Ironbark Zinc Limited (ASX:IBG) has capital raising news pending and has been granted a trading halt by the ASX.
The halt will remain in place until the start of normal trading on Wednesday, November 21, or when an announcement is released to the market, whichever occurs earliest.
Ironbark Zinc’s shares closed at 3.5 cents last Friday.
The company recently signed an MOU with Metso Oyj (HEL:METSO) (FRA:VLM) (OTCMKTS:MXCYY) to reach a commercial services and equipment agreement for its flagship Citronen Zinc-Lead Project in Greenland.
Platform for commercial agreement
This MOU with Metso Sweden AB provides the parties with a negotiating platform for a commercial agreement for the project.
It also allows Metso to start on engineering tasks before processing equipment specifications are fully complete.
Ironbark stated: “The completion of the design works, and manufacture of the key process equipment is contingent upon the parties entering into a commercially binding agreement to design, manufacture and supply the Citronen processing plant.”
A commercial agreement would take in:
Positive feasibility study
Ironbark’s September 2017 feasibility study for Citronen targeted a 14-year mine life where 180,000 tonnes of zinc and 25,000 tonnes of lead would be produced each year for the first five years.
The study outlined a net present value (NPV) of US$1.034 billion (US$909 million post-tax) and an internal rate of return (IRR) of 36% (35% post-tax).
Citronen’s mining inventory consists of 45 million tonnes at 5.3% zinc and 0.5% lead found in a 70 million tonne resource grading 5.1% zinc and 0.5% lead.
Ironbark has previously expressed its hope of attracting equipment suppliers to reduce the US$514 million capital cost of building its mine by 30% or US$150 million.