Fireweed raising $9.68 million for Yukon project

Share this article

Fireweed Zinc Ltd. [FWZ-TSXV] said Thursday it has arranged a $9.68 million non-brokered private placement with proceeds earmarked for expansion of the 2022 work program at the company’s Macmillan Pass project in the Canadian Yukon.

The company’s aim is to deliver upcoming resource updates and a preliminary economic assessment without further capital raises.

Fireweed shares eased on the news, falling 2.8% or $0.02 to 70 cents in light trading. The shares are currently trading in a 52-week range of 92 cents and 50 cents.

Located in the eastern edge of the Yukon, 350 kilometres northeast of Whitehorse, Macmillan Pass is thought to be one of the world’s leading undeveloped zinc projects. According to a NI 43-101 technical report, the project hosts an indicated resource in the Tom and Jason zones of 11.21 million tonnes of 9.61% zinc equivalent or 6.59% zinc, 2.48 g/t silver, including 1.63 billion pounds of zinc, 610 million pounds of lead and 7.69 million ounces of silver.

On top of that is an inferred resource of 39.47 million tonnes of 10% of zinc equivalent, including 5.845 zinc, 3.14% lead, 38.15 g/t silver or 5.08 billion pounds of zinc, 2.73 billion pounds of lead and 48.41 million ounces of silver.

A preliminary economic assessment announced in May, 2018, says that material can sustain a mining operation for 18 years, one where average yearly contained metal production would be 85,000 tonnes of zinc, 48,000 tonnes of lead and 2 million ounces of silver.

The total project cost is estimated to be $1.05 billion, including pre-production capital expenditures of $404 million.

Fireweed has been working to demonstrate that Macmillan Pass is truly a district scale project, one that could eventually be a source of feed for a British Columbia smelting complex held by with Teck Resources Ltd. [TECK.A, TECK.B-TSX, TECK-NYSE], the Canadian mining giant.

On Thursday, Fireweed said the offering will consist of 5.7 million common shares priced at 70 cents per share and 5.74 million flow-through common shares priced at 99 cents each through a donation arrangement. The total gross proceeds are expected to be $9.68 million.

Teck has agreed to purchase 4.28 million common shares, subject to certain conditions, including the successful closing of the offering. By doing so, Teck will raise its Fireweed stake to 9.2% from 4.9%.

Ibaera Capital, an Australian mining investment firm will also purchase 3.57 million shares under the same conditions, raising its interest to 11.3% from 8.3%. A third investor, a high net-worth individual, has committed an additional $2.5 million, the company said in a press release.

 


Share this article

Leave a Reply

Your email address will not be published.

Don't miss the

NEWSLETTER

Exclusive editorial

Breaking News

Quality Company Coverage

Expert Writers

You have successfully subscribed to the newsletter

There was an error while trying to send your request. Please try again.

Resource World Magazine will use the information you provide on this form to be in touch with you and to provide updates and marketing.