Vancouver, British Columbia: FIREWEED ZINC LTD. (“Fireweed” or the “Company”) (TSXV: FWZ) is pleased to provide a year-end review of its 2018 results and work program on the Macmillan Pass Zinc Project in Yukon, Canada.
Highlights for 2018*
• In January 2018, Fireweed published new expanded Mineral Resources making it the largest undeveloped zinc and lead resource in the world held by a junior company with 11.2 Mt at 9.6% ZnEq Indicated plus 39.5 Mt at 10.0% ZnEq Inferred for the combined Tom and Jason deposits.
• In May, Fireweed published a Preliminary Economic Assessment with robust economics including an after-tax NPV (8%) of C$448M and IRR of 24%.
• Drilling in 2018 confirmed and expanded on historic drill results with a number of holes intersecting notably higher grades than projected from historic data. Highlights include drill hole TS18-005 which intersected 12.61% Zinc, 16.40% Lead and 221 g/t Silver over a true width of 12.73 metres. Other wide, high-grade intersections are compiled in the tables below.
• Extensive geophysical ground gravity and passive seismic surveys, geochemical sampling and geological mapping were carried out to identify additional high priority targets for exploration. Results and exploration targets outlined will be released when interpretation work is complete. The identified high priority targets will be included in planning for the 2019 summer drill campaign.
• In early 2018, Fireweed exercised its option and became 100% owner of the Tom and Jason claims and associated deposits and assets.
• Later in 2018, Fireweed consolidated the Macmillan Pass Zinc District with the purchase and options on several blocks of adjacent claims expanding its land position from 219 square kilometres to 544 square kilometres (210 square miles).
• In early 2018, Fireweed closed a $12.5 million financing.
* See 2018 Fireweed news releases for details and background information.
After reviewing these year-end results, Fireweed CEO Brandon Macdonald stated “It has been another busy year of great accomplishments for Fireweed. In January we published new Mineral Resources which establish Tom and Jason as the largest undeveloped zinc and lead resource in the world held by a junior company. In May we published the results of a PEA study which show the project to have robust economics. These were followed by another successful season of drilling which returned many wide intersections of high-grade mineralization at Tom West and Tom East. We also drilled our first holes on the historic End Zone which returned impressive intersections not yet included in the Mineral Resource. Beyond the technical work, we consolidated the Macmillan Pass Zinc District with the acquisition of additional claim blocks which more than doubled our land position to 544 square kilometres. This expansion included the purchase of the Nidd claims with which Fireweed now owns all four known large zinc systems in the district. Plans for another active season in 2019 will be finalized after we complete the compilation and interpretation of the results from the 2018 program.
I want to personally thank our dedicated and hard-working team for all their great work in 2018 and thank our First Nations partners for their support, guidance and valuable contributions. We all look forward to another year of major accomplishments in 2019.”
2018 Mineral Resources Report
Based on the 2017 drill results along with the historic core re-sampling results and compilation of historic data, the Company announced new NI43-101 compliant mineral resources in January 2018 which were substantially larger than historically reported resources. The base case resources were:
Table 1: Base Case Mineral Resource Estimate (at NSR cutoff grade of $65 CAD)
Tonnes (Mt) ZnEq % Zn % Pb % Ag g/t B lbs Zn B lbs Pb MOz Ag
Indicated 11.21 9.61 6.59 2.48 21.33 1.63 0.61 7.69
Inferred 39.47 10.00 5.84 3.14 38.15 5.08 2.73 48.41
Details and supporting information are provided in the NI43-101 Technical Report posted on www.sedar.com and in the Company’s news release, both dated January 10, 2018.
Preliminary Economic Assessment Report
On May 23, 2018, the Company announced the positive results of an independent NI43-101-compliant Preliminary Economic Assessment (“PEA”) for the Tom and Jason deposits prepared by JDS Energy and Mining, Inc. (JDS) with work on tailings and water by Knight Piesold Consulting, both of Vancouver, Canada, utilizing the 2018 mineral resources above.
Production and Economic Highlights:
• Long mine life and large-scale production:
o 18-year mine life with 32.7 Mt of mineralization mined at 4,900 tonne-per-day average processing rate.
o 1.54 Mt of Zinc, 0.88 Mt of Lead, and 37 Moz of Silver in concentrate shipped.
o Average yearly contained-metal production of 85 kt Zinc, 48 kt Lead and 2 Moz Silver.
• Robust economics using metals prices of $1.21/lb Zn, $0.98/lb Pb, and $16.80/oz Ag:
o Pre-Tax NPV at 8% of $779M CAD and IRR of 32%.
o After-Tax NPV at 8% of $448M CAD and IRR of 24%.
• Manageable CAPEX and rapid payback:
o Pre-production CAPEX of $404M CAD. (including $105M CAD allocated to the Canol Road / Yukon Highway 6 road upgrade)
o Payback period of 4 years.
o Starter-pits on Tom West and Jason Main zones reduce up-front capital.
• Significant Upside
o Numerous opportunities for significant economic improvement.
o Known zones remain open for expansion, including into high-grade areas.
o Highly prospective and large land package untested with modern exploration methods.
Details and supporting information are provided in the NI43-101 compliant PEA Technical Report dated July 6, 2018 (effective date May 23, 2018) posted on www.sedar.com and in the Company’s news release dated May 23, 2018.
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