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European zinc project

at make-or-break

ronbark Zinc Ltd is anxiously awaiting a fi- Post-COVID investments, such as 20 years.
Inancing decision from the American EXIM America’s proposal to pump $US4.1 trillion “I think it could easily be 30 years and
Bank that could finally awaken its Citronen into infrastructure, has Jardine bullish on potentially even longer. What that means is
project in Greenland from more than a dec- zinc’s use in traditional markets. However, you are not captive to any one price cycle,
ade of slumber. he also believes it will soon get a bigger effectively.
EXIM has begun its due diligence on Cit- seat at the green energy table. “Over the next 20 or 30 years, zinc will
ronen, with an initial credit decision expect- “I think right now there is a tailwind in have a role to play in a lower carbon world.
ed in the December quarter. If successful zinc’s traditional markets, but there are also It’s not lithium…but it will have a role to
it would carry the momentum gained from opportunities like offshore wind turbines, play, and I think the ability to capture multi-
the BFS published in July that described grid batteries and agriculture,” he said. ple pricing cycles is a strength of the asset.”
the high-grade zinc project as “world class”. “We’re also seeing India, which is a huge It’s no secret that Europe intends to be at
Ironbark managing director Michael Jar- producer of zinc metal, beginning to im- the forefront of the low-carbon world when
dine, who joined the company in late 2019, port zinc in other forms to add to fertilisers. that evolution, often talked by explorers
says the stamp of approval from EXIM There is a huge potential market there as and producers in the resources industry, is
would put both company and project back well. fully realised.
on the investment radar. In readying for such a world,
“I think the EXIM decision the European Union has contin-
later this year, if it breaks in our ued to introduce economic poli-
favour, will greatly restore the cies such as the Carbon Border
credibility of Citronen as an Adjustment Mechanism which
asset and Ironbark as a com- means from 2026, any emis-
pany,” Jardine told Paydirt. sions created from the produc-
“For the first time, we poten- tion of imported goods will be
tially have a genuine corner- taxed roughly €90/t.
stone lined up to underwrite As a de facto member of the
the development of the asset. EU, Greenland can flaunt this
“I think it will be very satis- tariff and Ironbark expects to
fying to the people in Ironbark benefit from that.
that have worked very hard at “We are inside of that pro-
this for 15 years now. It is excit- posed tariff wall,” Jardine said.
ing to be at a moment of such “That’s a huge advantage.”
inflection.” Pending a successful financ-
The July BFS found a 3.3 ing decision from EXIM, Iron-
mtpa operation at Citronen bark plans to launch into an
would require a $US654 mil- “intensive” diamond drilling pro-
lion capex and generate post- gramme at Citronen. But until
tax free cash flow of $US1.46 that chip falls into place, Jardine
billion, IRR of 15.2% and a is laser focused on the task at
post-tax NPV of $US363 mil- hand.
lion. “There are certainly things
Citronen’s lifespan was also that will be happening in the
increased from 14 to 20 years, background over the next few
based on a resource of 85mt months,” he said. “The No.1 fo-
@ 4.7% zinc and 0.5% lead Ironbark’s Citronen project has the opportunity to turn a cus for me and the company is
and a reserve of 48.8mt @ 4.8% zinc and corner with a positive financing decision from America’s to now tackle the financing chal-
0.5% lead. EXIM Bank lenge.
Binding offtake agreements are already “There’s no certainty we’ll
in place with major Ironbark shareholders “So, whilst zinc is still dominated today land that asset package, but I’m confi-
Trafigura Group Pte Ltd and Glencore Plc. by its more traditional markets, I do think dent that the asset is in the best shape it
Jardine believes the long-awaited financ- that will change.” has ever been in and I’m confident that
ing tick, combined with the BFS, would not Jardine isn’t just bullish on zinc futures. EXIM Bank are going to give us a genuine
only elevate Ironbark’s credibility, but also He also believes Citronen, which is due for chance.
put zinc on the minds of investors who are a mining licence renewal in 2046, could “This is a very large, borderline top-10
currently infatuated with trending commod- receive yet another upgrade to its lifespan zinc mine in the world, and certainly in the
ities such as lithium and copper. and catch multiple waves in zinc pricing. top two in Europe.”
“Even though zinc is the fourth-most “The 20-year mine life could improve be- – Fraser Palamara
traded metal in the world and has a very cause there’s a huge exploration target that
large and deep liquid market, it doesn’t sits on top of that as well as further tonnes
seem to excite people as much because it that are already in the inferred resource
has historically been used for galvanising category,” he said. “So, I think the mine life
steel,” he said. is highly likely to go for much longer than

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