Ann: 2021 BFS Confirms Citronen as World Class Zinc Project, page-21

Here is an AFR article that might give you some comfort on the IRR at above 15%

Miners consider lowering the hurdle on projectsPeter KerResources reporterSep 2, 2019 – 12.00amSaveShareSuper low interest rates are tempting Australian miners to break with tradition and invest in projects with rates of return below 15 per cent, with one mining boss warning an inflexible approach to investment hurdles would disadvantage investors.The 15 per cent rate of return has been the minimum investment requirement for most big miners over the past decade, with BHP chief executive Andrew Mackenzie briefly raising that hurdle to 20 per cent in the early years of his tenure.But BHP and other miners are now contemplating approval of multi-billion dollar projects that may have rates of return below 15 per cent.BHP's $US5.7 billion Jansen potash project is expected to return between 14 per cent and 15 per cent, but returns would be significantly lower if BHP included the $US2.7 billion it has already spent on preparatory works.An expansion of South Australia's Olympic Dam could return anywhere between 12 per cent and 25 per cent, depending on the final model selected.Alumina Limited is considering whether to spend hundreds of millions of dollars expanding the West Australian alumina refineries it shares with Alcoa, and chief executive Mike Ferraro said miners should be flexible about the rates of return they expect from projects.RELATED QUOTESAWCAlumina Limited$1.552 -3.27%1 year1 dayJul 20Jan 21Jul 211.3501.6501.950Updated: Jul 19, 2021 – 12.22pm. Data is 20 mins delayed.View AWC related articles NCMNewcrest Mining$26.420 -1.78%Jul 20Jan 21Jul 2122.50031.50040.500BHPBHP Group$50.340 -2.95%Jul 20Jan 21Jul 2133.00044.00055.000FMGFortescue Metals Group$25.510 -1.05%Jul 20Jan 21Jul 2115.00021.00027.000"If your investors can only get 1 per cent putting their money in the bank, or 2 per cent somewhere else, why would you stick to a very high, fixed rate of return? It disadvantages you and your investors,'' he told The Australian Financial Review."While we have an investment framework that we follow, we don't have a minimum set return because it really depends on the project ... the scale of the project, the location of the project, the country risk of the project.''You need to have some flexibility in it, as long as it makes good economic sense compared to the rate of investing in something else which is less risky, it is good to build in that flexibility.''The comments come as federal Treasurer Josh Frydenberg urges business to invest more, rather than devote the majority of spare funds to shareholder returns.RELATEDTreasurer's plea to business: InvestNewcrest Mining chief executive Sandeep Biswas said he would be more willing to accept lower hurdle rates on ''greenfield'' projects than on ''brownfield'' expansions of existing mines, particularly if those greenfield investments could be improved over time.''We may do a transaction that has an IRR (internal rate of return) less than 15 per cent, but we are unlikely to do it unless we have a clear pathway where the application of our skills, our technology and our expertise can't get us to 15 per cent, that is how we think about it," he told The Australian Financial Review."You have got to have some headroom, there is always stuff that goes against you, it is a very uncertain world, so the more buffer you have in terms of the quality of your investment, the more resilient it will be.''BHP chief executive Andrew Mackenzie said low interest rates meant the time value of money was less of a concern these days, and that meant miners should not feel pressure to invest large sums upfront when approving projects.Mr Mackenzie said Jansen was a good example of how a small initial investment may not look attractive using traditional financial analysis, yet the slower entry provided valuable optionality and information that helped the investor to avoid mistakes when making subsequent, larger investments in the same project.''Instead of going for these big bang early investments that the net present value calculation would say you should do, because you’re worried about the time value of money – less of a concern, I would say, these days, with such low interest rates – you actually just go in, in a small way, into the elements of the project, into the ore body, understand what’s going on for a small cost which could be added to a bigger project rather than rushing in up front,'' he told analysts on August 20.''We’ve actually done that, I think, quite successfully in the way that we’ve approached our Jansen development, the careful way in which we’re thinking about Olympic Dam.RELATEDBHP approaches sliding doors moment at Olympic Dam''Ultimately this means that we spend a lot less capital. It may not make sense from an overall NPV, but you give yourself flexibility to take account of what’s going on in the marketplace, what’s going on in the ore body, what’s going on in the politics, what’s going on in technology.''Ultimately that flexibility is worth a lot more than it might seem if you just did a simple (net present value calculation).''Mr Mackenzie said BHP was likely to take a similarly slow, small initial entry when developing its Trion oil prospect in Mexican territorial waters.OZ Minerals forecast a return of more than 20 per cent when it decided to build the Carrapateena copper mine in South Australia, which will produce first copper before Christmas.But OZ managing director Andrew Cole said his company did not apply a strict hurdle rate to all projects, with different projects requiring different rates of return depending on their risk status.''If you look at projects today getting capital is not the constraint, there is plenty of available capital in the market to put toward projects, the challenge is finding really good projects to invest it in, that is the constraint,'' he said.OZ is studying development of Western Australia's West Musgrave base metals project, which is located close to the junction of the WA, SA and Northern Territory borders, and Mr Cole said the risk factors attached to that project ensured OZ would likely look for returns above 15 per cent before investing.''It is a remote operation, it needs to be stand alone, it is going to have its own self generating power station, so given the risk around that you would want to see a good healthy return from it," he said.Fortescue Metals Group chief executive Elizabeth Gaines said IRR was just one measure the company's board considered when making investments, with the board ultimately wanting to see a return above the cost of capital and a return to shareholders on their investment.Janus Henderson Natural Resources fund manager Tal Lomnitzer said he was comfortable with the traditional 15 per cent hurdle rate, but said mining companies poor track record of investments earlier this century had scared many of them away from investing."With regards to capital allocation, the bigger issue for the big mining companies is the significant misallocation of capital during the supercycle has led behaviour to shift a little bit too far the other way, and there is perhaps a reticence to take final investment decision on large projects," he said."We don't want to see companies pushing growth for growths sake, we need to see returns that will be positive and I think a 15 per cent rate of return is acceptable.''But that needs to be done in a sensible and cautious way, so we like to see a balance between distribution of capital and growth, so we get some capital appreciation as well as a return of capital."