- Mayur Resources (MRL) has rewritten the playbook for junior explorers with its unique and innovative corporate strategy
- The materials stock has found success by spinning out their non-core assets, increasing the value of the projects without the costs of dual listing
- MRL carried out a reverse takeover transaction, allowing it to list its gold and copper assets on the TSXV under the new company Adyton Resources
- The move saw not only increased the value of its assets but also allowed Mayur to focus on its other flagship projects across Papua New Guinea
- With a number of other spinouts in the works, the company's leadership team is well placed to make Mayur into the next billion-dollar resources company
- Shares in MRL are trading for 26 cents per share on March 31
Mayur Resources (MRL) has rewritten the playbook for junior explorers with its unique and innovative corporate strategy.
The materials stock has found success by spinning out their non-core assets onto the TSXV, giving shareholders the advantage of being exposed to a new market without the costs of dual listing.
The bold move is one of several savvy management decisions that have placed this junior explorer in a dominant position amongst its competitors.
It's also set Mayur on the path of becoming the next billion-dollar business.
The next big hitter
Before the aforementioned spin-out, Mayur Resource's portfolio was bursting at the seams.
The company had primarily invested in projects which were located in the pacific island nation of Papua New Guinea. The region is a key focus for Mayur, described itself as being invested in PNG's "nation building".
"Mayur Resources have the know-how and the right solutions to generate economic growth for PNG, promoting sustainable living and job creation for a cleaner and greener future, delivering a pathway to nation building," the company states.
Amongst its PNG portfolio were a large-scale cement and lime project, a platform of power generation projects via multiple different fuels, an industrial sands portfolio as well as a number of different copper-gold projects.
In looking over the diverse investments, Mayur's management decided late last year that it needed "greater focus and time" for its core projects.
These include the Orokolo Bay Industrial Sands Project, the Lae Enviro Energy Park and its flagship Central Cement and Lime Project — which was last year handed an unprecedented 20-year mining lease by the PNG Government.
In order to get these national building projects up and running as soon as possible, Mayur began looking into its options. How could it sharpen its focus while still delivering optimal material value?
Controlling interest, maximum value
In the end, Mayur decided on a deal which went to the heart of the company's strategy - preserving diversification whilst still delivering material value.
The materials stock settled on a reverse takeover (RTO) transaction, which would allow it to list its gold and copper assets on the TSX Venture Exchange.
Beyond just lightening Mayur's heavy portfolio load, the move also allowed the company to bypass the hefty costs involved with dual listing, while still remaining a controlling interest in the new company.
Indeed, the ASX-lister walked away from the RTO with 43 per cent interest in the newly listed business, named Adyton Resources, when it first debuted on the TSXV in February this year.
Considering the new business listed with an initial market cap of C$38 million (around A$39.4 million), the spin-out clearly represents a huge increase from the asset's previous value while tied up in MRL.
Commenting on the successful move, Mayur Resource’s Managing Director Paul Mulder explained it was a win-win situation.
"This transaction has demonstrated the intrinsic value of Mayur’s copper-gold assets that the board and major shareholders believed the market was not fully valuing," he said.
"Independent brokers research, prior to the pre spin out, was assigning an average of 7.5 per cent of MRLs share price target to the value of our copper-gold assets. Post spin out this is now 24 per cent to 38 per cent based on the above trading range," he explained.
"This is a win/win for Mayur shareholders and our PNG stakeholders who will now see these assets materially progressed in real-time, with a high calibre and dedicated management team," he added.
Bold steps ahead
Following the clear success of the spin-out, the team behind the junior explorer is keen to keep flipping the rulebook on its head and accelerating shareholder value.
The brains behind Mayur are already considering a number of other spinouts, as the company unrelentingly strives to diversify its business and maximise shareholder returns.
"We have done what we said we would do with our copper-gold portfolio for the benefit of our shareholders and PNG stakeholders. These assets are now valued at many multiples of what they were before the spin-out," Paul said.
"Having appointed Frank Terranova as Adyton MD to lead the copper-gold spin-out, we expect to take a similar pathway with our industrial mineral sands business," he added.
In order to get the new spin-out of its mineral sands business underway, Mayur has already hired experienced mining executive Simon Slesarewich to lead the transaction.
"He now has control of a portfolio of assets, which are significantly more advanced than those vended into Adyton and therefore arguably of far higher attributable value," MRL MD Paul Mulder explained.
"With the support of the Mayur team, Simon will present these high calibre projects, that cover iron ore, industrial minerals and battery metals to the market as pure play businesses," the leader added.
Mayur’s strategy of giving each of its asset their best chance of success is not the typical modus operandi for junior explorers, which are more likely to sell off a non-core asset than spin it out. But, then again, not every small cap is in the business of nation building like MRL.
The management team’s bold approach to acquiring and merging its assets to enable them to achieve their best value has Mayur well placed to become a titan in the material sector.
Billion-dollar businesses are made in the boardroom, indeed.
Shares in Mayur Resources are trading at 26 cents per share at 12:32 pm AEDT on Wednesday, March 31.