Ironbark Zinc Limited (ASX:IBG) has taken another step towards developing the Citronen Zinc Project in Greenland through an agreement with underground hard rock mechanised mining specialist Byrnecut Offshore Pty Ltd.
The two companies have signed an MOU for a mining services agreement covering Citronen.
This is intended to include underground contract mining services, underground mine cost modelling and providing the underground mining fleet.
It includes holding the debt and security of the equipment.
Ironbark Zinc managing director Jonathan Downes said: “We are extremely pleased to have attracted the interest of a group as well regarded and capable as Byrnecut.
“Byrnecut has the capacity to provide Ironbark with an immediate ‘bolt-on’ underground mining expertise that will assist Ironbark as we move from financing to active mining.
“While only at an early stage, we consider this is a very positive step towards the project’s development and financing.”
Ironbark has started work seeking to remove capital items from the capital cost of the Citronen project and has identified several further key opportunities to reduce costs.
This process will now see Ironbark and Byrnecut work towards a more detailed cost-based commercial agreement operating under agreed margins through each project stage.
It will also encompass agreed performance margins.
The company is in discussions with other groups for the remaining disciplines or to support the project that have potential to collectively and significantly assist with overall project financing.
Byrnecut will operate under the Greenland Government guidelines and will assist Ironbark achieve its training and employment obligations.
A Byrnecut technical representative will be visiting the site later this month.
Downes said: “Byrnecut is aware and supportive of the training and employment obligations that Ironbark is operating under in Greenland.”
Strong demand for zinc
The wholly-owned Citronen project is well placed to meet the strong and growing global demand for zinc and represents a large-scale, high-margin operation in a stable and safe jurisdiction.
Citronen, which is held under a granted 30-year mining licence, hosts in excess of 13.1 billion pounds of zinc and lead.
Byrnecut has global contracts
Byrnecut is a global underground mining contractor offering a full range of professional mining support services and a 30-year history of world-class mining experience.
It specialises in mechanised underground mine feasibility, mine development and mine production and has been successful in securing many Australian and international contracts.
Since starting international operations in 1999, it has grown into one of the most experienced underground mining contractors across the globe.
Byrnecut employs over 4,000 people worldwide with operations in Australia, the Democratic Republic of Congo, Mali, Burkina Faso, Saudi Arabia and Tanzania.