Downe told Proactive Investors that Ironbark and China Nonferrous were eyeing production at Citronen in 2014.

“The date that we’re running with with China Nonferrous is that construction is to commence late 2012, so late this year following the Feasibility Study results, and then hopefully we’re in production in 2014.”

Managing director Jonathan Downes told Proactive Investors today it was a successful field season last year that resulted in a resource upgrade on two levels.

“It’s been a very successful result on two levels, to summarise – a higher feed grade to the mine, but it also allows us to evaluate a much larger tonnage for mining purposes and reserve conversion,” he said.

The resource remains open in almost every direction and, importantly, highlights that exploration at Citronen has resulted in resource expansion every year.

The global resource at Citronen now stands at 13.1 billion pounds of zinc and lead, using a 2% zinc cut-off, compared to the previously reported estimate of 132.6 million tonnes at 4% zinc and lead for 11 billion pounds.

Due to the predominantly infill nature of drilling in 2011, there is no material change in the global tonnage of material at the 2% cut-off grade, but greater continuity of higher grade material has resulted in an increase in resource category and honouring of higher grade material.

Ironbark has defined a target resource of 165-190 million tonnes at 5.7-6.5% zinc and lead, which the company said may be updated following the recent resource upgrade.

Mining studies have identified several areas which warranted further drilling in order to increase resource level confidence and allow reporting of optimisation work as part of the Citronen Feasibility Study.

Drilling at Citronen in 2011 was focused on infill resource definition at the Esrum Zone and Beach South.

Drilling was successful at defining continuous zones of higher grade material at the Esrum Zone within areas previously classified as Inferred resources.

This has resulted in the resources targeted for mine optimisation to be revised upwards in confidence level and also an increase in contained metal due to increased zinc and lead grades.

The new resource estimate contains 73 million tonnes at 5.7% zinc and lead above a 3.5% zinc cut-off for 9.2 billion pounds of contained metal. 

The previously published 2010 mining study resource quoted 59.9 million tonnes at 5.9% zinc and lead.

This was produced using Inverse Distance Squared interpolation globally and conditional simulation methodology for areas within the Beach zone and was reported above a 3.5% zinc cut-off. This contained 7.7 billion pounds of contained zinc and lead metal.


Citronen Feasibility Study

Ironbark is making solid progress towards finalising the Feasibility Study for the Citronen project. Early figures released in October last year indicate capital expenditure and operating expenditure could be lower than other major global mines.

Downes said the upgrade in Measured and Indicated resources will feed directly into the ongoing Feasibility Study, which is nearing completion.

“We’ve actually done the vast majority of it, but with the help of China Nonferrous who are working on the optimisation of the capital and the construction of the mine, and potentially financing, we’re also now providing updated mining schedules in the new resource,” he said.

The study is based on a 3 million tonne per annum mining operation to produce between 175,000 and 275,000 tonnes per annum of 55% zinc concentrate and 10,000-26,000 tonnes per annum of 50% lead concentrate over a mine life of at least 13 years, not including Inferred mineralisation which could see a mine life of 16 years, with substantial potential for a much longer mine life.

The current estimated costs are interim and do not include any Inferred resources, which require further drilling to reclassify to Indicated or Measured categories.

Enticingly, the resource remains open in almost every direction which may support future mine expansion.

The next step for Ironbark is to complete the Feasibility Study and begin construction, which Downes anticipates will be towards the end of the year subject to the outcome of the Feasibility Study results.


Company Growth

Ironbark has received shareholder approval to proceed with a US$50 million convertible note funding facility with Glencore International to pursue acquisition opportunities.

The facility has been struck by Ironbark managing director Jonathon Downes at a level that provides for conversions to shares at a significant premium to Ironbark’s last traded share price.

The funding facility could see Ironbark expand to become a significant base metals house with this further backing from Glencore.

Managing director Jonathan Downes told Proactive Investors today there is about 22 recorded veins with high grade mineralisation at the surface and only one has been mined and one other has been extensively drilled.

"The one that has been extensively drilled, we threw a few holes into and we got some good high grade intersections in that, and likewise we did some deep drilling underneath the mine vein and found that continued," he said.

Ironbark targeted deeper extensions and along strike to the south approximately 350 metres below surface (130-150 level) and has intercepted a blind continuation of the north-trending mineralised structure as exploited in the Blyklippen mine.

The company drilled three diamond holes and all intersected the mineralised structure. Further drilling is warranted at Blyklippen to define the extent of the high grade.

Ironbark also conducted a three hole diamond drilling program at the Sortebjerg prospect. The drilling targeted extensions of observed base metal mineralisation hosted in steeply dipping, north-trending fault zones.

Drilling was successful and all three drill holes intersected zinc, lead and silver mineralisation

The Blyklippen mine is part of the Mestersvig Project in Greenland where Ironbark is also conducting regional exploration, which has delivered highlight intersections of 2.5 metres at 8.9% zinc and lead, and 2g/t silver, as well as 1 metre at 17.3% zinc and lead, and 4g/t silver.

Ironbark is encouraged by the results and is planning further exploration work for 2012.

Downes said the recent drilling results support the case for exploration activity in the other 20 veins.

"It is typically very high grade and quite continuous mineralisation so this drill season has enhanced the value of the property a great deal," he said.

Ironbark is currently concluding a Feasibility Study for the Citronen project, a globally significant base metal project in Greenland.

The facility has been struck by Ironbark managing director Jonathon Downes at a level that provides for conversions to shares at a significant premium to Ironbark’s last traded share price of A$0.30.

The funding facility could see Ironbark expand to become a significant base metals house with this further backing from Glencore.

Following shareholder approval, Ironbark plans to use the funds to acquire assets, at either a project level or a company level, which are identified and agreed upon between Ironbark and Glencore, and for working capital.

Opportunities for acquisition may include assets or companies that have base metal assets in jurisdictions where Ironbark does not currently operate, which would provide Ironbark with diversification by operation, commodity and geography.

The company believes this type of diversification has the potential to deliver significant net benefits to Ironbark.

The timing of the facility is particularly favourable for the company, with global financial uncertainty resulting in growing opportunities for well-funded companies to expand through inorganic growth.
 
The majority of the Ironbark board believes that the ability to offer significant cash consideration to secure base metal project(s) is highly valuable in the present market.

The benefits of increased scale and project diversification as a result of successful acquisitions funded by the facility could also result in Ironbark’s cost of capital for future funding being improved.

The facility will be provided in two tranches of convertible notes with minimum drawdown amounts of $5 million.

Tranche 1 comprises $30 million which may be converted into Ironbark shares at the election of either Glencore or Ironbark at A$0.42 per share, and tranche 2 comprises US$20 million which may be converted into Ironbark shares at the election of Glencore at A$0.50 per share.

Ironbark and Glencore will also enter into an offtake agreement for 35% of the production of concentrates from Ironbark’s Citronen Project in Greenland. If any amount is drawn down pursuant to the facility then the offtake agreement will increase to 55%.

The deal will also allow Ironbark to further strengthen its board, with Glencore having the right to request the addition of three of its representatives to the board if any convertible notes are issued.

Hartleys is Ironbark’s corporate advisor for the facility.

Key points

The majority of the feasibility study has been completed and Ironbark retains a healthy cash balance of about $10 million at September 2011.

The large tonnage resource base of 60 Mt at 6% zinc + lead (Zn+Pb) with a potential mineable mineral inventory of 50 million tonnes with the majority in the Measured and Indicated category. The resource remains open to further mineralisation in almost every direction.

The first five years average diluted ore grade at a mining rate of 3 Mtpa delivered to the process plant will be approximately:

- Underground 7.5 Mt at between 6.1% and 6.8% Zn+Pb upgrading to mill feed grading to between 10% and
11.9% Zn+Pb.
- Open pit 7.5 Mt at approximately 3.7% Zn+Pb upgrading to mill feed of approximately 5.3% Zn+Pb at low strip ratios, although this will be moved the end of the mine life to give preference to underground tonnes due to a focus on targeting early high grade.

Citronen has excellent potential for the mine life to be increased beyond the current 13 years as defined within the Measured and Indicated resources.

The mineralisation remains open in most directions and is constrained only by drilling with reserve classification limited to the Measured and Indicated resources categories only.

The current Inferred resources will need to be infill drilled to a higher confidence level to be included in a mine plan but could take the mine life to 18.7 years.

A target resource of 165 M to 190 M tonnes at 5.7% to 6.5 % zinc + lead highlights the significant upside potential of this world class asset.

Life of Mine Revenue at US$ 1/lb Zn and US$ 0.90/lb Pb could exceed US$3.2 Billion.

Industry standard flowsheet that results in a saleable concentrate with feasibility process design recovering 85% of the zinc mined and approximately 60% of the lead mined overall with further testwork ongoing.

Opportunities for capital cost reduction have been identified and the following initiatives are underway including:

- China Nonferrous Metal Industry’s Foreign Engineering and Construction Co,Ltd. (NFC) and Arccon (WA) Pty Ltd signed a Memorandum of Understanding (MOU) with Ironbark to engineer, design, procure, supply, construct, test and commission the Citronen project.

- The MOU also envisages potential funding of the project development costs by major Chinese banks and entering into concentrate offtake sale agreements.

Metso Corporation, one of the world’s largest equipment suppliers to the mining industry have identified significant savings to the process plant capital cost which will be investigated in the coming months.

Ironbark has very strong and supportive shareholders in Nyrstar NV (the world’s largest zinc metal producer) and Glencore International AG (LON:GLEN), the world’s largest zinc trader.

The target Life of Mine average operating cost for Citronen is calculated to be US $57.87/t net of by product credits.

Greenland provides a supportive and pro-mining environment that operates under European law. The corporate tax rate is 30% (37% for repatriated funds) and there are no Government royalties.

In addition development expenditure and plant and equipment are deductable through depreciation at a rate of 30% on a declining balance basis.

Citronen has a clean and saleable concentrate product. The forecast zinc concentrate grade is 55% zinc with no forecast penalty limit breaches.

An Environmental Impact Assessment has been completed and lodged with the Bureau of Minerals and Petroleum, awaiting public comment.

The first draft of the Social Impact Assessment has been submitted to the Bureau of Minerals and Petroleum Greenland (BMP) for comment, with revision currently being addressed by Ironbark.

The preparation of the Feasibility Study is being coordinated by Wardrop Engineering Inc., in conjunction with Wardrop Engineering Inc./Tetra Tech, Metso Corp., MTHøjgaard Grønland ApS. (MTH) and with input from Ironbark and the in-house team of engineering, geological and environmental staff.

The drill core has been transported to Cobar for analysis.

The project is located south of Canberra in New South Wales.  The foot print of the project is vast covering a strike length of 39 kilometres of a highly endowed Volcanic Massive Sulphide (VMS) horizon that hosts numerous historic mineral occurrences and mines.

Ironbark and NSWBM have become entitled to a 51% JV interest on an equal basis and are currently jointly funding $600,000 in further exploration to earn an additional 24% JV Interest.

The project area includes the Lake George Mine that produced 4 million tonnes of high-grade ore until closure in 1962 and was at one time Australia’s second largest producer of copper.

Within the project area prospects include the Jerangle, Lake George and Vanderbilt Hill prospects where previous explorers have returned high grade copper and zinc drill intercepts.

The Jerangle Prospect is located at the southern end of the project area and drilling over a strike length of 1.5 kilometres has returned drill intercepts assaying up to 5.25% copper. High density soil sampling has delineated high priority exploration targets for immediate follow up.

The high-grade Lake George Mine remains prospective for remnant ore at current base metal prices as well as at depth where results such as 1.22 metres at 12.4% zinc, 5.4% lead were returned beneath historical workings over a strike length of at least 300 metres from diamond drilling.

Mineralisation is open at depth and may represent possible repeats of the historically mined areas.

Ironbark previously drilled 154 air core drill holes for 2,533 metres of drilling on the Lake George Mine tailings. The program tested the mineral content of the historic tailings dumps.

The Vanderbilt Hill prospect is located to the east of the Lake George Mine and drilling has returned results such as 3.9 metres at 10% zinc, 5.3% lead.

The prospect is considered to be highly prospective with open ended historic high grade drill results yet to be followed up.

Ironbark is currently focused on the development of the Citronen base metal mining operation in Greenland which currently hosts in excess of 11 Billion pounds of zinc (Zn) and lead (Pb).

Which is deftly timed as Ironbark is currently finalising a Feasibility Study on the Citronen project.

The agreement will seek to define a framework for; NFC to engineer, design, procure, supply, construct, test and commission the project on a full turnkey basis; and also to facilitate funding of the project development costs from major banks in China.

It will also look at an offtake agreement with NFC for the concentrate products of the project.

NFC has a market capitalisation of $3.4 billion and listed on the Shenzen Stock Exchange.

Jonathan Downes, managing director of Ironbark, along with chairman Peter Bennetto - signed the agreement with senior representatives of the NFC in Beijing.

Bennetto commented, “Ironbark is delighted to enter into a mutually rewarding relationship with NFC for the development of the Citronen base metal project.

"NFC’s credentials are beyond reproach in the engineering, construction and delivery of major international projects."

Qin Junman, Vice-president of the NFC added, “NFC is looking forward to fostering a close and productive relationship based on cooperation with Ironbark as we jointly work on the development of a major new zinc and lead mining operation.

"We are pleased to have signed the MOU and believe that a close relationship will result in an exciting outcome.”

Under the signed agreement the company will work with NFC and Arccon (the subsidiary of Allmine Group) to establish the development program and associated costs for the delivery of the project.

Citronen is being evaluated to mine at a rate of 3 million tonnes per annum and produce zinc and lead concentrates for delivery around the world.

The project currently hosts in excess of 11 billion pounds of zinc and lead, with the full JORC Resource 59.9 million tonnes at 5.9% zinc plus lead.

The increase was due to L1 purchasing 365,000 shares for a consideration of around $92,400, for an average entry price of just over $0.25 - which is around Ironbark's last traded price.

The increased interest from L1 is no doubt due to Ironbark returning some very promising results recently at the wholly owned Mestersvig project in Greenland, including visible base metal mineralisation over multiple metre true widths.

Highlighting the prospectivity at Mestersvig is historical mining and production, which included 544,600 tonnes at 9.9% zinc and 9.3% lead in the six years to 1962.

New drill samples from late July were being air-freighted from Greenland for assay by ALS Chemex in Europe, with results currently pending.

Ironbark drilling activity for 2011 is now focused on the Citronen base metal project.

Exploration at Citronen is ongoing and primarily aimed at resource definition and infill drilling at the Esrum zone, in conjunction with extensional drilling around areas of higher-grade mineralisation at the Beach zone.

Citronen currently has a Inferred JORC Resource of 59.9 million tonnes at 5.9% zinc plus lead, with the latest exploration targeting the conversion to the higher confidence categories of Measured and Indicated.

At the Washington Land project, Ironbark will target follow-up exploration at the Cass prospect from work conducted by Rio Tinto (ASX: RIO) in the late 1990's, with the big miner withdrawing due to the low zinc and lead prices.

Mineralisation at Cass occurs over a four kilometre strike, where continuous rock chip composite samples returned; 25 metres at 8.9% zinc, 11.1% lead and 95g/t silver.

Highlighting the prospectivity at Mestersvig is historical mining and production, which included 544,600 tonnes at 9.9% zinc and 9.3% lead in the six years to 1962.

New drill samples from Mestersvig are being air-freighted from Greenland this week and will be shipped for assay by ALS Chemex in Europe.

Ironbark said drilling activity for 2011 has now mobilised from the Mestersvig site to the Citronen base metal project.

Exploration at Citronen is ongoing and primarily aimed at resource definition and infill drilling at the Esrum zone, in conjunction with extensional drilling around areas of higher-grade mineralisation at the Beach zone.

Citronen currently has a Inferred JORC Resource of 59.9 million tonnes at 5.9% zinc plus lead, with the latest exploration targeting the conversion to the higher confidence categories of Measured and Indicated.

At the Washington Land project, Ironbark will target follow-up exploration at the Cass prospect from work conducted by Rio Tinto (ASX: RIO) in the late 1990's, with the big miner withdrawing due to the low zinc and lead prices.

Mineralisation at Cass occurs over a four kilometre strike, where continuous rock chip composite samples returned; 25 metres at 8.9% zinc, 11.1% lead and 95g/t silver.

A second continuous rock chip composite sample taken 550 metres along strike to the east returned; 25 metres at 3.7% zinc, 7% lead and 40g/t silver.

A single diamond drill hole yielded 1.2 metres at 8.4% zinc, 0.04% lead and 94g/t silver.

L1 Capital’s stake has increased to 11.99% or 44,158,871 shares, up from previous 10.88% or 40,064,982 shares.

Ironbark's Citronen deposit in Greenland currently hosts in excess of 11 Billion pounds of zinc (Zn) and lead (Pb). The current JORC compliant resource for Citronen is 59.9 million tonnes at 5.9% zinc (Zn) + lead (Pb).

At March quarter end, Ironbark was in a strong financial position with $17.6 million cash and no debt.

Ironbark is progressing the Feasibility Study of the Citronen base metal project as a major base metal mine.

The potential new tenement covers 461 square kilometres which includes the Sortebjerg 'Black Mountain' base metals prospect.

Ironbark recently received data from 16 diamond drill holes drilled under the outcropping mineralisation at Black Mountain in 1952, which the company said confirms the continuation of mineralisation at depth.

The major benefit for Ironbark if the new tenement is granted by the Greenland Bureau of Minerals and Petroleum, is that the adjacent Mestersvig Licence containing the Blyklippen lead zinc mine proving mineralisation in the area.

The Blyklippen mine was operated from 1956 to 1962 and yielded production of 544,600 tonnes for a recovered grade of 9.9% zinc and 9.3% lead.

Ironbark currently considers the Blyklippen life of mine at 6 years at above 12% lead.

Importantly, the mining town and wharf are still located at Nyhavn, just 8 kilometres north east of Blyklippen.

From 30 July 2010 until 30 November 2010, L1 acquired 18,679,529 shares, or 5.07% of Ironbark Zinc at an average price of $0.25 per share.

Ironbark Zinc has recently applied under Section 702 of the Mining Act of Greenland for permission to conduct site works at its 100% owned Citronen Fjord Zinc-Lead Project.

The application is important for the rapid development of Citronen, the largest undeveloped zinc deposit, as Ironbark looks to fast track the project into production with the commencement of mining targeted in 2013.

Ironbark said in a statement today, final development decision for Citronen will remain subject to numerous risks including stable capital markets, favourable metal prices, a positive feasibility study outcome, access to funding, and the necessary approvals from the Bureau of Minerals and Petroleum – Greenland.

Citronen currently hosts in excess of 10 billion pounds of zinc and lead, with the current JORC compliant resource; 55.8 million tonnes at 6.1% zinc plus lead.

An updated JORC is expected by the company in the short term.

The new funds will be used to continue development work on the company’s flagship Citronen Lead Zinc project in Greenland, and for working capital.

Last month Ironbark announced a stunning high grade intercept of; 16 metres at 20.8% zinc, in follow-up drilling at Citronen, with a revised resource incorporating the plus 20,000m of diamond core drilling completed since November 2008, expected in the December quarter of 2010.

Total diamond core drilling on the site up to October 2010 is over 62,000m.

RBS Morgans acted as Lead Manager to the capital raising.

The wholly owned Citronen base metal deposit in Northern Greenland currently hosts in excess of 10 billion pounds of zinc and lead. The current JORC compliant resource for Citronen is: 55.8 million tonnes at 6.1% zinc (Zn) + lead (Pb).

The presence on the Ironbark share register of Nystar, the world’s largest zinc refiner with a 31% stake is telling - and takes away significant financing and off take risk - increasing the probability that Citronen will be brought into production.

Recent drilling has intersected high grade zinc, the highest grades to date at Citronen. Drilling has attempted to potentially link the major mineralisation at Discovery and Beach Zones. At this stage, Citronen shows no limitation in scale.

The resource estimate for Citronen is expected to be upgraded, based on 2010 drilling to date and delivered late in 2010.

The Definitive Feasibility Study (DFS) is due for release in December 2010 and is on track and on budget.

Recent Highlights:

- Hole  CF10_249 intersected 16 metres @ 20.8% zinc within a broader intercept of 29.4 metres @ 13.4% zinc from 69.5 metres down hole
- The preliminary open pit mineable inventory has been revised upwards and may now represent 10 million tonnes of mineralised feed
- The ore to waste ratio in the first year is estimated at a very low at 1:1.1
- The cost for the open pit mining is estimated at US$ 2.70/tonne moved
- Metallurgical zinc recoveries of 90% have been achieved using conventional grinding and flotation circuits.  Metallurgical test work is continuing at AMMTEC’s Perth and Tasmanian laboratories.
- A capital raising of A$15,000,000 was completed to Nyrstar International BV, the world’s largest zinc producer at 35 cents per share. Nyrstar now owns 44.8 million shares of Ironbark, or 30.5% of issued capital
- Hole 249 returned the highest grade and highest contained zinc intercept of any drill hole of over 62,000m drilled to date at Citronen and are outside quoted resource areas

Background:

Ironbark has projects in northern and eastern Greenland, targeting base metal deposits (Citronen and Mesters Vig) as well as exploration prospects in Washington Land and Navarana Fjord.

The resource at Citronen is contained within near surface and underground prospects known as Esrum, Beach Zone and Discovery Zone that are laid out over a 12 square kilometre strike line contained within mineral lease 2007/02.

The mineralisation is considered to be of a SEDEX style zinc deposit and this model is potentially very large. The mineralisation starts from surface, is shallow, flat lying and adjacent to a deep water fjord that may provide near mine ship docking and loading opportunities.

At this stage Citronen shows no sign of limitation in its scale.

Citronen is ideally situated for mining, located next to deep water, suitable for quick shipping of equipment and supplies and loading ore concentrates for refining elsewhere. The nearby deepwater fiord offers shipping potential during summer months.

Ironbark continues to drill at its Citronen Zinc-Lead property in Northern Greenland, after raising A$15 million from Belgium-based Nyrstar (Brussels: NYR). Nyrstar is the world’s largest zinc refiner and now owns 31% of Ironbark. Funds will be used to complete 2010 drilling program, an important part of its bankable feasibility study

As part of the acquisition, Nyrstar acquired a life of mine off-take agreement in relation to 35% of the production of the Citronen Zinc-Lead deposit once commercial production commences. 

In 2007, Nystar combined zinc smelting and alloying operations of Australian based Zinifex and Belgian based Unicore. In 2009 Nyrstar changed its business plan and started buying mines so that they could capture more of the profit stream from the production of metals.

Ironbark’s Citronen project is a major strategic fit, as Nystar is bullish on zinc and the project will be capable of supplying very substantial quantities of zinc and lead in the medium and long term.

The indicated and inferred resource at Citronen is 101.7 million tonnes at 4.1% zinc and 0.6% lead, at a cut-off grade of 2% zinc.

Major international resource investor, Glencore International AG, continues to hold 42.1 million shares, or 13.8% of Ironbark issued capital. The holdings of Glencore and Nystar attest to the quality and regard these major scale companies have for the Citronen project and Ironbark team.

Current Status:

Ironbark management have indicated that the current resource base, while still growing, is of sufficient size to support a long life mining scenario. The field work supporting a DFS at Citronen is expected to conclude towards the end of 2010.

Engineering, environmental, metallurgical work and the largest field season ever conducted at Citronen, is currently underway to meet this goal.

The current drilling program encompasses conceptual targets around the defined resources and drill holes at Esram Extended, Esram South, Beach, Trilobite Valley, Discovery, Discovery North, Western Gossan and East Zone.

It is conceivable that the target mineral inventory will be significantly larger than previously interpreted as geologists have identified the Esrum central feeder zone located on the far Western margin.

According to Ironbark, total size of the resource may ultimately increase to a massive 400 million tonnes. Ironbark has been reporting high grade drilling results since the current program got underway and is assumed that that the tonnage calculations will get a very significant lift after drilling ceases at the end of September.

Ironbark has stated that it will take several seasons to fully define the mineral inventory. This does not take into account the exploration potential contained in additional leases around lease 2007/02 covering 2,600 km². 

There is an Exploration Target of 302Mt to 347Mt @ 4.4 to 5.0% zinc + lead for a combined total of up to 36 billion pounds of zinc and lead metal (at a 2% zinc cutoff).  This would represent an increase of 240% over the current resource base and would rank Citronen in the “Super Giant” category as proposed by industry experts Goodfellow and Lydon,

The current development program is funded by Nyrstar when it took up a 19.9% stake in Ironbark last year.

Ironbark remains committed to moving toward commercial production within the next 3 to 5 years. Ironbark is in a strong working capital position with A$16 million of cash in the bank at quarter end. This is a cushion against short term weakness in zinc prices.

The massive size of the Citronen Deposit clearly indicates it will have a production profile in the low millions of tonnes per year.

With no further fundraising anticipated until major project financing, this ensures the tightness in issued capital and strong leverage to major news flow.

Zinc Market:

Most recent zinc price was US$2,248, having earlier hit its highest price since early May at US$2,284.75.

A number of large zinc mines are likely to close over the next five years, including Brunswick, Lisheen, Century and Skorpion, and there were few large projects under development, which indicated that prices were likely to rise as supply tightened, making the development timetable for new mines "opportune".
In addition, with forecasts of a looming zinc shortage, it is expected this will create an excellent environment to support the development of zinc mines in the near future (Credit Suisse report).

The coincidental closure of major zinc mines through depletion in the near future coupled with very limited new mine developments is expected to set the scene for a robust zinc price.

Credit Suisse also maintains a very bullish view of long term zinc prices. They see an exponential increase in the production of galvanised steel capacity as demand moves from infrastructure development to consumer led demand in developing nations.

Developed nations provide 70% of demand for zinc but developing countries including China are expected to substantially increase spending on consumer products which will double their share of the galvanized steel market. This demand will shift steel production from heavy steel parts to high quality flat steel that requires greater quantities of zinc to manufacture products such as cars, white goods and residential buildings that consume lots of galvanised steel. Credit Suisse pegs this demand at an additional 6 million tonnes of zinc by 2016, which dovetails neatly with Ironbark’s timeline to production at Citronen.

An aggressive drilling and resource development program is underway at Citronen utilising four drill rigs at a rate of A$5-6 million per quarter, which will lead to a Bankable Feasibility Study prior to the end of the current financial year.

Risks:

- Environmental. The key risk to the schedule is the time for the environmental leaching tests to be completed, potentially a pre-condition for submitting the Environmental Impact Assessment
- Cash costs rising
- Zinc price falls
- Execution delays

If its cost structure is at the lower end of the recent current scale (US$1,500 - $1,800 per tonne) or even lower (approaching the costs earlier in the decade) then the Citronen Deposit will provide investors an enormous leverage opportunity to a market of rising zinc prices.

Investors with a patient, long-term positive view of zinc should not overlook Ironbark at current price levels, given that 10.5 billion pounds of mostly zinc metal are behind the stock.

Valuation:

Catalysts to Valuation Growth

- Drilling results
- Upgrade in Resource Inventory at Citronen
- Definitive Feasibility Study results

Ironbark has issued 320,392,667 shares that are currently trading at A$0.23 for a market capitalization of A$73.7 million. This puts a valuation on mineral assets at A$59.0 million after deducting the June Quarterly cash balance of A$16.9 million.

By comparison, largest Ironbark shareholder, Nystar recently signed a deal with Talvivaara Mining Company of Finland to acquire 1,250,000 tonnes of zinc in concentrate form for US$335 million or US$260 per tonne, or US$71/tonne. This is indicative of the type of valuation that Ironbark’s largest shareholder may place upon its strategic investment.

Talvivaara has an Indicated and Inferred Mineral Resource of 5 million tonnes of contained zinc mineral resource.  This implies an acquisition multiple of US$67/tonne.

Terramin’s (ASX: TZN) main zinc deposit has a mineral resource of 68.6 million tonnes of ore at 4.6% zinc and 1.1% lead as of November 2009 and a Probable Ore Reserve of 24.1 million tonnes at a grading of 5.9 zinc and 1.7% lead. Terramin owns 60% of the project.

This implies an EV/Resource (US$/tonnes) for TZN of US$46.

By comparison, Ironbark’s Citronen has an estimated contained zinc resource of 3.4 million tonnes. Yet, it trades on an EV/Resource of just US$17.1/tonne. In addition, this ascribes zero value to potential upgrades likely this year and next at Citronen.

Ironbark’s current capitalisation gives an enterprise value of approximately A$7.50 per tonne of currently inferred and indicated resource of 4.5 million tonnes of zinc.

Nystar acquired its recent holding in Ironbark at A$0.35 per share each, investing A$15.0 million. This gives an idea as to upside expected by Nystar in Ironbark.

However, with an exploration target of 302Mt to 347Mt @ 4.4 to 5.0% zinc, the current valuation for Ironbark appears singularly conservative.

The shares purchased by Byass increased his indirect stake through Teutonic Investments to 120,454 fully paid shares.

Byass also holds 5,325,000 Ironbark shares indirectly through Adrian Byass ATF The Byass Family Trust and 5,010,000 through Valiant Equity Management Pty Ltd.

Ironbark shares last traded at $0.235.

In an engineering update, Ironbark said preliminary open pit mineable inventory may now represent 10 million tonnes of mineralised feed, and 17 million tonnes of waste, using an unconstrained whittle run representing a significant increase in potential minable mineral feed.

Drill results from Citronen released last week include: 14.9m at 5.6 zinc from 11 metres, 10m at 12.5% zinc from 92.0 metres, 3m at 10% zinc from 248.3 metres and 11.45m at 5.3% zinc from 259.5 metres. 

The ore to waste ratio in the first year is a very low at 1:1.1.

The overall tonnage may be reduced to account for the seasonal river which cuts through the western area of the open pit.

The mineralisation remains drill constrained and will be re-evaluated following the final resource estimate to be conducted later this year once a final resource estimation has been made incorporating the 2009 and 2010 drilling data.

The cost for the open pit mining is estimated at US$ 2.70/tonne moved. Mining recovery is estimated at 97%, with a dilution factor of 5.7%. Operating bench heights will be 5 metres mined in 2 x 3 metre flitches.

Underground mining methods will use; 2 metre to 14 metre vertical ore face heights - use multi bench room and pillar, and 14 metre to 28 metre ore face - vertical long hole stoping.

Current JORC compliant resource for Citronen is 55.8 million tonnes at 6.1% zinc (Zn) + lead (Pb).

Ironbark is aiming to have the feasibility Study completed towards the end of 2010, aimed at progressing the Citronen project toward production.

The holes represent extensional and infill holes.

Additional drill results are awaited and and the drilling will remain ongoing 24 hours per day until the completion of the field season in September.

The engineering, design and development work is ongoing and on schedule towards completing the Feasibility Study. Lead assays have not been included at this stage.

Current JORC compliant resource for Citronen is 55.8 million tonnes at 6.1% zinc (Zn) + lead (Pb).

Ironbark is aiming to have the feasibility Study completed towards the end of 2010, aimed at progressing the Citronen project toward production.

Results include:

- Hole CF10_277 with 16.0m @ 2.9%Zn (3.5%Zn+Pb) from 236.0 including 3m @ 6.0%Zn (6.7%Zn+Pb) and 1m @ 7.0%Zn (7.5%Zn+Pb); and

- Hole CF10_278 with 7.1m@ 2.0%Zn (2.5%Zn+Pb) from 217.0 including 1m@ 6.1%Zn (6.5%Zn+Pb).

The previous estimates of a target resource may be upgraded substantially with the final scale of the extent of the Citronen mineralisation unknown at this time.
 
Further drilling will be required to define any higher grade mineralisation that typically lies within the broader mineralised envelopes as identified within Citronen.

Additional drill results are currently being assayed and drilling will remain ongoing until the completion of the field season in September.

The feasibility study work is on schedule and budget with substantial ongoing engineering, design and development work.  Mine planning has has yet to be conducted on the Beach South, XX Zone or Valley Zone.

Drilling conducted in 2010 is expected to allow mine planning and optimisation work on the Beach South and XX Zone.

Significant drilling results (assays) are pending for drilling in these zones. in 2010 over 17,000m of diamond drilling has been completed.

Ironbark believes that the drilling in 2010 will result in increased confidence levels (JORC Resource categories) and global tonnages in the revised resource estimate due for completion later in 2010.

Citronen currently hosts in excess of 10 billion pounds of zinc (Zn) and lead (Pb).