- Boasts huge footprint in Yukon
- Guided by robust maiden preliminary economic assessment
- Recent drilling at Boundary Zone discovered mineralization
What Fireweed Zinc does:
Fireweed Zinc Ltd (CVE:FWZ) (OTCMKTS:FWEDF) is a junior explorer building a district-scale zinc deposit in Canada's mining-friendly Yukon province.
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 comprise 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, indicating a long mine life of 18 years, and showed a pre-tax net present value (NPV) of C$779 million (mln), 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.
Fireweed also acquired the Nidd property, which 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 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:
Fireweed Zinc has been making steady progress so far in 2021.
On May 18, the company revealed that it had kicked off metallurgical and sorting test work at the Boundary Zone prospect at its Macmillan Pass project in a bid to optimize potential future processing if a mine is developed. The work includes assessing samples, which have been sorted via traditional methods and also modern sensor-based sorting, which is a proven technology deployed at many mines worldwide to upgrade mill-feed at low cost.
Two identical 1.2 tonne samples of drill core were taken from two holes at the Boundary Zone Main for a total of 2.4 tonnes. This will allow the comparison of two streams of test work, using one sample for ore sorting, and the other sample for unsorted flotation and grinding tests, said the company. The ore sorting test work is being conducted by Steinert at their test facility in Germany and will be completed in June 2021.
A few days earlier, on May 14, Fireweed had posted more drill results from Macmillan Pass - this time from a reverse circulation (RC) program at the Tom and Jason deposits. The aim was to assess the potential of RC drilling as a lower-cost alternative to diamond drilling for upgrading resources at shallow depths and the holes were sunk as infill and twin holes at the Tom and Jason deposits. A step-out was also drilled at Tom North.
The step-out at Tom North hit an interval of 8.1 metres (m) true thickness of 5.92% zinc, 0.25% lead, and 1.7 grams per ton (g/t) silver from 88.39m depth. The infill hole at Tom West intersected 8.2m true thickness of 11% zinc, 8.74% lead, and 19.6 g/t silver starting from a depth of 38.10m.
Fireweed's efforts to advance the property got a major boost last year after the Yukon government and the Ross River Dena Council (RRDC) First Nation reached an agreement in principle on a C$71 million plan 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 the financing front, on May 20, Fireweed closed a non-brokered private placement of C$5 million to help advance the Macmillan Pass project. The financing consisted of 6,250,000 shares of the company priced at $0.80 per share with a single strategic investor. Fireweed said the proceeds will be used for general working capital purposes, cash reserves for future development, and exploration and development of Macmillan Pass.
Inflection points:
- Further drilling results
- Expansion of Tom and Jason deposits
- Zinc and lead price moves
What the broker says:
Haywood Securities analyst Pierre Vaillancourt continued to rate the shares a 'Buy', according to a report in The Globe and Mail paper in September 2020.
The analyst cited the firm's growth potential in a "recovering" zinc price environment and raised the target price to C$1.50 from C$1.25 following a recent meeting with the Vancouver-based company. The shares stood then at C$0.85.
In the Eye On Equities column, Vaillancourt was quoted as saying in a note: "Fireweed is in a strong financial position to execute on its plan, we look for drilling results from prospective targets to continue to drive the stock (up three times since March, 2020). We are also encouraged by a government commitment of $71-million to help upgrade the Canol Road to site, which will help to reduce capital costs for infrastructure and improve project economics."
What the boss says:
In May's statement regarding the start of metallurgical and sorting test work at the Boundary Zone prospect, Brandon Macdonald, CEO at Fireweed said: "This is an important step forward in realizing the economic potential of Boundary Zone. This is the first metallurgical test work conducted on Boundary Zone and will complement the metallurgical data we have on our Tom and Jason deposits. The full-scale ore sorting tests will determine if there is potential to increase mill feed grades while simultaneously improving grinding costs."
He added: "The sorting tests on bulk samples using full-scale sorting equipment will be more robust than the bench-scale test work conducted in 2019. Flotation and grinding test work are being carried out on sorted and unsorted material to support both possible processing scenarios. Together, the metallurgical and sorting test work will give Fireweed holistic insight to help optimize the processing flowsheet for the Macmillan Pass project."
Contact the author at jon.hopkins@proactiveinvestors.com