Ironbark Zinc Ltd (ASX:IBG) will extend its non-binding Memorandum of Understanding (MoU) with Norwegian Arctic specialist Leonhard Nilsen & Sønner(LNS) for a further 12 months.
The extension comes on the same terms as agreed in May last year.
The companies are working together to develop the flagship Citronen Project in Greenland.
Read more: Ironbark Zinc secures MoU with Norwegian Arctic specialist to develop flagship Citronen Project in Greenland
Potential partnership
IBG managing director Michael Jardine hopes to extend the partnership with LNS beyond the MoU.
“We have come to know the LNS business, including its people and execution capabilities, very well in the last year and we are delighted to have this MoU in place for a further 12 months,” Jardine said.
“LNS, having visited Citronen Fjord as part of the US EXIM Bank site visit in July 2022, is likewise keen to extend the window to strike a potential partnership with Ironbark regarding progress at the Citronen Project.
"This MOU extension comes as Ironbark continues to focus on its refined equity JV partner search at Citronen, as well as working with US EXIM Bank and its advisors on addressing the gaps identified in the successful 2022 due diligence program.
“The board and executive remain committed to advancing Citronen but, recognising its likely timeline, are also strongly engaged in new business development activities. More detail will be provided on this at the appropriate time.”
The Citronen Project
In 2021, Ironbark completed a bankable feasibility study (BFS) for Citronen that presented several highlights including substantial exploration upside.
The BFS illustrated:
- Robust economics with the 3.3 million tonnes per annum operation to deliver a post-tax free cash flow of US$1.46 billion.
- Post-tax NPV8 of US$363 million; IRR 15.2%; Capex US$654 million.
- Significant leverage to future zinc price growth; 2.5 million tonnes zinc metal produced LOM averaging ~130,000 tonnes per annum.
- Competitive C1+sustaining capital costs per pound: Years 1-5 US$0.68/lb; LOM US$0.76/lb.
- 50% increase in mine life to 20 years in a low-risk jurisdiction and emerging mining frontier.
- ESG approvals and management plans are well advanced: Process underway to ensure full compliance with Equator Principles and relevant IFC performance standards.
- Binding offtake agreements remain in place with major shareholders Trafigura (35% of LOM production) and Glencore (LON:GLEN) 35% (10 years zinc, LOM lead).
- IBG to now commence formal project financing process with United States EXIM Bank.
- Mineral resource of 85 million tonnes at 4.7% zinc & 0.5% lead.
- Significantly expanded ore reserve of 48.8 million tonnes at 4.8% zinc & 0.5% lead.