Fireweed Zinc (FWZ.V) is able to capitalize on a strong resource update on the Tom and Jason claims which are part of the Macmillan Pass as its previously announced C$10M private placement has now been upsized to raise C$12.5M (with an additional option for the agents to exercise a 15% overallotment option). The RCF Opportunities Fund has agreed to purchase 4 million shares of the financing, writing a cheque for in excess of C$4M.
The C$12.5M will be raised by issuing 5.7 million common shares of Fireweed Zinc at C$1.32 per share and up to 3 million flow-through shares at C$1.66. Surprisingly, the private placement consists of a straight share offering without any warrants attached to the deal. That’s a solid move as this will prevent from ‘flippers’ participating in this private placement, and upsizing a C$10M deal to C$12.5M indicates the demand for this warrant-free placement was/is very strong. On top of that, Fireweed’s share price remained very stable despite the turmoil on the general financial markets.
A part of the proceeds will be used to make the C$750,000 payment to HudBay Minerals (HBM.TO, HBM) to secure the 100% ownership of both claims. HudBay will also be entitled to receive 3.57 million shares of Fireweed of which the majority will be released over the next 25 months.
The remainder of the cash will be used to fund the ongoing exploration activities at the MacMillan Pass, which will include a regional exploration program to figure out of there are more (viable) zinc-lead-silver occurrences on the land package whilst completing the first Preliminary Economic Assessment which should be ready for publication in the second quarter of this year.
With this C$12.5M capital raise, Fireweed Zinc appears to be fully funded for 2018 and beyond whilst keeping the total fully diluted share count below 36 million shares even after taking the share issue to HudBay into account.