposed USD $50 million investment, funds are to be allocated between MRL and its 100% owned subsidiary MRCL, with ACAM LP or an affiliate becoming a “substantial shareholder” in MRL at completion.
- USD $40 million equity is to be made available alongside the contemplated announced Appian Capital Advisory LLP (“Appian”) USD $70m base debt facility (“Debt Facility”). The debt facility is subject to conditions precedent on items including, but not limited to, the project’s complementary equity funding meeting Appian’s commercial requirements, product offtake, and finalization of project documentation with the PNG Government.
- Retire AUD $9.2m of MRL debt (currently repayable in November 2024).
- The capital allocation of the proposed USD $50 million and associated percentage equity ownership split in MRL and MRCL shall be agreed between the Investor and MRL prior to the closing of definitive transaction documents (“DTD”). Subject to the allocation of equity between MRL and MRCL, shareholder approval may be required for the quantum relating to MRL.
- Shares to be issued as new shares, ranking pari-passu with existing shares.
- Investor entitled to hold Board of Director positions on the MRL and MRCL Boards, to be determined prior to the closing of DTD’s. o
- Investor has the first and last right of refusal at the subsidiary project level as the primary equity capital partner covering CLP phase 1, CLP’s expansions, the clinker and cement works, and other current and future projects within Mayur's portfolio in PNG.
- The Term Sheet is non-binding save for terms related to exclusivity, costs and confidentiality.
- The closing of the transaction is subject to conditions precedent including due diligence, the negotiation and execution of legally binding documentation, and agreement with Appian on revisions to the Appian Debt Facility acceptable to the Investor and Appian, including for ACAM to replace Vision Blue as the cornerstone equity provider.
- ACAM has been granted a 6-week period of exclusivity in which to close the transaction / enter into definitive legally binding documentation.
Ross McCormick of S&F Investment Advisors said: “We and ACAM are pleased to have entered into this non-binding Exclusive Term Sheet with the Company following a period of due diligence and productive discussions with key PNG Ministerial and Government Agency heads in Port Moresby. The PNG Government re-enforced that MRL’s long-term commitment to downstream processing and export manufacturing is highly welcome and supported by the PNG Government. Our site visit to the CLP provided firsthand insights into MRL's potential to become a world-class building materials supplier.”
AUD $5 MILLION PLACEMENT TO FUND WHARF FACILITIES AT PNG CENTRAL LIME PROJECT
Mayur has also completed an AUD $5 million placement to existing sophisticated investors (the Placement).
Proceeds from the Placement will be used to prioritise Stage 2 and part of Stage 3 wharf facilities for the CLP, with the Company targeting early cash flow revenues from the sale of limestone and other raw products in late calendar 2024.
The Placement will be completed through the issuance of 25,000,000 CDI’s / shares* at an issue price of $0.20 per share, which is consistent with the Company’s 60 trading daw VWAP.
The issuance of 9,000,000 CDI’s / shares* will occur within the Company’s existing ASX Listing Rule 7.1 placement capacity. Settlement of this portion of the Placement is anticipated to occur on 26 June 2024.
The balance of the Placement shares (comprising 16,000,000 CDI’s / shares*) will be subject to the approval of MRL shareholders at a General Meeting of Shareholders, which is anticipated to be held in late July 2024. A date for this meeting will be announced shortly.
The existing sophisticated investors who participated in this Placement approached MRL to invest at this time, to ensure that key development workstreams in relation to Stage 2 and part of Stage 3 wharf facilities (as detailed above) and other civil and related works are able to continue in alignment with the Company’s timeline, for the benefit of the ongoing development of the project and with the objective of producing early cash flow revenues.
ADVISORS
The Company has appointed Tamesis Partners LLP (“Tamesis”) as its financial advisor in relation to the proposed transaction. This appointment is in line with customary terms for an appointment of this nature. Tamesis will receive 5% of all equity funds raised.
NEXT STEPS
Over the next 6-week period (being until 6 August 2024), final documentation and confirmatory due diligence shall be conducted on an exclusive basis, where it is anticipated that final documentation will be executed, and funding drawn.
