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viewFireweed Zinc Ltd

Fireweed Zinc sitting on a massive resource in Yukon with plans to unlock further value

Snapshot

The company boasts a huge land package of over 544 square kilometres at its flagship Macmillan Pass property

Fireweed Zinc Ltd -

Quick facts: Fireweed Zinc Ltd

Price: 0.97 CAD

TSX-V:FWZ
Market: TSX-V
Market Cap: $52.19 m
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  • Huge footprint in Yukon
  • A robust maiden preliminary economic assessment
  • Good access to Asian market 

What Fireweed Zinc does:

Fireweed Zinc Ltd (CVE:FWZ) (OTCMKTS:FWEDF) is a junior explorer building a district-scale zinc deposit in mining-friendly Yukon province, Canada.

The company boasts a huge land package of over 544 square kilometres (sq km) at its flagship Macmillan Pass property, which is host to the Tom, Jason, Boundary Zone and End Zone zinc-lead-silver deposits.

Tom and Jason already boast a combined resource of 11.21 million tonnes (Mt) of higher confidence indicated resources at 9.61% zinc equivalent (ZnEq) and 6.59% zinc, 2.48% lead, 21.33 grams per ton (g/t) silver, and there is potential to expand this further. The Boundary zone, Tom North zone and End zone have significant zinc-lead-silver mineralization drilled but are not yet classified as mineral resources.

Notably, an existing camp, road access and a government airstrip are already in place.

In 2018, an attractive preliminary economic assessment (PEA) was published, which indicated a long mine life of 18 years, and showed a pre-tax net present value (NPV) of C$779mln, using an 8% discount rate, with an internal rate of return (IRR) of 32%. The report demonstrated that Macmillan Pass was not just viable at the zinc, lead and silver prices levels contemplated in the study, but highly robust.

Highlights included forecasts of 32.7 Mt of mineralization mined at an average processing rate of 4,900 tons per day; 1.54 Mt of zinc, 0.88 Mt of lead, and 37mln ounces of silver in concentrate shipped; and average yearly contained-metal production of 85,000 tonnes zinc, 48,000 tonnes lead and 2mln ounces of silver.

The company used base case metal price forecasts of US$1.21 per pound for zinc, US$0.98 per pound for lead and US$16.80 per ounce for silver.

In 2018, Fireweed also closed its previously announced acquisition of the Nidd property with Teck Metals Ltd, a subsidiary of Teck Resources Ltd. Nidd lies on the western extension of the Macmillan Pass and covers 7,393 hectares in 372 mineral claims, expanding the firm's claims to 544 sq km.

With the addition of Nidd, Fireweed now has all four known large zinc mineralized systems in the region – Tom, Jason, Boundary Zone and End Zone – as well as many other zinc exploration targets including the entire highly prospective “fertile corridor”, extending from Tom to the Boundary Zone and beyond.

How is it doing:

2020 started with Fireweed revealing its plans to drill at Boundary toward an initial NI43-101 resource estimate after impressive drill assays last year, which showed  wide zones of potential open pit mineralization and assays included 100 metres (m) of 7.94% zinc from surface.

This spring also saw the company report a potential major boost to the property, as the Yukon government and the Ross River Dena Council (RRDC) First Nation reached an agreement in principle on a C$71 million to upgrade roads in the area. The work includes bridge replacement and safety improvements on the North Canol Road and resurfacing of 59.5km of the Robert Campbell Highway.

The North Canol Road is the access to Macmillan Pass, while the Robert Campbell Highway is part of the route from the site to a shipping port.

On June 11, there was more news on this year's exploration plans, in which Fireweed said it will focus on several early-stage targets beyond the known deposits ahead of potential drilling at these sites.

There are seven of them: the 240 Mile target; the Round Mountain target, the End zone, the Zinc Moss target, the Bog zone, the Volcanic target and the Eleven target. The latter is a 1,000 m by 400 m zone of up to 1.8% zinc in soil above and adjacent to a splay of the so-called Hess Fault, which the firm says is a major structure that connects Jason, End Zone, Boundary Zone and the Eleven creek target along a 'fertile corridor'.

 In April, the firm hired financial and mining industry veteran Peter Hemstead as its finance chief. In the same month, it completed a non-brokered placing to raise gross proceeds of over C$1.14 million for  Macmillan Pass work and working capital.

Inflection points:

  • Start of exploration and subsequent results
  • Metals price moves

What the boss says:

In Fireweed's latest statement, chief executive Brandon Macdonald told investors: "This year, in addition to continued work on Tom, Jason and Boundary zone, our geologists will be investigating some of these new early-stage targets in preparation for potential drilling. The district is known to host those three large zinc deposits with exciting evidence of potentially more. How many more might there be? We hope to start answering that question this summer.”

And speaking to Proactive's Steve Darling in April, about the outlook for base metals due to the coronavirus (COVID-19) pandemic, Macdonald said there would be a fall in demand, certainly in the short term due to the impact of COVID-19, the question will be whether a reduction in supply more than offsets the reduction in demand and then how quickly does demand bounce back.  

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Fireweed Zinc wraps up 2020 season the company describes as "short but intense"

Fireweed Zinc (CVE: FWZ) CEO Brandon Macdonald joined Steve Darling from Proactive Vancouver to bring news the company has completed their 2020 drilling season at their Macmillan Pass Project in the Yukon. Macdonald telling Proactive what the drilling program consisted of and where they were...

1 week, 2 days ago

5 min read