Ironbark Zinc – ASX:IBG

Current Share Price $0.09 per share
Market Cap 30/3/15 = $40 M

as of the Sept 14 Quarterly they have lodged the mining licence with the Greenland government 7th October

Currently ZInc Prices are at 5 year highs and are significantly above average for 25 year chart over $1/pound

Zinc is 4th most globally used metal

looming major zing mine closures

$50m Glencore merger and acquisition funding facility

70.8Mt @ 5.2% ZInc = 3,681,600 t of Zinc or 8,099,520,000 pounds
or
132Mt @ 4% = 5,280,000t of zinc or 11,616,000,000 pounds

Highlights of the Feasibility Report included:

NPV: US$609 Million (US$354M post tax) = 716 AUD (85c) or 416 post tax
IRR: 32.0% (22.2% post tax)
Equity Return: 37.9% (Geared NPV after tax)
Capital Cost: US$429.3 Million inc contingency (US$484.8M with First Fills)
Operating Cost: US$0.59/lb Zn (Payable, Net of by-product credits, Years 1-5, Smelter fees additional US$0.12/lb Zn)
Mine Life: 14 years
Life of Mine Operating Costs: US$3.42 Billion
Life of Mine Revenue: US$5.65 Billion

The Citronen base metals project benefits from the following favourable characteristics:

Located in Greenland – low sovereign risk
Located adjacent to deep, protected water on the doorstep of Europe and North America
Simple, flat and continuous ore zones
Open-pit fresh sulphide potential with very low strip ratios to supplement higher grade underground mined mineralisation
Long mine life, with resource open to further mineralisation in almost every direction
Simple, predominantly underground room and pillar mining operation
One of few world class deposits wholly owned by a junior company
Production scheduled at a time of many planned zinc mine closures, a shortage of zinc supply and anticipated high zinc prices
Ironbark is working with China Nonferrous under a MOU to deliver an EPC fixed price contract and financing for the project

Potential MOU with China Non Ferrous Corp

Large Backers

Cost of Operation 71c/pound

Major Mine Closures (11% of world supply in next 4 years)

My Conclusion

High Capex (needs funding (currently has large backers))
High opex Costs as historically the zinc price has not managed to exceed 50c
although supply side problems in the coming years may prove a catalyst

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