Fireweed Zinc’s CEO Brandon Macdonald tweeted something last week (shown below) that prompted me to think of some of the old Teck reports relating to the Boundary Zone as well as Fireweed's current corporate presentation. I dug through some documents and wanted to share where I see the Boundary drilling going in 2020.
In the 2012 report, I recalled reading that there are barite soil anomalies to the west of the interpreted zinc anomalies in the below picture. I think that is easy to see the orange and red dots in the bottom left of the two pictures in the below images. These represent the barite and are especially notable in the image on the right. This barite anomaly has never been drill tested, nor for that matter has a purple outlined lead-silver anomaly uphill (north) of the barite anomaly. The zinc anomaly is the orange outline on the right of each image.
I’ve attached another image showing FWZ’s additional soil sampling since that time with respect to the barite. This is page 19 of the current corporate presentation which I will reference again later on. The barite anomaly is still the same as the 2012 report indicated. I felt seeing the grid approach might be interesting to see for some who are newer to this, so I included the below image.
This is probably a good time to provide a caveat about soil samples. Taken on their own, soil samples don’t prove anything. I’ve learned that numerous times but as Brandon noted to me again this week “It's a complex art targeting these things. You have ice movement, acid migration of metals, plain old downhill dispersion, etc etc. Directly targeting a soil anomaly may yield nothing.” Ultimately, you need the drills to turn to prove anything.
Now, of interest, in that same report, Teck noted that the zinc anomaly lies south of most historic drill holes drilled to that time. Teck noted that the 2012 soil data suggested a sulfide source located directly below the geochemical anomaly, which remained poorly tested by drilling. Skip forward to 2019. Fireweed drilled two holes into that Zn anomaly. NB19-002 returned an estimated true width of 230m of 4.14% Zinc with an interval that is 100m of 7.94% Zinc. NB19-001 returned an estimated true width of 230m of 3.44% Zinc with an interval that is 97m of 5.63% Zinc. It looks like the Zinc anomaly was pretty reliable in this case.
Note that in the next image, the 2019 holes are represented by the purple line in the left centre of Fireweed’s interpreted Boundary Zone. Please note that the barite anomaly would be on the other side of the very thin creek running north-south. The barite anomaly would be approximately where the words “Boundary Zone” appear.
So how do we relate this to what Brandon is saying in his tweet? Let’s go back to the 2019 barite anomaly image (two images above). Fireweed asked if the Barite anomaly to the west of Boundary Zone could be the barite cap to the vein system.
What is a barite cap and why do we care? There are two things to consider, one is physical and one is chemical.
Physical - as the fluids migrate up, they hit the barite horizon. Barite is going to be very fine grained and impermeable, so it traps the fluids there in place, acting as a “cap.”
Chemical – The zinc (+ lead and silver) fluids will react with the barite, which is Barium Sulfate (BaSO4), scavenge the Sulfur and produce ZnS (Sphalerite) and PbS (Galena).
So that is the opportunity with 2020 drilling. Fireweed should migrate west and south towards the barite anomaly. Brandon has noted that Red Dog is an analogue that they’ve used in looking at the recent Boundary Zone core and geological setting. So I will close with an image of Red Dog to see what he means. IMPORTANT: No one is saying that Fireweed has a Red Dog on their hands. They are simply saying they see similarities in the geological setting. Fireweed has to drill Boundary further.
In the above image, you can see the barite ore (orange) acting as a cap which kept the sulfides beneath it except to the left side of the image where they made it to surface. If the analogue is true, did Fireweed intercept a similar section in 2019 (as the red section in the above image) as it comes to surface? Will they continue to intersect very good mineralization as they head towards the barite soil anomaly? That is the question. The drill plan should allow for sufficient metres in 2020 to gain a reasonable understanding of what lies to the west in Boundary's setting.
Disclosure is that I am a shareholder of Fireweed who has spent a decent amount of time reading old Teck-Cominco reports and current Fireweed reports about Boundary. I just felt I would share what I have found. I don't think I have my full position so it's not like I am trying to push this higher now to sell some shares.
I don't expect the share price to increase that much in the next couple months - this could be dead money for a little bit of time. I really like the potential trade-off of upside to downside here though. There are many reasons zinc stocks would or could have drifted in recent weeks but Fireweed stubbornly stays in the mid $0.60s for the most part. You can watch the trading but there are not many people hitting bids in the low $0.60s and certainly not in any size. Volume has dried up. Keep in mind that Fireweed will have to raise money in the coming months to fund the 2020 drilling and that there are no upcoming catalysts until the summer exploration season. I think it is a good time to start to begin to position one’s self for the 2020 summer drill season once we get more certainty on the eventual financing. I hope to see the majority as flow through financing when the financing comes as there is a virtual certainty to put the money into the ground. Fireweed has 37.7m shares outstanding with a fully diluted count of 44.8m shares. They have a very low count for a company with some interesting assets at Macmillan Pass. I have not even mentioned the Tom & Jason deposits but those are well documented elsewhere and not my point today.
I wrote an article last fall where I asked if the bottom was in on the stock in the mid 40s and suggested one could consider buying dips. It seems that was correct in hindsight. I feel like the 60 cent range is the new bottom for the most part for now.