Coffee with Samso Episode 136 is with Michael Jardine, Managing Director of Ironbark Zinc Ltd (ASX:IBG)
When I first came across Ironbark Zinc, I was intrigued by the Citronen Zinc-Lead project in Greenland. It is a project that has basically ticked all the boxes for mining and production to happen immediately.
The Bankable Feasibility Study (BFS) was released in July 2021 which looked pretty good. I reached out to Michael to see if we could have a Coffee and showcase what I think is a ready made project.
It is not every day that you come across a project that seems to have all their ducks lined up in a row yet nothing is happening.
Chapters:
00:00 Start
00:20 Introduction
00:56 Michael introduces the Ironbark Story.
01:42 Geology of the Citronen Zinc Project.
02:47 How has the market reacted to the BFS?
04:38 Zinc Price.
07:24 What is the process of breaking dirt for Ironbark?
09:55 How do you manoeuvre through the potential cost of Artic mining?
13:10 Why Citronen is easier than other "Artic" mining projects.
14:53 The Jurisdiction Question.
17:32 The Uranium Spanner in the Works.
18:15 Exploration upside of Citronen.
19:52 Greenland is a good place for a mining project.
21:22 The Green - ESG Zinc conversation.
24:55 What are the drivers of the Zinc market?
26:39 Substitution of Metals.
27:29 Can Citronen be a Green process?
29:44 Why invest in Ironbark?
31:45 The marketcap of Ironbark is low.
32:44 Conclusions
PODCAST
About Michael Jardine
Managing Director
Mr. Jardine has a strong background in Corporate & Project Finance, Strategy Development and Minerals Marketing and his previous experience includes Board & Executive roles at a number of junior ASX listed resource Companies.
Mr. Jardine has previously served as a Director of Atrum Coal Limited (Atrum Coal NL (ASX:ATU)) and Pegasus Metals (ASX:PUN) Limited (Pegasus Metals (ASX:PUN), now Scorpion Minerals Limited). Mr. Jardine also served as the General Manager, Corporate Development for formerly listed General Mining Corporation (ASX:GMM) from 2013-2016, and Eastern Goldfields (now Ora Banda Mining, Ora Banda Mining Ltd (ASX:OBM)) during the same period.
About Ironbark Zinc Limited (ASX: IBG)
Ironbark Zinc Limited (Ironbark Zinc Ltd (ASX:IBG)) is developing the 100% Owned Citronen Zinc Project
- 30 Year Mining Licence Granted
- Bankable Feasibility Study Complete
- Pathway to Funding
- Supportive Partners – Nyrstar & Glencore
- Strong Zinc Price
Ironbark is focused on developing its 100% Citronen Zinc-Lead Project in Greenland. In late 2016, a 30 Year Mining Licence was granted by the Greenland Government and in September 2017 Ironbark released a cost update to its 2013 Feasibility Study. The results of the study demonstrated compelling economics of an NPV of US$1,035M (US$909M post tax), IRR 36% (post-tax 35%) and life of mine revenue of US$6,364M. Please refer to the announcement of 12 September 2017 for full details and price assumptions.
The Feasibility Study Update (2017) was based on the original 2013 Feasibility Study but has incorporated a recent review of capital and operating costs. Several major changes that have been highly favourable include improved global benchmark smelter treatment terms, lower fuel prices (which represents one of the Projects´ largest forecast costs of operation), and the long-anticipated recovery in the zinc price. There have been some cost increases, including wages and some materials, however, the result is a far more robust project than ever before which is reflected in a post-tax NPV of US$909 million, placing Ironbark in a strong position to become a major new zinc producer.
Citronen represents one of the world’s largest undeveloped zinc deposits with 12.8 billion pounds of zinc defined in its open-ended JORC compliant resource. Current mine life stands at 14 years. However, the project is at this stage only limited by drilling and is open in most directions. The ore zones are simple, flat and continuous which lead to a simple room and pillar underground mining operation. The higher grade underground mine is supported by open-pit fresh sulphide ore with a low strip ratio. Proven DMS and flotation techniques will produce separate zinc and lead concentrates. The project benefits from a mining friendly government with low sovereign risk. Mining will take place all year round with a three month shipping window.
Ironbark is supported by its major shareholders Nyrstar – a major global zinc smelter group, and Glencore International AG – the world’s largest zinc trader, major zinc miner and smelter.
The price of zinc has remained exceptionally strong throughout 2017, and rose steadily throughout the September quarter, reaching 10 year highs. Zinc, the fourth most mined metal by volume, is mostly used for galvanising steel, and has run hard since June 2017 reaching a peak value of US$3,264/tonne on 3 October 2017. LME zinc stocks are currently below 270,000 tonnes, which is down by over 40 percent from a mid 2016, which suggests market tightness. The Chinese Shanghai stockpiles are following the same trend and are also substantially lower. Lower Chinese treatment charges and better zinc payability terms being offered by the smelters also point to a genuine market tightness.
It has been widely forecast that zinc prices may continue to trend upwards in the near future driven by increasing tightness in the concentrate market, following the closure of several major mines and healthy and growing zinc demand. This has been observed already with increasing Chinese refined metal imports. Overall tightness in the market and the major metal warehouses such as the London Metal Exchange (LME) and the Shanghai Exchange with regards to falling stocks are likely to be supportive and drive zinc prices even higher. In the context of Ironbark, this should prove to be a very supportive financing environment.
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