Join our daily newsletter At The Bell to receive exclusive market insights
- Ironbark Zinc (IBG) shares have fallen on the release of its bankable feasibility study for the Citronen Zinc-Lead Project in Greenland
- It marks the latest stage in the ASX-lister’s bid to secure funding for the project
- Ironbark says the study has provided a “grounded and pragmatic” view of the project but resulted in a material decrease in its net present value
- The operation is expected to deliver a US$1.46 billion (A$1.97 billion) post-tax free cash flow and a post-tax net present value of US$363 million (A$491 million)
- Ironbark Zinc shares are down 6.17 per cent and trading at 2.3 cents
Ironbark Zinc (IBG) shares have sunk on the release of its bankable feasibility study for the Citronen Zinc-Lead Project in Greenland.
The study marks the latest stage in the company’s effort to secure funding for the project, which is said is to be one of the world’s largest undeveloped zinc-lead resources.
IBG sought to update the development plan for the project — the first in more than a decade —and approach economic assumptions through a more conservative risk filter.
The study found the combination of the changes extended the project’s mine life to 20 years, improved per tonne shipping costs, increased ore reserve and generated a more in-depth underground mine design.
However the study also incorporated a more conservative zinc price (US$1.30 vs US$1.38/lb), full recognition of tax liabilities, and cost increases occurred across CAPEX, OPEX (mostly energy costs) and overall project contingency.
The company acknowledged the net effect of these changes was a material decrease in its headline post-tax net present value.
Specifically, Ironbark said the 3.3 million tonnes per anum operation was expected to deliver a US$1.46 billion (A$1.97 billion) post-tax free cash flow and a post-tax net present value of US$363 million (A$491 million).
Ironbark Zinc Managing Director Michael Jardine maintained the study had delivered a grounded and pragmatic view of the project.
“This study worked through several challenges that required creative thinking, disciplined decision making in terms of trade-offs and a willingness to reconsider some long-standing assumptions about the project,” he said.
The Managing Director also said project funding solutions had moved forward over the period.
“Project funding solutions were actively progressed in parallel to the BFS workstream resulting in a promising preliminary dialogue with US EXIM Bank to provide substantial debt support linked to US content.”
Ironbark Zinc shares were down 6.17 per cent and trading at 2.3 cents at 12:48 pm AEST.
