THE BOURSE WHISPERER: Ironbark Zinc (ASX: IBG) has entered into a new non-binding Memorandum of Understanding (MoU) with China Non-Ferrous Metal Industry’s Foreign Engineering and Construction Co. Ltd. (NFC).
The MoU follows the completion of a Feasibility Study on the company’s Citronen base metal project in Greenland and following due diligence and site visits by senior NFC personnel.
This MoU replaces the previous MoU which was not based on a Feasibility Study or due diligence being conducted.
Ironbark explained the new MoU provides it with greater advantages than the previous MoU as it operates directly between Ironbark and NFC with no intermediary and is founded on a strengthening in the relationship between Ironbark and NFC.
NFC is one of China’s leading construction and engineering groups and builds, owns and operates base metal mines, processing plants and smelters around the world. NFC undertakes international contracted engineering, equipment and labour services and is rated globally as a high quality engineering house.
“We are delighted that a group with the expertise and scale of NFC has provided its support and cemented its relationship with Ironbark,” Ironbark Zinc managing director Jonathan Downes said in the company’s announcement to the Australian Securities Exchange.
“The new MoU shows not only support of the Citronen project but comfort with Greenland as a development destination.
“While the zinc market remains challenging, it faces uniquely positive future opportunities which will provide a strong platform to support the development of Citronen.”
The Citronen project currently hosts in excess of 11 Billion pounds of zinc and lead.
The current JORC-compliant resource for Citronen: Source: Company announcement
Under the new MoU the framework is established to conduct the following activities:
NFC to engineer, design, procure, supply, construct, test and commission Citronen on a full turnkey basis;
NFC to facilitate financing from banks in China to cover about 70 per cent of the project costs;
NFC to have an option to purchase 19.9 per cent of Citronen at a project;
NFC to have a right enter into an offtake agreement for a portion of the concentrate products from Citronen; and
NFC to provide a performance bank guarantee in favour of Ironbark to be released subject to plant performance tests to the satisfaction of Ironbark.
Meetings were recently held in Beijing between NFC and the Greenland Minister for Mines and his department representatives, with a subsequent meeting held between NFC and Ironbark’s key infrastructure engineering firm, MT Hojgaard, to collaborate on the development of Citronen.