The material inventory recapped its highlights for the year, which included a strong bankable feasibility study (BFS), a key opportunity with an import-export bank (EXIM), and greater price leverage. zinc.

Ironbark Zinc Ltd (ASX: IBG) reviewed the year held at its last Annual General Meeting (AGM).

The material inventory recapped its highlights for the year, which included a strong bankable feasibility study (BFS), a key opportunity with an import-export bank (EXIM), and greater price leverage. zinc.

Currently, Ironbark has its eye on the Citronen zinc deposit in northern Greenland, where it hopes to someday erect a 3.3 million tonne per year mining operation.

At the end of the September quarter, the company had A $ 1.6 million in cash to advance development work on the Citronen asset.

Highlights of the investment of the year that was.

Bankable feasibility study

In July of this year, Ironbark released Citronen’s BFS, outlining a series of key metrics for the northern zinc deposit.

Modeling a 3.3 million tonne per year operation, the study describes how a zinc hub at Citronen could generate US $ 1.46 billion in after-tax free cash flow.

The project has an after-tax net present value of US $ 363 million, an internal rate of return of 15.2%, and requires US $ 654 million in capital expenditure.

Ironbark believes Citronen can produce 2.5 million tonnes of zinc over its 20-year lifespan, or an average of 130,000 tonnes per year.

It has already entered into two key off-take deals for the zinc deposit, both with major shareholders.

Trafigura Ltd is set to mine 35% of Citronen’s mining production life, while mining giant Glencore PLC (LSE: GLEN) is set to take 35% (including 10 years of lifetime zinc and lead production).

Glencore and Trafigura are the world’s largest and sixth largest zinc producers, respectively.

Main conclusions of the BFS.

At the time, IBG CEO Michael Jardine said: “The BFS 2021 update is the culmination of an intensive reassessment of the development plan for the Citronen project.

“It is a pragmatic and well-founded view of the asset that highlights the potential for development of Citronen into a major producer of zinc metal over several pricing cycles.

“This study addressed several challenges that required creative thinking, disciplined decision-making in terms of compromise, and a willingness to reconsider some long-held assumptions about the project.

“For these reasons, I am much more confident today than 12 months ago in the depth of our understanding and the solutions that are being offered.”

Michel Jardine.

“There are few known large deposits of near-surface SEDEX zinc ore yet to be developed, let alone located in low sovereign risk countries like Greenland.

“Once built, Citronen will be a decades-old mine backed by the strength of the company’s existing offtake agreements. “

Citroën’s resources and reserves

Ironbark has established an ore reserve of 48.8 million tonnes for Citronen, based on a Mineral Resource Estimate (MRE) of 84.7 million tonnes.

More specifically, the MRE would contain 4.7% zinc and 0.5% lead. All details are described below:

IBG has also identified an exploration target, in addition to known mineral resources, of 40 million tonnes to 90 million tonnes at 5.0% to 7.1% combined zinc and lead.

The exploration target is based on a review of the project drilling, rock chip samples and the limited geophysical data available.

A 3D geological model of the project was used to help identify potential areas.

Plan view of the Citronen deposit, showing the current contour of the zinc mineral resource, drill hole and rock chip sample locations, and exploration target areas.

EXIM banking opportunity

With the completion of the BFS, Ironbark is exploring financing options to get Citronen off the ground.

Recently, the company applied for a project finance loan with the US bank EXIM, the official export credit agency (ECA) of the US government.

Fast forward to today, and he’s waiting for a key letter from the bank – expected next month.

Essentially, the correspondence will tell Ironbark whether the institution wishes to make a funding offer and will set out some of the first terms and conditions.

The pre-project letter will also include an indicative terms sheet that spells out all the business factors and some tips for phase two of the process.

In August, Jardine commented: “This is a long-awaited and potentially transformative step in the life of Ironbark and the Citronen project, given that these are arguably the most advanced fundraising discussions. that the company has undertaken to date.

“EXIM is uniquely positioned to be the cornerstone of Citroën’s development for a variety of reasons – economic, commercial and political – and I am extremely excited for the months to come.

“It is clear that future prosperity will require new zinc mines and Citronen is one of the few large projects ready to go today, with even fewer projects located in jurisdictions capable of meeting the highest standards of investors. current ESG-focused. “

Zinc Market Outlook

Ironbark continues to advance the Citronen property as the zinc market gains traction.

Fastmarkets analyst James Moore and reporter Ana de Liz said in October that the outlook for zinc demand appeared optimistic.

“As central banks around the world are scaling back their pandemic stimulus packages, we expect policy to remain generally accommodative.

“Large budget spending on infrastructure will spill over into the zinc market. And while the demand for zinc often correlates with traditional infrastructure expansions in the road and rail sectors, zinc will also play a strategic role in new energy infrastructure.

“We also expect some pent-up demand from the auto industry next year, after the semiconductor shortage has forced automakers to postpone and delay production this year.

“The persistent forward selling above $ 3,000 a tonne has acted as a barrier to price increases, but we believe prices will gradually strengthen, particularly if investors start to anticipate late mine closures. life expectancies scheduled for 2022-2023, which will tighten the refined metal availability in the years to come.


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