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Ironbark Zinc targets growth initiatives and Greenland development in new leadership era

Snapshot

Its new team plans to unveil growth initiatives at an AGM in two weeks as the leaders envisage a Citronen zinc-lead development.

Ironbark Zinc Ltd - Ironbark Zinc targets growth initiatives and Greenland development in new leadership era

Quick facts: Ironbark Zinc Ltd

Price: 0.013 AUD

ASX:IBG
Market: ASX
Market Cap: $11.96 m
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  • Ironbark’s lead asset is the flagship Citronen Zinc-Lead Project in Greenland.  
  • The company’s September 2017 feasibility study for Citronen modelled a 14-year mine at the project which has an approved mining licence. 
  • A second asset in the portfolio is Captains Flat, a joint venture run with Glencore subsidiary NSW Base Metals at the old Lake George mine in NSW. 
  • The West Perth company raised $1 million in a recent raising to high-quality investors and is focused on value appreciation so it can help facilitate a development at its flagship project. 
  • Other projects in its portfolio will also get a look-in with its future efforts. 

I look forward to unveiling a number of growth initiatives at the upcoming AGM that will enable the company to progress its portfolio of projects in 2020.

Ironbark Zinc chairman Fred Hess, October 25, 2019

What does Ironbark Zinc do?

Ironbark Zinc Ltd (ASX:IBG) is an explorer and would-be developer with multiple assets and a flagship zinc-lead project in Greenland.

The Western Australian company and Glencore PLC (LON:GLEN) (JSE:GLN) (OTCMKTS:GLCNF) (OTCMKTS:GLNCY) partner is focused on furthering development work at its projects from its headquarters near Perth.

Ironbark recruited new managing director Michael Jardine in September 2019 who joined after Fred Hess became the company’s new non-executive chairman earlier in the month.

The company subsequently received $1 million in funding from high-quality investors, with another new director, Danny Segman, continuing to buy shares on market since he first took his seat on the company board in May 2019.

New MD Jardine said in October 2019: “The company is delighted with the support received … and welcomes a number of new institutional and sophisticated investors to the register who are supportive of our efforts to develop Ironbark’s flagship Citronen project.

“With the support of shareholders and the new board, I look forward to unveiling a number of growth initiatives at the upcoming AGM that will enable the company to progress its portfolio of projects in 2020.

“Importantly the company is currently engaging with a number of stakeholders who are aligned with our drive to increase the equity value in IBG, ultimately assisting in making the delivery of the Citronen project to market a reality.”

Geologist and former leader Jonathan Downes has moved to a non-executive director role at the WA company.

The exploration company plans to unveil growth initiatives at its upcoming annual meeting to be held at chartered accounting firm PKF Perth on November 28, 2019.

Who leads Ironbark Zinc?

Managing director Michael Jardine has a strong background in corporate and project finance, strategy development and minerals marketing.

Jardine was a director for Atrum Coal Ltd (ASX:ATU) and Scorpion Minerals Ltd (ASX:SCN) when it was Pegasus Metals Limited.

He is a non-executive director of TNT Mines Ltd (ASX:TIN) and Indus Energy NL (ASX:IND) and has worked as a corporate advisor for Perth-based boutique investment outfit Argonaut Limited.

Jardine also spent several years in senior executive roles at global data firm Ipsos Limited, in Perth and the UK, when it was known as Synovate.

New Ironbark chairman Frederick Hess is a non-executive director and was previously MD of PanAust Limited, which was snapped up by Chinese state-owned-enterprise Guangdong Rising Assets Management.

What does Ironbark Zinc own?

The key asset is the Citronen Zinc-Lead Project in the Danish territory of Greenland.

Citronen could be one of the world’s largest zinc mines if developed, hosting more than 13.1 billion pounds of zinc and lead.

Ironbark’s Citronen mine project is licensed and permitted for 30-years, fuelled by a feasibility study completed in 2017.

The September 2017 feasibility study for Citronen modelled a 14-year mine life.

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

A net present value (NPV) for the large project was US$1.034 billion (US$909 million after tax) with a 36% internal rate of return (IRR) – 35% after tax.

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

If the large project is developed as outlined, further upgrades to mine life and capacity could still be possible as the resource remains open.

How is the company taking a different direction?

Ironbark is now taking a different tack with Citronen, starting a study in 2019 to evaluate a potential high-grade starter mine operation, which could target production of 1 million tonnes (Mtpa) a year.

This option would likely require less capital and be cheaper to fund with more flexible financing options.

Citronen’s inventory is 45 million tonnes grading 5.3% zinc and 0.5% lead in a 70.8 million tonne mining resource grading 5.2% zinc and 0.5% lead, or 5.7% zinc and lead.

A higher grade 29.9 million tonne resource has been estimated at 6.6% zinc and 0.6% lead, or 7.1% zinc and lead.

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

What are Ironbark Zinc’s other projects?

Other Ironbark projects in Greenland are the Mestersvig Base Metals Project and the Washington Land Base and Precious Metals Project.

Australian projects previously presented by Ironbark are the Fiery Creek Gold-Copper Project, Peakview Zinc-Lead-Copper-Silver Project and Captains Flat.

Captains Flat hosts the historic Lake George mine mined in the late-1800s and is run in a 50% joint venture with Glencore subsidiary NSW Base Metals Pty Ltd.

Inflection points

  • New growth initiatives unveiled at the company’s upcoming November 28 AGM in West Perth
  • Results from project development activities executed into 2020, funded by recent capital injections
  • Returns from new leadership line-up, including increased shareholder value and improved attractiveness of projects for potential investors
  • Seasonal fluctuations in work program and development activity progress
  • Merger & acquisition activity
  • Joint venture and farm-in agreements
  • Base metals and precious metals commodity sentiments, including for zinc and lead
  • Government and international investor confidence in Greenland and Denmark
  • Support in Greenland and Denmark for the various types of foreign investment

Ironbark Zinc will hold its annual general meeting in Western Australia on November 28, 2019 at PKF Perth at 35 Havelock Street, West Perth at 10am WA time (1pm EDST).

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