EXIM may consider financing up to $216.1m of the US content for the zinc/lead project in Greenland as per an LOI executed by the parties

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The Citronen project is estimated to require a capital cost of $514m. (Credit: aymane jdidi from Pixabay)

Ironbark Zinc has been issued a letter of interest (LOI) from the Export Import Bank of the United States (EXIM) regarding the project financing plan for its fully-owned Citronen Zinc-Lead Project in Greenland.

Located in northern Greenland, the Citronen project is estimated to require a capital cost of $514m as per Ironbark Zinc’s feasibility report released in 2017.

The Australian mineral resources company said that the LOI from the US government’s official export credit agency is not binding and also does not represent an official commitment towards the project.

However, Ironbark Zinc said that it is a major step in advancing a project financing plan for the development of the zinc/lead deposit.

Ironbark Zinc managing director Michael Jardine said: “The execution of this LOI is another significant, and potentially transformational, milestone in the Ironbark journey towards Citronen’s development and the long-promised move from developer to producer.

“Over the past six months, Ironbark has engaged with EXIM representatives to better understand each other’s business and to promote the alignment of our respective strategic goals, steadily building the foundations for a long-term relationship.”

Jardine added that after the feasibility study is completed early next year to a bankable standard, the company will look to convert the preliminary arrangements into binding financing agreements for the development of the project.

As per the LOI, EXIM could finance up to $216.1m of the US content for the zinc/lead project. It also considers making a maximum loan term of 8.5 years available to the Australian mineral resources company.

Ironbark Zinc could have the option of selecting a guaranteed or direct loan, as per the LOI.

Greenland Ministry of Mineral Resources Jørgen Hammeken-Holm said: “The Government of Greenland is of course delighted to see EXIM’s expression of interest in supporting Ironbark, which reinforces the company’s longstanding commitment to the Citronen Project, and Greenland more broadly.

“As one of the country’s flagship resource projects, Citronen represents a unique near-term opportunity to diversify Greenland’s economic base and attract significant inbound foreign investment.”

In September 2020, Ironbark Zinc declared an ore reserve of 21.3Mt @ 6.3% Zn equivalent containing 1.3Mt of Zn metal and 0.1mt of Pb metal at the underground deposit of the Citronen project.