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Ironbark Zinc Ltd raises funds to advance Citronen Zinc Project

Published: 20:00 03 Apr 2016 EDT

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Ironbark Zinc Ltd (ASX:IBG) will raise up to $1.5 million at $0.032 per share in an oversubscribed bookbuild capital raising from institutional and professional investors to advance its Citronen Zinc Project in Greenland.

The project is one of the largest undeveloped zinc projects in the world.

A Share Purchase Plan at the same price has also been launched.


Why Citronen is world-class

The high grade zone alone at Citronen boasts 29.9 million tonnes at 7.1% zinc and 0.5% lead. This is within a larger resource of 132 million tonnes at 4.0% zinc and 0.4% lead.

The Citronen resource remains open ended in every direction, conceivably significantly extending the current life of mine of 14 years.

This provides leveraged exposure to investors.


Zinc outlook


The outlook for the zinc price is looking up as final production of zinc concentrate has been shipped from both the Lisheen mine in Ireland and the Century mine in Australia, following the closure of the mines due to exhaustion of their ore bodies.

The two mines are known to account for 5% of the global zinc supply, which is likely to provide further support for the zinc price through ongoing tightening of supply and stockpiles.

The positive supply and demand imbalance in the zinc market is expected to support a firming zinc price and the development of the next tranche of zinc mines in the future. The zinc price has risen 25% since January 2016.


Jonathan Downes, managing director, commented:

“We are delighted by the overwhelming interest received for the placement, reflecting the strong support for Ironbark and our 100% owned world class Citronen Zinc Project.

“The funds will be used for continued permitting and application activities required to secure a mining license for the Citronen Project in the short term, further work to update the Citronen Feasibility Studies by China Nonferrous and general working capital purposes.

“We wish to take this opportunity to thank our existing shareholders for their continued support and note that as zinc stockpiles fall below 5 year lows we expect upward pressure on the zinc price which will provide a supportive development environment for the Citronen project."


Share Purchase Plan

In addition to the placement, Ironbark has launched a Share Purchase Plan to raise up to $0.5 million at the same price as the placement.

 

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