China Titanium Resources Holdings Limited (CTRH) has paid US$25 million for a 49% stake in the Orokolo Bay industrial mineral sands project in Papua New Guinea.

The investment was made into MR Iron PNG Pte Ltd (MIPP), which is a wholly owned subsidiary of Mayur Resources Limited (MRL), which is listed on the Australian Securities Exchange (ASX).

MIPP holds the Orokolo Bay Project as part of an industrial mineral sands portfolio along the southern coast of Papua New Guinea. Planned products include fine grain construction sands for transport to the Sydney market, and titanomagnetite for steelmakers in Asia and for use as dense medium separation for coal washing end users in Australia, and a zircon rich valuable heavy mineral concentrate (VHMC) for Asia.

The Orokolo Bay project has no requirement for chemical processing, but involves simple near surface ripping and then sand extraction that is separated by gravity and low intensity magnets, with the vast majority of the sand being placed back from where it was taken.

The next steps on the project include preparation of a definitive feasibility study, and construction of a pilot demonstration plant.

"CTRH bring core operational capability in mining these types of projects, and in addition to providing development capital funding CTRH will also take on working capital and operational risk through the Orokolo Bay pilot plant phase while agreeing to take on funding responsibility up to US$25 million and build the stage 2 full scale plant," comments Paul Mulder, the managing director of Mayur.

He added that this is a positive outcome for Mayur shareholders, since an external funding source has been secured, whilst Mayur retains a 51% stake in the potential future economics of the project.

"We are confident that we will deliver vanadium titano magnetite (VTM) and construction sands fit for the market demand at a low cost," adds Chen Hui, director, China Titanium Resources. There is also a possibility of future downstream integrated steel production.

Mayur Resources is a diversified mineral exploration, development and energy company operating in Papua New Guinea. It holds the Feni Island Project in New Ireland Province, is developing a vertically integrated domestic power project at PNG's second largest city of Lae, and holds a portfolio of exploration licenses in Gulf Province that includes the Depot Creek Coal project.