Strong points

• US EXIM issued a Preliminary Project Letter (PPL) to Ironbark offering up to US $ 657 million in debt financing to underpin the development of the Citronen project

• The main business details of the indicative Term Sheet include (all figures in USD dollars):
  – Loan amount – up to $ 657 million including $ 485 million in the United States Costs more $ 171 million in local costs; final amount subject to Ironbark meeting minimum equity commitments
  – Tenor – 8.5 years old; possibility of extension subject to additional 402 (A) flexibilities
  – Rate – 100 basis points above the five-year US Treasury rate (implied rate ~ 2.2% per annum)

• Trading conditions can be further improved following recent Ironbark 402 (A) designation, the first of its kind in the world, received as part of US EXIM China & Transformational Export Program

• The proposed level of support to US EXIM is sufficient to provide all the senior debt required for the project

PERTH, Australia, December 7, 2021 / PRNewswire / – Ironbark Zinc Limited (ASX: IBG) (Ironbark or the Company) advises that its Phase I due diligence (DD) period with US EXIM Bank has now been successfully completed and that Ironbark has received a letter from preliminary draft (PPL) outlining EXIM’s intention, subject to due diligence and approval by the EXIM board of directors, to extend to US $ 657 million in debt financing to Ironbark to found the development of the Citronen project.

Managing Director of Ironbark, Michel Jardine, commented :

“We are delighted to announce this US EXIM PPL, which marks a real turning point in the life of the Citroën project, with appropriate recognition of the scale and quality of assets in the capital markets for the first time without doubt. We couldn’t ask for a better prospective cornerstone than US EXIM; they will be a great partner for Ironbark and its stakeholders as we move forward into what will be another 12 busy months. Interest from a leading financial institution further validates Citronen’s status as a Tier 1 Zinc project and reflects the strong fundamentals offered by Citronen as the Company moves closer to becoming a strategic zinc producer.

The story continues

We have seen in the last six months since Ironbark updated its BFS a substantial change in perception of zinc and the role it will play in the future. Now officially a critical USGS mineral, the physical zinc market has also shown once underestimated tension and we’ve seen the price react in a reasonably sustained manner in recent months. All of these factors are green when you consider what a very long-lived asset like Citroën potentially offers to the market.

We look forward to updating the market on our progress throughout the first half of 2022 as we finalize our project finance package. “

Preliminary project letter

During Phase I of the recently completed SD process, EXIM Bank worked with Washington based at Greengate LLC, an independent financial advisory firm, to assess Ironbark’s application for the development of the Citronen Zinc project. EXIM Bank uses this initial DD process to screen and review opportunities, and successful passage of Phase I is a prerequisite for obtaining final approval from the EXIM Bank Board of Directors.

During the Phase 1 SD process, US EXIM and its advisors undertook significant SD on Citronen following Ironbark’s loan application, submitted in August 2021. While this is not yet a binding credit offer, the PPL signals US EXIM’s intention to undertake a more in-depth review of the funding request and provides project proponents with a process and guidance. list of issues to be resolved before a formal loan offer. This is a welcome endorsement of the fundamentals of the Citronen Zinc Project for a world expected to consume more zinc metal as the transition to carbon neutrality gains momentum globally. Considering the amount of debt financing potentially available by US EXIM, no additional project debt financing is expected if the EXIM facility is successfully closed on the terms outlined in the PPL.

In addition to signaling US EXIM’s intention to proceed with the transaction and filing an indicative term sheet, the PPL is providing advice to Ironbark on key issues for Phase 2 DD, including performing other reviews. financial, technical, environmental and legal as determined by EXIM Bank (including finalization of construction arrangements).

For the completed Phase 1 process and the upcoming Phase 2 work, Ironbark was advised by Bacchus Capital, Latham & Watkins LLP and US Specialized Advisors EXIM Horn & Watson and International Trade & Transportation Inc.

Next steps and schedule for EXIM

Phase 2 DD, which will begin in early 2022, will focus on resolving the issues raised by US EXIM in the PPL. Further information will be provided on the key milestones and timing of this process, including the means of securing the approval of the US EXIM Board of Directors and subsequent withdrawal, once confirmed between parts.

Impact of the PPL on the strategic equity process

Ironbark has launched a focused process led by its strategic financial advisors, London based at Bacchus Capital, to identify and consider potential investors. Initially, the net was cast globally and is expected to involve a range of interested parties from the fields of base metal mining, refining and trading and financial investment. The progress in securing the US EXIM funding described in this announcement provides the necessary path to overcome one of the main obstacles to the advancement of any new project development – access to project debt financing on terms and conditions. attractive, which should increase equity returns. The Citronen Zinc project, with its initial lifespan of 20 years, its potential to rank among the world’s top 10 zinc producers, and now an advanced route to securing project funding, is expected to attract wide interest from a range of participants seeking to participate in its development.

With the PPL now issued and offering visibility on the attractiveness of the proposed set of project debt, the formal equity investment process will now begin. It is expected to run largely in parallel with the Phase 2 due diligence program, and may not end until full project funding has been agreed among all debt investors. and in actions.

Stop trade

This announcement is not intended to lift the stoppage of trading. The Company will remain in suspension of trading until the start of normal trading on Thursday, December 9, 2021, pending the announcement of a capital increase.

More details

This opinion is authorized to be issued by the Council. Please contact Managing Director Mr. Michel Jardine for any other request for information on one or the other [email protected]or +61 424 615 047.

Media inquiries:
Angela East
[email protected]
+61 428 432 025

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SOURCE Ironbark Zinc