Ironbark Zinc (ASX: IBG) has highlighted the ongoing reduction in global warehouse zinc stock levels that have in turn led to prices recently exceeding $0.90 per pound, a price not seen since February 2013.
The company received a price and volume query from the ASX after its share rose to an intra-day high of $0.069 yesterday, up from a close of $0.056 on Wednesday, 14 January.
Shares in Ironbark had closed at $0.067 with more than 6.2 million shares traded.
The company said it was not aware of any information that has not been released to the market which could explain the recent trading.
However, it noted that that the London Metal Exchange had in addition to reporting fallen warehouse zinc stock levels of almost 30% over the past 12 months, recently confirmed zinc stock levels had fallen below 900,000 tonnes, less than one month's global zinc consumption.
The rate of declining stockpiles appears to be increasing due to ongoing mine closures,including the Brunswick and Perseverance mines, and limited new production slated to meet the shortfall.
This has resulted in the zinc price recently exceeding $0.90 per pound.
Ironbark added that despite zinc being a major industrial metal, it has limited remaining zinc developer and miner peers listed on the ASX, a position further enhanced by the recent $269 million cash acquisition of Perilya Limited.
It also noted that a Eureka Reported dated 13 January 2014 had summarised the status of the zinc market and made a recommendation regarding the company.
The company wholly-owns the world class Citronen zinc and base metal project that is located in Northern Greenland where a Feasibility Study had forecast production of 3.3 million tonnes of feedstock; initial mine life of 14 years and CAPEX $484.9 million.
Life of Mine OPEX is estimated at US$3.42 billion to produce total revenue of US$5.65 billion.
The Internal Rate of Return is estimated at 32.0% (22.2% post tax), and Net Present Value is US$609 million (US$354 million post tax).
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