Mayur Resources : DFS Update For CCL Quicklime Project Phase 1

ASX Announcement

26 July 2022

UPDATED DFS FOR CENTRAL CEMENT AND LIME PROJECT:

	Prioritising delivery of high-quality lime products via Phase 1
Mayur Resources Limited (Mayur or the Company) (ASX:MRL) is pleased to present an update to the Central
only
Cement and Lime (CCL) Project Definitive Feasibility Study (DFS), originally delivered in 2019.
This updated DFS is focused solely on the first phase of an amended two-phase development schedule being:
use	• Prioritised and expanded 400ktpa quicklime/hydrated lime plant (doubling the 200ktpa capacity from the
2019 DFS), and additional 500ktpa of raw limestone production with wharf and associated infrastructure
(CCL Phase 1); and

The CCL Phase 1 DFS follows the Company's strategic review released in October 2021, where a decision to prioritise the phased development of the CCL project was taken, given the importance and growing criticality for quicklime in future facing minerals. The Updated DFS for CCL Phase 1 demonstrates that project phasing yields:

• A significantly lower upfront capital requirement;
• High economic viability;
• Rapid delivery of quicklime product into an escalating price and demand environment; and
• A swifter pathway to cashflow generation.

Forpersonal
	CCL Phase 1 is set to deliver low-cost,high-quality local and seaborne high grade raw limestone and quicklime
	products to be supplied to numerous existing markets and future-green facing mineral industries. Construction of
	CCL Phase 1 is subject to financing with site works scheduled to begin as early as Q4 2022.
	CCL Project Spotlight: CCL Phase 1:
		CCL Phase 1	CCL Phase 2

Level 7, 300 Adelaide Street

Brisbane Queensland 4000

Phone [phone]

mayurresources.com

Mayur Resources Limited | ARBN 619 770 277 | ASX: MRL

CCL Phase 1 DFS Highlights (refer Attachment A for further details)

	• Construction of twin-kiln 1,200 tonne per day combined manufacturing capacity
	• Annual production of 400 kt quicklime and hydrated lime plus 500 kt raw limestone
only	• Planned production from Phase 1 supported by various arrangements with high quality offtake customers 1
• Scaled infrastructure for Phase 1 includes wharf, power station and access road
	• Reduced upfront capital cost estimate of USD91.03 M
	• Attractive CCL Phase 1 projected economics:
		- Post tax revenue USD1,518 M and EBITDA USD771 M over 30-year project life
		- Post tax NPV8% USD133.5 M and IRR of 24.4% (up from an NPV of USD69M 2)
use	• Average operating costs USD49.82/t highly competitive relative to Southeast Asian quicklime and
	hydrated lime producers
	• Mine plan supported by existing 45 Mt quicklime grade limestone Ore Reserve3 with zero strip ratio
	• Large (>300 Mt) additional JORC Mineral Resources4 inventory capacity supports future expansion
	• Special Economic Zone (SEZ) status granted providing a range of tax and fiscal incentives
personal	• Mining Lease and Environment permit granted with support from State and Provincial Government
• Enhanced social attributes with community projects and engagement well advanced
•	subsequently
	Dual fuel kiln design adopted to enable lower emissions and mitigate fuel risk exposure

• Hybrid power station - future option to provide up to 40% of electrical load via renewable solar generation

• Access to nature-based carbon offsets (originated from within PNG via Mayur Renewables5) to offset hard-to-avoid emissions and provide customers with net zero products from CCL

• CCL Phase 2 targeting 1.65 Mtpa clinker and 907.5 ktpa cement grinding capacity to proceed

Mayur Managing Director, Mr Paul Mulder, commented "We are pleased to present an enhanced and updated CCL Project DFS, which prioritises and increases quicklime production capacity and delivers attractive revised project economics. Quicklime and hydrated lime, whilst relatively unknown are critical inputs for processing battery and future green facing metals, pollution abatement, treatment of acidification and water purification. CCL Phase 1 directly responds to the significant tightening in quicklime product availability and rising market prices, providing Mayur with a special market opportunity. By taking a dual phase approach, we can lower the initial upfront capital

hurdle, increase kiln capacity and bring quicklime production to market sooner." For

1. Refer to ASX release dated 25 August 2021 Quicklime Offtake Support and 13 August 2021 Customers confirm support for Mayur's lime products
2. Refer to ASX release dated 12 July 2022 - Letter from Managing Director to Shareholders
3. Refer to maiden Ore Resource estimate contained in ASX release dated 24 January 2019 and subsequently updated as attached to this announcement
4. Refer to maiden Mineral Resources estimate contained in ASX release dated 12 January 2018
5. Refer to ASX announcement dated 20 June 2022 - Agreement with Santos on carbon offset projects

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This announcement was authorised by Mr Paul Mulder, Managing Director of Mayur Resources Limited. For more information:

Paul Mulder	Michael Vaughan
Managing Director	Fivemark Partners
only	Mobile: [phone]
Phone [phone]
[e-mail]	[e-mail]

ABOUT MAYUR

Mayur Resources Limited is focused on the development of natural resources and renewable energy in Papua New Guinea. Our diversified asset portfolio spans iron sands, lime and cement, battery minerals and renewable power generation. Mayur also holds a 43% interest in copper gold explorer/developer Adyton Resources, a company listed on the TSX-V (TSXV:ADY).

Mayur's strategy is to serve PNG and the wider Asia Pacific region's path to decarbonisation by developing mineral projects that deliver higher quality, lower cost, and "net zero" inputs for the mining and construction industries, as well as

useconstructing a renewable energy portfolio of solar, geothermal, forestry carbon credit estates, and battery storage. Mayur is committed to engaging with host communities throughout the lifecycle of its projects, as well as incorporating internationally recognised Environmental, Social and Governance (ESG) standards into its strategy and business practices.

COMPETENT PERSON'S STATEMENT

Statements contained in this announcement relating to Mineral Resources and Ore Reserves estimates for the Central

personalCement and Lime Project are based on, and fairly represents, information and supporting documentation prepared by Mr. Rod Huntley, who is a member of the Australian Institute of Geoscientists. Mr. Huntley has sufficient and relevant experience

that specifically relate to the style of mineralisation. Mr Huntley qualifies as a Competent Person as defined in the Australian Code for Reporting of Identified Mineral Resources and Ore Reserves (JORC) Code 2012. Mr Huntley is an employee of Groundworks Pty Ltd contracted as a consultant to Mayur Resources and consents to the use of the matters based on his information in the form and context in which it appears. As a competent person Mr Huntley takes responsibility for the form and context in which this Ore Reserves Estimate prepared for the Central Cement and Lime Project appears.

FORWARD LOOKING STATEMENT AND IMPORTANT INFORMATION

This announcement includes "forward looking statements" within the meaning of securities laws of applicable jurisdictions. Forward looking statements can generally be identified by the use of the words "anticipate", "believe", "expect", "project", "forecast", "estimate", "likely", "intend", "should", "could", "may", "target", "plan" "guidance" and other similar expressions. Indications of, and guidance on, future earning or dividends and financial position and performance are also forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Mayur and its officers, employees, agents or associates, that may cause actual results to differ materially from those expressed or implied in such statement. Actual results, performance or achievements may vary materially from any projections and forward-looking statements and the assumptions on which those statements are based. Readers are cautioned not to place undue reliance on forward looking

Forstatements and Mayur assumes no obligation to update such information.

NON-IFRS MEASURES

The Company supplements its financial information reporting determined under International Financial Reporting Standards (IFRS) with certain non-IFRS financial measures, including cash operating costs, All-In Sustaining Cost, EBITDA, NPV, IRR and project payback. The Company believes that these measures provide additional meaningful information to assist management, investors and analysts in understanding the financial results and assessing our prospects for future performance.

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ATTACHMENT A - CCL Phase 1 Summary (2022)

1 Overview

For personal use only

Mayur Industrials PNG Ltd (the Company) commissioned Siecap Pty Ltd to project manage an updated Definitive Feasibility Study (DFS) for the establishment of a Phase 1, standalone, integrated quicklime and hydrated lime production plant, limestone quarry and supporting infrastructure project.

This Updated DFS (referenced as the CCL Phase 1 DFS) builds upon the previous Central Cement and Lime Project DFS completed in January 2019 that contemplated the delivery of a combined integrated Clinker, Cement and Quicklime production facility (the 2019 DFS).

Since completion of the 2019 DFS, the Company has advanced the project, notably securing a 20-year Mining Lease in August 2020 followed by a Special Economic Zone (SEZ) granted in September 2021. During this period the potential of a nearer term opportunity to supply quicklime to PNG and Australia/South Pacific markets, to support the growing precious metals and battery minerals markets, also emerged.

These market factors, coupled with the lower capital cost and project complexity as well as a faster path to revenue, have led the Company to prioritise the delivery of the quicklime plant as the first phase of the CCL project. Therefore, the CCL Phase 1 DFS assumes that the clinker and cement plant (and other quarries within the Mining Lease) will be developed subsequently on a staged basis (i.e. CCL Phase 2).

Whilst this staged approach has been contemplated by the CCL Phase 1 DFS, it should be noted that financial and/or economic impacts of Phase 2 have not been modelled as part of this study and shall be released to the market in due course. Table 1 summarises this approach.

Table 1: CCL DFS Study Summary

	STUDY SCOPE			COMMENT
	Full CCL Project (Clinker/Cement and Quicklime) (2019 CCL DFS)		Completed January 2019
	Quicklime Plant (inc. Kido quarry and infrastructure)(CCL Phase 1)		Completed July 2022 (this study)
	Clinker and Cement Plant (CCL Phase 2)		Not covered by this study

The CCL Phase 1 DFS is for the initial stage (Phase 1) of the full CCL development and concerns the standalone, greenfield development of an integrated quarry and quicklime manufacturing facility with associated power station and marine facility all co-located on the coast in Central Province, PNG, hereafter referred to as the Project.

The study indicates that the Project will be robust and develop healthy margins with current forecast life-of- project (LOP) revenue of USD1,518 M and LOP Project EBITDA of USD771 M over an estimated 30-year project life. This is supported by the 45 Mt Ore Reserve at the Kido deposit. The JORC Mineral Resource of 144 Mt at Kido may enable the extension of the project beyond 30 years, the expansion of the quicklime plant capacity (i.e., additional kilns) and the delivery of the clinker and cement plant in the future (Phase 2).

A summary of key CCL Phase 1 outcomes is provided in Table 2.

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Table 2: CCL Phase 1 DFS outcomes

For personal use only

STUDY OUTCOMES

Estimated Life of Project (LOP)	30 years
Capex	USD 91.03m
Post-tax NPV (8%) real, ungeared on 100% basis	USD 133.5m
Internal Rate of Return (IRR)	24.4%
Initial FOB (Kido) product pricing (real)*
Quicklime price (average weighted selling price)	USD 100 /t
Hydrated lime price (average weighted selling price)	USD 120 /t
Limestone (export)	USD 11 /t
FOB operating Costs* (per product tonnes)
Operating costs - quicklime	USD 49.82 /t
Operating costs - hydrated lime	USD 46.72 /t
Operating costs - limestone	USD 4.45 /t
All In Sustaining Costs^ (AISC)
Operating costs - quicklime	USD 52.34 /t
Operating costs - hydrated lime	USD 49.44/ t

*FOB (Free on Board) means that the seller (Mayur Industrials) is responsible for transportation of the product to Kido wharf for shipment, plus ship loading costs. The buyer pays the cost of marine freight transport, insurance, unloading, and transportation from the arrival port to the destination.

• AISC (All in Sustaining Costs) includes Mining and Haulage, Processing, Power, Maintenance, Port Operations, Indirect, Corporate Overheads, Royalties, Sustaining Capital. Noting that overheads are allocated to quicklime and hydrated lime products only.

Mayur Industrial's objectives for the Project are to:

• develop a project that is technically and commercially robust and proven in nature, utilising modern manufacturing technology and ensuring that production is in the bottom quartile of manufacturing cost in the Australian, Pacific and Asian markets;
• produce competitively priced, high-quality quicklime, meeting Australian standards (AS 1672.1) suitable for the PNG, Australian and Pacific markets;
• commence the Project with an upfront focus on value optimisation to minimise capital expenditure (CAPEX) and operating expenditure (OPEX);
• commence product sales and revenue growth to support phase 2 of the project
• preserve the optionality and value for the development of the clinker and cement production facilities at a future point in time (i.e. Phase 2);
• develop a project that is environmentally sustainable with the lowest possible carbon footprint with a plan to ultimately achieve net zero carbon via a pathway of decarbonisation, and
• develop a project that is consistent with Mayur Resources' Nation Building agenda for PNG that will provide long term legacy infrastructure and opportunities that positively impact the surrounding communities.

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