Ironbark Zinc Ltd (ASX:IBG) has inked a non-binding Memorandum of Understanding (MoU) with Norwegian group Leonhard Nilsen & Sønner (LNS) regarding a possible equity investment in and contractual arrangements for the flagship Citronen Zinc-Lead Project in Greenland.
Under the MoU, LNS has the option to take or earn an equity position in the project in return for preferred contractor status on three key components of the project:
- Civil construction contractor during the construction phase;
- Mining contractor during the operations phase; and
- Logistics management for both phases
Start of “valuable relationship”
“This is the beginning of what I anticipate will be a fundamental, long-term and valuable relationship between Ironbark and LNS A/S,” Ironbark Zinc managing director Michael Jardine said.
“With their background in Arctic and Antarctic construction and mining, there are few – if any – groups anywhere in the world better qualified to help execute the vision we have for the Citronen Project.
“The challenges of undertaking an Arctic project for Ironbark would be significantly reduced with the project support and participation of LNS.
“This MoU potentially marries together the world-class Citronen deposit with the LNS team’s extensive experience in building and operating high latitude projects.
“I am personally very invested in making this MoU a success and look forward to working closely with LNS in taking Citronen from concept to reality.”
In addition to the elements above, the MoU includes a provision for broader commercial arrangements between the two companies, to be executed in two phases:
- Phase 1 – confirmatory due diligence by LNS on the Citronen Project, including provisional agreement on terms to proceed to Phase 2; and
- Phase 2 – subject to Phase 1 successfully concluding, agreement of a Term Sheet relating to an equity investment by LNS A/S in the Citronen Project, along with the accompanying commercial agreements.
LNS president Frode Nilsen said: “The Citronen Project is unique and this MoU opens for LNS to contribute with our knowledge and competency in the further development of the Citronen Project.
“The Arctic is our home turf, and our experience fits very well with what Ironbark is requiring.
“I’m looking forward to continuing our cooperation and good work into the next phase of the project.”
This non-binding MoU has an initial term of 12 months from signing, subject to any further date agreed by the companies, and will not have any financial impact unless a binding agreement is brokered.