Fireweed Zinc Ltd (TSX-V:FWZ) has announced a non-brokered private placement for gross proceeds of up to C$ $9.68 million, which includes lead orders by strategic investors Teck Resources Limited and Ibaera Capital.
The compa\ny noted that Teck's participation in the offering will increase its interest in the company from 4.9% to approximately 9.2%, while Ibaera's participation will increase its interest in the company from 8.3% to approximately 11.3%, and a third investor, a High-Net Worth individual, has committed an additional $2.5million.
The company said the offering will provide it with capital to expand the 2022 work program on the Macmillan Pass Project, Yukon, Canada, and deliver upcoming resource updates and a Preliminary Economic Assessment without further capital raises
In a statement, Fireweed CEO Brandon Macdonald commented: "I am delighted with the investments by existing major shareholders Teck and Ibaera in Fireweed and our Macmillan Pass Project. This is a strong vote of confidence in the merits of the project from one of the world's pre-eminent zinc miners and a technically savvy investment group. This additional financing will enable us to carry out the largest drill program on the property in the history of the Company and carry us through to a game-changing resource update and PEA."
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The offering will consist of a total of 5,714,287 common shares of the company at a price of CAD$0.70 per share and 5,737,373 flow-through common shares at a price of C$0.99 per share through a donation arrangement (Charity Flow-Through Shares) for total gross proceeds of CD$ $9,680,000.
Teck has agreed to purchase 4,285,714 common shares, subject to certain conditions including the successful closing of the offering. Ibaera has agreed to purchase 3,571,429 common shares, subject to certain conditions including the successful closing of the offering. The offering also includes a large individual US shareholder who is significantly increasing his position.
The proceeds from the offering will be used for exploration and development of the Ccmpany's Macmillan Pass Project in Yukon, Canada, and for general working capital purposes.
The gross proceeds from the issuance of all Flow-Through Shares will be used to incur Canadian Exploration Expenses (CEE) and will qualify as "flow-through mining expenditures" under the Income Tax Act (Canada), which will be renounced to the purchasers of Flow-Through Shares with an effective date no later than December 31, 2022, in an aggregate amount no less than the proceeds raised from the issue of the Flow-Through Shares.
Closing of the offering is subject to certain customary conditions, including, but not limited to, the receipt of all necessary regulatory approvals and acceptance of the TSX Venture Exchange.
All securities issued under the offering will be subject to a statutory hold period of four months plus a day following the date of closing.
Fireweed Zinc is advancing its 100% owned, district-scale 940 km2 Macmillan Pass Project in Yukon, Canada, which is host to the Tom and Jason zinc-lead-silver deposits with current Mineral Resources and a PEA economic study as well as the Boundary Zone, Boundary Zone West, Tom North Zone and End Zone which have significant zinc-lead-silver mineralization drilled but not yet classified as mineral resources.
The project also includes large blocks of adjacent claims (MAC, MC, MP, Jerry, BR, NS, Oro, Sol, Ben, and Stump) which cover exploration targets in the district where previous and recent work identified zinc, lead and silver prospects, and geophysical and geochemical anomalies in prospective host geology.
Contact the author at jon.hopkins@proactiveinvestors.com