VANCOUVER (miningweekly.com) – Vancouver-based explorer Fireweed Zinc has reported strong economic indicators for its Macmillan Pass project, in Canada’s Yukon Territory, sending its TSX-V-listed stock up 6% on Thursday to open at a 52-week high, before closing down 11% by market close.
Based on metal price assumptions of $1.21/lb of zinc, $0.98/lb of lead and $16.80/oz of silver, the maiden preliminary economic assessment (PEA) on the project calculated a pre-tax net present value (NPV), applying an 8% discount rate, of C$779-million, and an internal rate of return (IRR) of 32%.
On an after-tax basis, the NPV comes to C$448-million, with an IRR of 24%.
“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,” commented CEO Brandon Macdonald.
The PEA outlined an 18-year mine life, producing 1.54-million tonnes of zinc, 880 000 t of lead, and 37-million ounces of silver in concentrate shipped.
Over the life of the project, the operation will mine 32.7-million tonnes of ore, to be processed through a 4 900 t/d mill.
Average yearly contained-metal output is estimated at 85 000 t zinc, 48 000 t lead and two-million ounces of silver.
The preproduction capital comes to C$404-million, with an estimated payback period of four years, the company said.
Management pointed out that several opportunities exist to significantly improve the project economics and that known zones remain open for expansion, including into high-grade areas. The project is located on a prospective and large land package, which was previously untested with modern exploration methods.