Building a district-scale zinc deposit in mining friendly Yukon
Preliminary economic assessment showed attractive numbers
Experienced management and backers
What does Fireweed do:
The company boasts a huge land package of over 544 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 Mt (million tonnes) of indicated resources at 9.61% ZnEq (zinc equivalent) and 6.59% zinc, 2.48% lead, 21.33 g/t (grams per ton) silver, and there is potemntial to expand this further. Notably, an existing camp, road access and a government airstrip are already in place.
Late last year, 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 square kilometers (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.
The End Zone hosts high grade zinc-lead-silver mineralisation and last year drilling hit high grades, which included 4.78% zinc, 10.17% lead, 87g/t (grams per ton) silver over 11.08m. Further drilling is planned for 2019 to expand on these results.
Last year, an attractive preliminary economic assessment (PEA) was published, which indicated a long mine life of 18 years, and showed a net present value (NPV) of C$779mln, using an 8% discount rate, with an internal rate of return (IRR) of 32%.
The firm said 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 32.7mln tons of mineralization mined at an average processing rate of 4,900 tons per day; 1.54mln tons of zinc, 0.88mln tons 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.
How is it doing:
It's been a busy spell for the company and exploration started again in Yukon last month due to some better weather.
In February, the group had raised around C$5 million gross from a financing, which will be used for this year's work program focused on exploration and resource expansion.
On July 25, it told investors it was making good progress, revealing that it had now sunk 12 holes and was 80% complete on an airborne topographic survey, while sampling and mapping continue.
Drilling started at the Tom North target, which the firm believes may be amenable to open pit mining, to test a potential 600 meter long north extension of the large Tom West mineral resource. Seven holes at Tom North were completed after the program was extended.
Meanwhile, a step-out hole at Tom West has been completed to extend the high-grade feeder mineralization to the south and another step-out was sunk at Tom East.
Another hole tested as target R, the company said, where coincident gravity-magnetic highs and a soil anomaly were detected near the camp access road north of the Tom deposits and two holes were completed on the Jason North target, which lie immediately north of the large Jason main deposit. Assay results are pending.
The firm has a huge amount of ground so it can't drill everywhere - which is expensive - hence it must use sampling and other exploration methods to rank targets.
What the CEO says:
Fireweed President and CEO Brandon Macdonald told Proactive in June about the summer exploration program and also touched on the currently depressed mining sector, which he believes, will bounce back.
"There's no doubt in my mind that there's a light at the end of the tunnel. The unclear thing is how long is the tunnel. We know we're sitting on a very, very high quality project (Macmillan Pass) and that the market is a bit upside down and that we have to suck it up and tough it out and when things return, we'll get revalued properly."