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Ironbark Zinc advancing Mining Licence to develop Citronen

Published: 23:12 30 Apr 2015 AEST

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Ironbark Zinc (ASX:IBG) shares have been a strong performer in April, rising from $0.082 to a peak of $0.13 as it continues to advance development of the Citronen Base Metals Project in Greenland.

The stock last traded at $0.12, which is 46% higher than the start of the month.

The company has been advised that all environmental issues have been treated satisfactorily in its Ironbark Environmental Impact Assessment while grant of a Mining Licence is progressing.

Citronen is one of the world’s largest zinc development projects at an advanced post-feasibility stage with a meaty resource of 70.8 million tonnes at 5.7% zinc + lead at a 3.5% zinc cut-off.

This includes a highly profitable higher grade resource zone of 29.9 million tonnes at 7.1% zinc + lead at a 5% zinc cut-off.

Several questions and suggestions were subsequently introduced into the Social Impact Assessment (SIA) document by the Greenland Government which have been addressed by Ironbark and is now awaiting formal approval or further comment.

In addition, the final Danish Maritime Assessment (DMA) was lodged and the Mine Closure Plan was completed and is now ready to be submitted.

Once formal approval of the SIA has been granted Ironbark will move to manage a public consultation process and to enter into an Impact Benefit Agreement (IBA).

The IBA is a document used to provide a formal framework for Ironbark’s obligations under the SIA such as training and employment commitments to the Greenlandic people.

The Ministry of Industry, Labour and Trade is also currently working on the IBA.


Mining Lease Application


Progress during the March 2015 quarter has been solid with the Citronen Exploitation Licence Application (Mining Licence Application).

The Greenland Government has recently undergone significant change with new Ministers appointed across a range of Ministries and responsibility for the permitting now spread across three of these ministries.

Meetings were held with Minister for Ministry of Mineral Resources Andreas Uldum in Canada when Ironbark presented on behalf of the Greenland Day promotion at the Prospectors and Developers Association of Canada (PDAC).

Meetings were also held in Greenland with Minister for the Ministry of Nature, Environment and Justice Mala Høy Kúko and Minister for the Ministry of Industry, Labour and Trade Vittus Qujaukitsoq.

These were positive and constructive with strong support across the three relevant Ministries for the Citronen development.

Greenland is seeking to develop a strong mineral and petroleum industry and has returned very high global rankings on the annual Fraser Institute survey.

Zinc and lead minerals have been approved for exploitation in the country, which has a history of zinc and lead mining and continues to seek to re-establish a mining industry

A Mining Licence application in Greenland is comprehensive and encompasses regulations which cover all aspects of the proposed mine, including environmental permitting and social commitments.

Following approval, the Mining Licence would provide Ironbark with the right to mine at Citronen for a period of 30 years.

The Mining Licence application, which has been prepared in significant consultation with the relevant Greenlandic and Danish authorities, comprises a Feasibility Study, Social Impact Assessment (SIA), Environmental Impact Assessment with base line surveys (EIA), and a Navigational Safety Investigation (NSI).

Ironbark is also working with China Nonferrous on construction and financing solutions for the development of Citronen.


Zinc Market

Zinc prices have started moving on the back of a solid drawdown in the London Metal Exchange zinc inventories.

Tightening supply is expected to drive the zinc price substantially higher in the coming years.

The circumstances causing the supply constraints are unique and positive for the zinc industry due to decades of under investment in the fourth most used metal.

This deficit scenario is widely expected to accelerate following the closure of the large Century (Australia) and Lisheen (Ireland) zinc mines later in 2015.


Analysis

Ironbark Zinc continues to progress the Mining Licence Application for its Citronen Base Metals Project with all environmental issues now treated satisfactorily in its EIA.

Formal approval or further comment is being awaited on the Social Impact Assessment, which will allow the company to enter into an Impact Benefit Agreement.

The company also continues to explore business development opportunities available through its US$50M Glencore merger and acquisition funding facility.

It has $2.6 million in cash with no debt as at 31st March 2015.



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