Ironbark Zinc Ltd (ASX:IBG) has concluded a highly positive site visit to the Citronen project with the Greenland Government Minister for Mines, Múte Bourup Egede and the Deputy Minister, Jørgen T. Hammeken-Holm.
The 100%-owned Citronen Zinc Project located in Greenland is at an advanced post-feasibility stage and valued at US$609mln.
Also visiting was the Vice President of China Nonferrous Metal Industry’s Foreign Engineering and Construction Co., Ltd (NFC), Mr. Qin Junman.
NFC has a Memorandum of Understanding with Ironbark for the potential funding and construction of the Citronen Project, and Mr. Junman led a team of engineers and experts from NFC and the Nerin Group in the site visit as part of NFC’s ongoing project assessment.
NFC is one of the world’s largest construction engineering groups and has the relevant experience and the capability to provide the key equipment for the Citronen project.
The site inspection was successful in introducing the Greenland Government Mines Minister and Deputy Minister to the Vice President of NFC and his selected team.
Background to NFC Agreement
Ironbark is working with NFC under an agreement to:
- Incorporate current Chinese equipment and construction costs into the Citronen Feasibility Study;
- Prepare a Project study report in compliance with the financing requirement of China's banks;
- Ensure the technical criteria is in compliance with local laws, regulations, standards and codes in Greenland and China; and
- Assist Ironbark in securing Chinese Project debt financing for the development of Citronen under the terms of the earlier Memorandum of Understanding.
Ironbark Zinc Ltd is awaiting the updated Feasibility Study as prepared by CPC which will be released in the near future and also the Feasibility Update being prepared by NFC sometime later.
Ironbark will also update the market in due course the progress of its agreement with NFC in relation to the funding and construction of the project.
Zinc price on the move
The price of zinc has just risen to the highest prices in almost 10 years of over US$2,965 per tonne and at the same time stockpiles are showing a trend of growing metal depletion with the level at new multi-year lows on an almost daily basis.
Zinc is the fourth most mined metal by volume, and is mostly used for galvanising steel.
It has been widely forecast that zinc prices may continue to trend upwards in the near future, driven by increasing tightness in the concentrate market, following the recent closure of several major mines and healthy and growing zinc demand.
This has been observed already with increasing Chinese refined metal imports.
Falling zinc warehouse stock levels are driving a strong zinc price which is providing Ironbark with exceptional leverage to a rallying zinc price.
Adding an additional interesting value twist to the stock, Ironbark has an undrawn US$50mln funding facility provided by Glencore to expand its project base through acquisition.