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ReGIonAl RoUnD-UP

Red, white, blue and Greenland

n July last year, Ironbark Zinc Ltd flow of $US1.46 billion and a post-tax
Imanaging director Michael Jardine NPV of $US363 million, IRR 15.2%
was waiting on the one signal needed and a capex of $US654 million. Cit-
to complete the company’s quest for ronen’s lifespan was also upgraded
debt funding that could make or break from 14 years to 20.
its flagship Citronen zinc project. Jardine said the company was de-
Jardine, who joined Ironbark in liberately conservative with the study.
2019, was awaiting word from US “The project’s economics are es-
bank EXIM which would be the key to sentially locked down in that BFS, but
awakening Citronen, a project slum- there are flexibilities,” he said. “We
bering in Greenland for more than a modelled the study at $US1.30/lb and
decade. the zinc price over the last six months
The wait continued for another five has already been above that.
months, but in December the Ironbark “For every 10c in the zinc price that
team was given reason to celebrate moves, we could add $US150 million
the new year when EXIM awarded to the NPV and about $US360 million
the preliminary approval for $US657 to the post-tax-free cash flow.”
million in funding. Ironbark now has a list of criteria
Although non-binding, the clearing to focus on during Phase 2 of due
of Phase 1 due diligence was a major diligence which includes further fi-
achievement as Phase 2 begins early nancial, technical, environmental and
this year. Ironbark’s long-idling Citronen project in Greenland still legal reviews as determined by EXIM
“It is a huge step forward for the busi- has a long way to go but a recent preliminary debt funding (such as finalisation of construction
ness, there is absolutely no doubt,” Jar- approval from EXIM Bank has propelled it closer than ever arrangements).
dine told Paydirt. “We’re not completely before to moving its wheels Jardine said there is no definitive
there yet, but we have cleared a major timeline for this next stage.
hurdle in terms of completing a project ance on zinc imports, which amounted to “We’ve had an aspirational target
funding package. 710,000t in 2020 – 83% of its domestic con- to be on site in Greenland in the summer of
“There’s a series of gateways with EXIM sumption. [2022]. If that’s to be achieved, then we need
bank that you need to keep making your “[Zinc’s] credibility absolutely has to make pretty significant progress on both
way through before you get to the final point changed,” Jardine said. “It’s beginning to get furthering the debt and getting the equity-
which would be board approval. We are now more recognition in that it forms part of the side of the equation completed within the
closer today than we have ever been before base metals suite that will futureproof the first half of [2022],” he said.
to having this asset financed. world. Ironbark raised $4 million in capital in De-
“There is now a very clear pathway in “If the electrification goals that govern- cember to aid the next phase of EXIM’s due
terms of what is required to happen in tak- ments are committed to are actually going to diligence. This was completed through a
ing that debt all the way through to uncondi- happen, then really all of the possible, prob- share offering at 4.4c/share – a 2% discount
tional approval. The fact that we successfully able and likely base metals projects around to the five-day average at the time.
cleared Stage 1 really does count for a lot. If the world need to start getting up.” Ironbark plans to test a “very large” ex-
there were things to perceive as red flags… Zinc spot prices saw a steady climb ploration target on top of its existing reserve
then they wouldn’t have issued the prelimi- throughout 2021, travelling from $US2,694/t and resource to boost its grade profile. Zinc
nary letter.” to $US3,586/t on the year at time of writing. grades across the entire tenure currently
The preliminary offering brings with it an A major spike occurred in October, reach- range from 3% to up to 6.5%.
interest rate of 2.2% per annum over 8.5 ing a high of $US3,794/t which hadn’t been But any exploration or infill drilling won’t
years with the option to extend. EXIM en- seen since January of 2018. happen until construction begins. In the
listed independent Washington based firm “[The spike in October] was off a relatively meantime, Jardine still has much to admire.
Greengate LLC to advise the due diligence. small amount of zinc metal being taken out “I want to commend the work of the team
After the successful indication, Jardine of the supply chain, mostly in Europe,” Jar- and the people around me,” he said. “The
called it a “genuine turning point in the life of dine explained. “What that said to me, is that company achieved a lot in 2021 but we are
Citronen”, being arguably the first time it has the zinc market is much tighter than anyone certainly not satisfied yet.
received large-scale recognition in capital expected.” “We’re fortunate to have some very com-
markets. Ironbark seeks to fill this tight market with mitted people in the company and support-
Recognition and credibility have long been Citronen, which has been sidelined for more ing it, and I would like to thank all of them for
an important factor for Jardine, in terms for than 10 years. the hard work they have put in the past year.”
the company, Citronen and zinc as a com- The project contains a mineral resource – Fraser Palamara
modity. Zinc, along with nickel, was recently of 85mt @ 4.7% zinc and 0.5% lead, and
identified as an official critical mineral by the an ore reserve of 48.8mt @ 4.8% zinc and
US Geological Survey. 0.5% lead.
This was reflective of the country’s reli- A July BFS indicated a post-tax-free cash

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