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Ironbark Zinc executes buyback of life-of-mine production royalty at Citronen Project in northern Greenland

Published: 10:51 02 Feb 2021 AEDT

Ironbark Zinc Ltd -
Ironbark believes the royalty buyback is likely to have a positive impact on the project economics

Ironbark Zinc Ltd (ASX:IBG) has executed the buyback of the Citronen Project’s life of mine production royalty, which is now extinguished in full.  

The project’s life of mine and 2.5% net smelter return (NSR) royalty is now extinguished in full to Pearyland Royalties Co.

Ironbark has agreed to pay Pearyland Royalties Co Ltd the following consideration in exchange for the extinguishment of the royalty:

  • $316,000 in cash ($50,000 of which will be paid as a non-refundable deposit); and
  • 122 million shares from its existing 7.1 placement capacity.

“Transformational step forward”

Managing director Michael Jardine said: “This represents another transformational step forward in converting Citronen from opportunity to reality, and an extremely positive outcome for all IBG shareholders.

“With the royalty cashflows now available to support project development, the updated 2021 BFS will for the first time, reflect the genuine underlying value of this highly strategic asset.

“This is a very constructive development during a time of generally rising commodity prices.

“The potential for Citronen to become the next major greenfield zinc mine development is clearly demonstrated by the high quality of Ironbark’s shareholder base, the recent support of UK-based Bacchus Capital, and the encouraging dialogue established with the US Government-backed EXIM Bank, culminating in the recently announced EXIM financing MOU.

“The board, in place since late 2019, is very focused on rewarding shareholders for their long-term commitment to this highly strategic asset and I look forward to further updating the market with positive progress over 2021.”

Commercial terms

A due diligence period of 14 days from the signing of the terms sheet has been agreed, with a final settlement date of no later than 30 days after signing.

In the event the royalty buyback is successfully completed, the numbers of shares on issue in IBG will increase from 940,552,114 to 1,062,552,114, with the shares being issued for the royalty buyback comprising 11.5% of the issued capital in IBG.

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