Ironbark Zinc Ltd (ASX:IBG) has hosted US EXIM Bank representatives and principals from its prospective equity and operating partner LNS A/S at the Citronen Zinc-Lead Project in Greenland for due diligence and value-adding purposes, a major step in reaching a final investment decision (FID) for the asset.
EXIM has expressed its interest to become a cornerstone investor for Citronen’s development with a preliminary project letter (PPL) outlining the firm’s intention to extend up to A$927 million (US$657 million) for the advancement of the project.
Read: Ironbark Zinc project validated by prospective cornerstone investor
This site visit fulfills one of the major due diligence conditions for a final credit decision by the EXIM board – the next step will be in-country meetings between EXIM’s representative RPM Global’s Social and Governance team and key government and community stakeholders in Greenland, expected to occur in December.
Ironbark remains bullish on zinc’s prospects
“Today’s reset provides, I hope, welcome clarity for Ironbark shareholders,” Ironbark Zinc managing director Michael Jardine said.
“2022 has been a very tough market in which to advance a major equity raise for a large frontier project like Citronen.
“Despite the significant progress made with, and the support of, US EXIM Bank, we have nonetheless been obliged to now adjust our expectations with respect to reaching an FID milestone in 2022.
“We do however remain very bullish on zinc’s long-term prospects as the world looks to a decarbonised future, and the role of Citronen Project to meaningfully supply into that market.
“There is much to be positive about with new growth markets quickly emerging in wind and solar on top of a well flagged reduction in supply from some of the world’s largest producing mines, let alone the lack of investment in new ones.
“This trend is extremely positive long term for Ironbark and as the necessary macro stability investors need for greenfield project developments returns, we intend on being ready.”
Site visit highlights project potential
Ironbark’s prospective equity and operating partner at the Citronen Project, LNS A/S, also participated in the site visit as part of a continuing due diligence process under the memorandum of understanding (MoU) between the two companies.
The visit from LNS provided Ironbark with an opportunity to inspect the infrastructure and asset base that LNS operates in Longyearbyen, Svalbard.
The visit strengthened IBG’s view that LNS would be a compelling partner for Citronen’s development, given the company’s long, successful track record in mining operations with very similar ground conditions to Citronen.
At the same time, suggestions from attending exploration geologists and other consultants underscored the opportunity to unlock more of Citronen’s potential before an FID is made.
“In the short term we will be evaluating additional strategies for bringing new investment in at a project level; the site visit highlighted that there is much that could be achieved in the field in the next year or two to further enhance the investment case,” Jardine continued.
“Substantial infill and regional exploration potential was highlighted by our geological consultants, as were opportunities to consider a modest early works program to enable smoother and longer field seasons.
“Also highlighted was the opportunity to consider alternative energy solutions for the on-site power grid. Ironbark has much to be positive about.”