Fireweed Zinc

Advancing Yukon’s Macmillan Pass Zinc-Lead-Silver Project

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Overview

Fireweed Zinc Ltd. (TSXV:FWZ) is a Vancouver based resource exploration company focused on advancing its Macmillan Pass zinc-lead-silver project located in Canada’s Yukon Territory.

The Macmillan Pass project hosts two large sedimentary exhalative (SEDEX) deposits—Tom and Jason. SEDEX deposits are responsible for more than half of the world’s zinc production and are also an important source of lead. Global examples of this type of deposit include the Howard’s Pass district (eastern Yukon-NWT), Mt Isa-Century in the McArthur River District (Australia), and Red Dog (Alaska).

The Macmillan Pass project is an expansive land package that remains largely underexplored. The strategic location of the project in the zinc-rich Selwyn Basin and its expansive footprint in the region gives Fireweed Zinc confidence in the excellent potential for further SEDEX discoveries.

The company’s 2018 resource estimate was released in January and highlighted an indicated resource of 11.2 million tonnes at 9.6 percent zinc equivalent and an inferred resource of 39.5 million tonnes at 10 percent zinc equivalent. The resource was developed using a historic resource from 2007 and with results from a 2,000-meter drill program with the parallel aim of advancing the project towards a preliminary economic assessment (PEA).

Fireweed Zinc released its PEA for the Macmillan Pass project in May 2018. The PEA outlined an 18-year mine life with 32.7 million tonnes of mineralization being mined at a processing rate of 4,900 tonnes-per-day. The PEA also outlined an after-tax NVP (eight percent) of $448 million and an IRR of 24 percent.

Fireweed Zinc is managed by a seasoned team of mining industry professionals. Executive Chairman John Robins is a professional geologist whose career spans nearly 4 decades. Robins was the Founder and Executive Chairman of Kaminak Gold Corporation which was sold to Goldcorp for $520 million. Robins was the 2008 recipient of the Association for Mineral Exploration British Columbia’s H.H. “Spud” Huestis Award. He sits on the boards of several successful exploration companies. In 2017, Robins’ companies have raised over $100 million.

Company Highlights

  • Option agreements in place to earn 100 percent interests in the Tom & Jason claims and the MAC claims.
  • Located in the mining-friendly jurisdiction of Yukon, Canada.
  • One of the largest and highest-grade zinc-lead-silver projects in the Americas with excellent blue-sky potential on a property that remains largely underexplored.
  • Good infrastructure and property access.
  • Preliminary metallurgy in 2012 demonstrated good recoveries and concentrate grades.
  • 2018 resource estimate highlighted an indicated resource of 11.2 million tonnes at 9.6 percent zinc equivalent and an inferred resource of 39.5 million tonnes at 10 percent zinc equivalent
  • PEA included an after-tax NVP (eight percent) of $448 million, an IRR of 24 percent and an 18 year mine life.
  • Strong share structure with Management holding large block of shares.
  • Good relations with First Nations in a non-treaty area.

Key Project: Macmillan Pass Zinc-Lead-Silver Project, Yukon

Building on a substantial resource with the potential for further discoveries.

The Macmillan Pass zinc-lead-silver project is located approximately 200 kilometers northeast of the community of Ross River in the Selwyn Basin of Yukon, Canada. Hosting 12 large SEDEX-type deposits, the Selwyn Basin is one of the world’s most recognized basins for this type of deposit. Fireweed Zinc’s Macmillan Pass is nearby to Selwyn Chihong Mining’s Selwyn (Howard’s Pass) Project which contains one of the world’s largest undeveloped zinc deposits.

The 21,939-hectare underexplored land package is easily accessible via a 3-kilometer road from the government maintained North Canol Road of the Robert Campbell Highway or via government airstrip within the property boundary. The project also has a camp already in place (installed in 2011) along with permits and water license. Historic drill core is on site.

The Tom deposit was discovered in 1951 by Hudbay Minerals and the Jason deposit was discovered by the Ogilvie JV in 1974. Hudbay acquired the Jason deposit in 2007, combining the two deposits for the first time into one project. Fireweed Zinc signed option to acquire 100-percent of the Tom and Jason claims from Hudbay in December 2016. In August 2017, Fireweed quadrupled the land area of its Macmillan Pass project with the acquisition of the adjoining MAC claims from Newmont Mining. The MAC claims cover the contiguous northwest extension of the same geology and mineralization trends that host the Tom and Jason deposits.

fireweed-regional-context-and-project-overview

2018 Resource Estimate

In January 2018, Fireweed Zinc announced its completed mineral resource estimate for the Macmillan Pass project. The resource included the resource estimate already completed on the Tom and Jason zones on the property. The NSR cutoff grade of $65 was used to calculate the numbers in the table below.

“These new Mineral Resource Estimates for Tom and Jason represent a substantial increase over the previous 2007 Mineral Resource Estimates,” said Fireweed Zinc CEO Brandon Macdonald. “Building on this major milestone, we will now use these Mineral Resource Estimates along with pending new metallurgical test results, toward completion of a Preliminary Economic Assessment in the coming months to assess project economics. Next summer we will execute a larger drill program to expand on these mineral resources and test other targets for new discoveries within our large project area. We have made excellent progress in the short seven months since our IPO and plan an even more aggressive program in 2018 to drive this world-class project forward.”

PEA

In May 2018, Fireweed Zinc announced that they had completed a PEA for the Macmillan Pass project. The following numbers were calculated using a base case $1.21 per pound zinc, $0.98 per pound lead and $16.80 per ounce silver. Highlights include:

  • An 18-year mine life with 32.7 million tons of mineralization mined at 4,900 tonne-per-day processing rate.
  • 54 million tonnes of zinc, 0.88 million tonnes of lead and 37 million tonbes of silver concentrate shipped.
  • Average yearly contained-metal production of 85 kilotons zinc, 48 kilotons lead and 2 million ounces silver.
  • Pre-tax NPV at eight percent of $779 million and IRR of 32 percent.
  • After-tax NPV at eight percent of $448 million and IRR of 24 percent.
  • Payback period of four years.
  • Pre-production CAPEX of $404 million.

The PEA also highlighted numerous opportunities for economic improvements and that there is room for expanding the resource.

“This first NI43-101-compliant PEA on the Macmillan Pass Project represents a significant step for the Company as we progress the Project towards production. Project economics in the PEA demonstrate that Macmillan Pass is not just viable at the zinc, lead and silver prices levels contemplated in the study, but highly robust,” said Fireweed Zinc CEO Brandon Macdonald. “With consideration of the exploration upside not just at the known zones, but also within the broader land package, the Project is steadily shaping up to be a premiere district-scale zinc mining camp in the mining-friendly Yukon Territory.”

Blue Sky Potential on Large Land Package

The Macmillan Pass project represents an excellent opportunity for upside potential. The footprints of the Tom and Jason deposits are quite small compared to the substantial size of the entire land package. Additionally, while approximately 70,000 meters of historical drilling was carried out on the Tom and Jason claim areas since their discovery, a vast majority of the current Macmillan Pass land package (including the newly acquired MAC claims) remains largely unexplored by modern exploration techniques.

Significant potential remains to expand the known mineralization at the Tom and Jason deposits at depth and along trend. Historic exploration activities on the MAC claims were limited to early stage work in the search for gold, however several areas of zinc and lead geochemical anomalies were discovered in stream sediments and soils.

Fireweed Zinc is testing that potential via an exploration campaign aimed at expanding the known mineralization on the Tom and Jason claims. The program also includes aerial and ground reconnaissance over the MAC claims to delineate targets for further exploration. In July 2018, the company began its 10,000-meter drill program aimed at expanding the project’s resource.

Management

Fireweed is managed by a veteran group of mining professionals 

John Robins—Executive Chairman and Director

John Robins is a professional geologist with over 35 years of experience mainly as an independent geologist and entrepreneur. Mr. Robins has been involved in many successful exploration ventures and sat on the Boards of several successful exploration companies. Most recently he was Founder, Executive Chairman & Director of Kaminak Gold Corporation which discovered the Coffee Gold Deposits in Yukon and sold the company to Goldcorp for $520 million. In 2008 Mr. Robins was recognized for his achievements in mining exploration by the Association for Mineral Exploration British Columbia with the H.H. “Spud” Huestis Award. This is recognized as the highest award given for mineral exploration and is awarded to those who have made “a significant contribution to enhance the mineral resources of British Columbia and/or the Yukon Territory, through the original application of prospecting techniques or other geoscience technology.” In 2017 Mr. Robins’ companies (Bluestone Resources, Northern Empire Resources, Fireweed Zinc) have raised over $100 million.

Brandon Macdonald—CEO and Director

Brandon Macdonald is a professional geologist with a diverse experience base including exploration geology worldwide and investment banking. In recent years he has focused his efforts in exploration and development as a principal of and consultant to various junior mining companies. In the past, he was in the City of London where he worked in structuring financings and risk management at Macquarie Bank. In 2007 Mr. Macdonald graduated with an MBA (with Distinction) from Oxford. He completed his B.Sc. in Geology from UBC in 2000. Mr. Macdonald has a long history of mining exploration work in Yukon, including zinc projects, and originally hails from Ross River, near the Macmillan Pass Project site.

George Gorzynski—Executive Vice President and Director

George Gorzynski is co-founder of the Company and a geological engineer with 35 years’ experience in exploration and mining company management. He has strong technical, management and leadership skills, and was a key person in the building and managing of several successful international junior mining and exploration companies. His technical experience ranges from management of large exploration projects in challenging settings to geology field work in isolated locations to oversight of mining operations. Mr. Gorzynski has geological engineering degrees from the University of Toronto (Honours) and University of British Columbia and has worked on a number of zinc projects in British Columbia and Yukon.

Richard Hajdukiewicz—Director

Richard Hajdukiewicz is a co-founder of the Company and has over 35 years’ experience in commodity markets including extensive experience in financing, trading and risk management. He was responsible for the zinc concentrate feeds to Noranda’s zinc smelter at Valleyfield, Quebec as well as marketing of zinc and lead concentrates, in North America. He later headed up and grew Noranda’s global precious metals secondary business which was involved in precious metals concentrates, dore and scrap. During his 25 year plus tenor on Wall Street, Mr. Hajdukiewicz assisted in expanding Goldman Sachs’ metals activities into base metals including zinc and lead. He headed up metals sales and trading activities at several other banks including HSBC and others. He has advised senior managements at many mining and metals companies with the strategic direction of their marketing and risk management strategies for precious and base metals. Mr. Hajdukiewicz graduated from the University of Toronto in Metallurgical Engineering and is currently a consultant to the metals and mining industry.

Gilles DessureauV.P. Exploration

Mr. Dessureau is a Professional Geologist with over 15 years of exploration and development experience in the Western Cordillera including Yukon and British Columbia along with other locations throughout North America including Nevada, Ontario and Quebec. Mr. Dessureau is the Owner/Principle Geologist of Solidus Geological Services and has been providing geological and project management services to a number of clients including Golden Predator Mining Corp., Columbus Gold Corp., Colorado Resources Ltd., BMC Minerals, among others since 2007. Mr. Dessureau was instrumental in advancing the Wolverine polymetallic VMS deposit, located in the Yukon, through pre-feasibility and into commercial production beginning in 2010, and was involved with advancing Golden Predator’s Brewery Creek and 3 Aces deposits. Mr. Dessureau graduated with a Master’s degree from Laurentian University in Sudbury following a Bachelor’s degree in Geology from St. Mary’s University in Halifax. He is a Professional Geologist registered with Engineers and Geoscientists British Columbia (EGBC).

Neil MacRaeInvestor Relation Manager

Mr. MacRae attended the University of Calgary and started his career in 1994, spending 10 years as a commodity trader and concentrate marketer for Mitsui & Co. (Canada) Ltd.  Over the next 14 years, Neil then moved into investor relations roles with such companies as First Majestic, NovaGold Resources, and Santacruz Silver Mining as well as a role at Farallon Mining which operated the Campo Morado Zinc Mine in Mexico which was taken over by Nyrstar in 2011.

Adrian Rothwell—Director & Audit Committee Chair

Adrian Rothwell has worked in the mining industry for over 25 years with extensive experience in oversight and corporate governance roles. He is currently President and Chief Executive Officer of Kore Mining Ltd, a private mining venture with gold projects in the western United States. Most recently, he was the Director, Strategy at Goldcorp Inc., and previously acted as Chief Financial Officer for many companies listed on the TSX Venture Exchange. Mr. Rothwell is a Chartered Professional Accountant (CPA, CA) in British Columbia and a designated Chartered Accountant in Australia & New Zealand. He articled at PricewaterhouseCoopers LLP in Australia and Canada and holds a BA in Economics from Macquarie University.

Dan Rogness—Director

Dan Rogness has worked in the mining industry for over 25 years and is experienced in treasury, finance, financial reporting, corporate development, forecasting, cash management, hedging and foreign exchange. Dan is currently consulting for various mining companies and was the Assistant Treasurer and officer at Teck Resources (formerly Teck Corporation and Teck Cominco Ltd.) from 1985-2012. Mr. Rogness is a Chartered Professional Accountant (CPA, CA) in British Columbia and holds a B. Com (Honours) in Accounting and Management Information Systems.

Han-Ying (Jessie) Lin—Chief Financial Officer

Jessie Lin has over ten years of professional experience in the areas of accounting, financial and regulatory reporting mainly in the mining industry. She earned her CGA designation in 2011 and has a Bachelor of Applied Science degree with a Minor in Commerce from the University of British Columbia.

Jeffrey Dare—Corporate Secretary

Jeffrey Dare has over nine years of professional experience with respect to managing external reporting and corporate compliance for TSX Venture Exchange listed issuers. He currently serves as the Corporate Secretary and advisor for a number of junior companies. Mr. Dare works closely with external partners and service providers in the areas of legal, compliance, transfer agency, audit, banking and insurance. Mr. Dare holds a BA from Simon Fraser University.


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