The share price of Mayur Resources rose 17% on the ASX on Tuesday as the company finalised the funding structure for its Orokolo Bay mineral sands project, in Papua New Guinea.

Mayur has executed a series of legally binding contractual agreements with Indonesia-based PT SEA First Nickel Industry (PTSFNI), which will gain a 51% equity stake in the project.

PTSFNI has agreed to fully fund the development of the Orokolo Bay project through to nameplate capacity output of 400 000 t of vanadium titano magnetite (VTM) concentrate, 100 000 t of dense medium separation material, one-million tonnes of construction sand and 10 000 t of zircon concentrate.

Should the development of Orokolo Bay exceed A$25-million, PTSFNI will top up the funding and receive priority repayment of that additional amount.

PTSFNI also has the exclusive right to earn a 51% ownership stake in four of Mayur Resources’ other mineral sands projects.

In addition, the Indonesian company will become a significant shareholder in Mayur Resources through an offmarket placement, acquiring 9.9% of the company at a 15% premium to the 30-day volume weighted average price before the announcement.

The placement entails 33.27-million shares at 22c a share.

Mayur’s stock closed at 24c a share on Tuesday.