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viewIronbark Zinc Ltd

Ironbark Zinc focused on world-class zinc and lead project in Greenland

Snapshot

Its Citronen project is in Greenland while its Captains Flat JV with Glencore is in NSW.

Citronen camp in Greenland

Quick facts: Ironbark Zinc Ltd

Price: 0.014 AUD

ASX:IBG
Market: ASX
Market Cap: $12.88 m
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  • The US$1.034 billion Citronen project has a mining licence and a 70 million tonnes resource
  • A NSW project with Glencore is housed at the old Lake George Mine

What does Ironbark Zinc do?

Ironbark Zinc Ltd (ASX:IBG) specialises in base metals projects in Greenland and Australia. It is run by Jonathan Downes, a geologist who has more than 20 years experience in the minerals industry. Downes is also a non-executive director of Corazon Mining Limited.

What does Ironbark Zinc own?

The flagship asset is the Citronen Zinc-Lead Project in Greenland in a district that Ironbark now controls.

A September 2017 feasibility study for Citronen modelled a 14-year mine at the project which has an approved mining licence.

Under the Western Australian company’s feasibility study, 180,000 tonnes a year of zinc and 25,000 tonnes a year of lead would be produced each year for the first five years of the mine.

Net present value (NPV) was put at US$1.034 billion (US$909 million after tax) and its internal rate of return (IRR) at 36% (35% after tax).

The study’s US$514 million capital cost estimate averages out to US66 cents for each pound of zinc produced from Citronen’s mining inventory.

Citronen’s inventory consists of 45 million tonnes grading 5.3% zinc and 0.5% lead is found in a 70 million tonnes mining resource grading 5.1% zinc and 0.5% lead.

A higher grade 29.9 million tonnes resource grades 7.1% zinc and lead.

Citronen’s exploration target is 302-347 million tonnes at 4.4-5.0% zinc and lead.

The treasured semiconductor germanium is also found at the site but is not included in the resource.

Subiaco-based Ironbark has previously expressed its hope of attracting equipment suppliers in a move that might reduce the US$514 million capital cost of building its big zinc mine by 30% or US$150 million.

Ironbark inked a mining services MOU with Byrnecut Offshore Pty Ltd in August 2018, providing Ironbark with underground expertise for its proposed shallow underground mine.

Citronen’s current licence area covers 120 square kilometres which contains the company’s existing mineral resource.

Two additional exploration licences cover another 124 square kilometres, with the company submitting applications in December 2018 for a further 400 square kilometres, taking in an interpreted source fault that follows the trend of the licence.

If converted into full licences, the area would total 644 square kilometres.

Ironbark has reported the project is open-ended at depth, laterally and also on strike to the northwest.

Last year the company proved shipping access to Citronen’s port was possible.

Ironbark also signed a memorandum of understanding (MOU) with Metso Oyj (HEL:METSO) (FRA:VLM) (OTCMKTS:MXCYY) to reach a commercial services-and-equipment agreement.

The MOU with Metso Sweden AB allowed Helsinki and Frankfurt-listed Metso to start on engineering tasks before processing equipment specifications were fully complete.

This memo is considered a negotiating platform for a commercial agreement for Citronen.

A secondary project for the company is the Captains Flat base metals project in New South Wales.

Located at the 1930s-era Lake George Mine, the project is run as a 50:50 joint venture between Ironbark and Glencore PLC (LON:GLEN) (JSE:GLN) (OTCMKTS:GLCNF) (OTCMKTS:GLNCY) subsidiary New South Wales Base Metals Pty Ltd.

Historical drilling has returned high-grade copper and zinc drill intercepts over many prospects at Captains Flat, with Jerangle, Vanderbilt Hill and Anembo prospects as well as the Lake George Mine flagged by Ironbark for investigation.

A HeliSAM electromagnetic (EM) survey over the large-scale Jerangle prospect was completed in February 2019, showing anomalies in several adjacent loops, indicating the presence of a large, broad bedrock anomaly.

The largest smelting house in the world, Switzerland-based Nyrstar NV (OTCMKTS:NYRSF), and Glencore have been feature shareholders on Ironbark’s registry, with Danny Segman-directed companies Toronga Pty Ltd and Dulyne Pty Ltd upping their stakes in recent times.

Ironbark shared its December 2018 half-year report with the market three weeks ago after ending 2018 with $2.1 million cash after raising $2 million with a placement in November 2018.

The company previously tipped cash outflows of $900,000 for the March quarter of 2019, with $700,000 budgeted for exploration and evaluation.

Ironbark is expected to file its next quarterly reports by the end of April 2019.

Inflection points

  • Major movements on the company’s share registry

  • Offtake, production take and financing milestones for Citronen project

  • Final investment decision progression for Citronen

  • Significant discoveries at Captains Flat

  • Large transactions with other companies such as partner Glencore

Managing director Jonathan Downes highlights base metals focus

“Ironbark is an emerging leader amongst Australia’s mineral resource companies dedicated to the development of its major base metal mining operation in Greenland, the world-class Citronen project, and the acquisition of quality base metal projects,” managing director Jonathan Downes said in February.

 

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Watch

Ironbark Zinc demonstrates 'proof of concept that derisks the project in a...

Jonathan Downes, managing director of Ironbark Zinc Ltd (ASX:IBG), speaks to Proactive Investors about development of the Citronen Zinc-Lead Project in northern Greenland, as the emerging producer announces hitting the milestone of demonstrating shipping access. A mining services...

on 3/9/18

5 min read