Fireweed prepares for PEA at Tom and Jason

VANCOUVER — Shares of Fireweed Zinc (TSXV: FWZ) have been on a run — rising 58% to an all-time high of $1.06 at press time — ever since the company began announcing drill results from its 219 sq. km Macmillan Pass zinc-lead-silver property, 200 km northeast of the community of Ross River in southeastern Yukon.

The 2,200-metre drill program targeted the project’s historic Tom and Jason zinc-lead-silver deposits, with the goal of modernizing their combined historical resource of 6.4 million indicated tonnes of 6.3% zinc, 5.1% lead, 56.6 grams silver per tonne and 24.5 million inferred tonnes of 6.7% zinc, 3.5% lead and 33.9 grams silver.

A new resource calculation, which the company expects to publish in January, will lead to a preliminary economic assessment (PEA) to be released in March.

Fireweed Zinc’s exploration camp at the Macmillan Pass project. Photo by Robert Cameron.

“The market thinks we’re just confirming a resource, but we’re not,” Fireweed CEO Brandon Macdonald tells The Northern Miner during a phone interview. “We’ve added 25 holes between us and the former operators. Some of these holes are stepouts, which will add additional tonnes, whereas the infill holes should upgrade the categories. So we’re confident we’ll see a material change in the resource.”

Fireweed’s final batch of drill results, released on Dec. 5, highlighted the widest intercept of high-grade mineralization of the program at the Tom East zone, noted as 38 metres (true width) of 8.7% zinc, 7.6% lead and 129 grams silver in hole 17-7.

Meanwhile at Tom West, hole 17-6 was drilled 100 metres below the historic resource and intersected a section of 5.3% zinc and 0.7% lead over 28.5 true-width metres.

Location and claim map of Fireweed Zinc’s Macmillan Pass zinc-lead-silver property in southeastern Yukon. Credit: Fireweed Zinc.

Fireweed Zinc’s Macmillan Pass zinc-lead-silver property in southeastern Yukon. Credit: Fireweed Zinc.

Macdonald says the recent drilling has shown the project’s upside potential.

“We’ve had some fantastic intersections, hole 7 definitely being one of them,” Macdonald says. “Tom East isn’t that big but it’s high-grade, so we were surprised to hit two-and-a-half times the expected width. The previous model had Tom East as this narrowing kink in the resource, but now it’s apparent that it’s actually thickening.”

Tom and Jason are two of many sedimentary exhalative (sedex) zinc-lead deposits that follow a northwest-trending package of prospective rocks across Western Canada.

Other sedex deposits along trend include Teck Resources’ (TSX: TECK.B; NYSE: TECK) world-class Sullivan deposit in B.C., which produced 17 million tonnes zinc and lead and 285 million oz. silver — valued at $20 billion — over its century-long mine life, and Selwyn Chihong Mining’s undeveloped Howards Pass project in the Yukon, where resources amount to 145 million tonnes of 5.5% zinc and 2.1% lead, with another 220 million tonnes of potential.

Sedex deposits form when metal-rich, deep basinal brines seep through permeable sediments in a basin or exhale out directly onto the basin floor through a network of faults.

Layers of zinc and lead mineralization are visible in drill core from the Tom West zone at Fireweed Zinc’s Macmillan Pass property in the Yukon. Credit: Fireweed Zinc.

“The term sedex was coined in a master’s thesis written on the Tom deposit,” Macdonald says, noting that Tom and Jason were discovered in 1951 and 1974. “The last time these projects were busy was 1991. Cominco was operating the Tom, whereas Phelps Dodge was operating Jason. Both were doing great but then the bottom fell out of the market in 1992, and the companies abandoned the projects. Hudbay Minerals consolidated the two projects in 2007 but they only did modest work — it wasn’t a priority for them. They liked the project but they knew they would never get around to it, which is why we stepped in.”

Before November, Fireweed’s share performance was on a steady decline, falling from 84¢ to 67¢ since the company’s inception in June. Macdonald pointed to reasons such as poor marketing and a “lack of strong shareholders” in the company’s initial public offering (IPO).

“This recent uptick in share direction is really about the weakest of the IPO holders finally running out of paper, in combination with presenting our information at the Metals Investor and Yukon Geoscience forums. People are finally dawning on our project’s value proposition, and as soon as you’re trending up, all of the buyers come out of the woodwork,” he says.

The upcoming new resource estimate and PEA should “crystallize some additional value” in the company’s stock, he says.

One challenge for Fireweed’s Macmillan Pass project is access. The property is 3 km from the Yukon’s historical North Canol Road — a heritage trail built during World War II to make way for an oil pipeline from Norman Wells in the Northwest Territories to Whitehorse.

The trail leading from Ross River to Fireweed’s project area is frequently graded by the Yukon government, but Macdonald says that maintenance in recent years has fallen to the wayside due to lack of use.

“People put a huge emphasis on logistics, and they’re not wrong to do that — that’s the chief challenge of the project — but it’s highly overstated. It’s an erosion of margin, but this is a large project of scale with very high grades,” he says, noting that the Yukon government has recently affirmed its commitment to increase access into the area. “Without a PEA you can’t fight those criticisms, so I’m really looking forward to getting our numbers down — the naysayers will have the winds sucked out of their sails when we show them the project actually does work. We’re confident it will look good.”