Over Six Times Your Money In Zinc?

Yes, gold and gold stocks are taking off just as we predicted. But zinc has been rocketing higher for two years.

So how do you play zinc? Well, Gold Newsletter’s top zinc recommendation — Fireweed Zinc (FWZ.V; FWEDF.OB) — has released a stunning new resource estimate.

Simply put, it shows the company could soar over six times in value just to equal the valuations of its better-known peers.

By Brien Lundin

Dear John,

I couldn’t imagine better timing for a hot new zinc play.

You see, I’ve always maintained that you can’t have a base-metals bull market without a gold bull market already in progress. Investors just don’t get excited over copper, zinc or molybdenum unless they’re already looking at gold, silver and mining stocks.

But consider these facts:

• Zinc prices have been rising strongly for over two years — multiplying over 2.3 times in price so far.

• There just aren’t many junior zinc companies out there to capitalize on this trend.

• But now it looks like the big gains are about to kick in for zinc plays — because gold, silver and junior mining stocks are now taking off...investors are looking at exciting opportunities in base metals too...

• ...And our top zinc recommendation has just released stunning numbers showing it could soar over six times in value.

Too good to be true? Not at all. And you’ll agree once you see these numbers...

A Remarkable Zinc Resource

With zinc prices on the rise earlier this year, I had been looking for a well-positioned zinc explorer to recommend to my Gold Newsletter readers.

I finally found a prime candidate — Fireweed Zinc (FWZ.V; FWEDF.OB) — and recommended the company in last July.

It’s already gained about 53% since then. So naturally I’m glad that Gold Newsletter readers were able to get the jump on this exciting play.

But don’t feel you’ve missed this opportunity by any means. Because the company has put out news indicating that even greater gains could lie just ahead.

The excitement for Fireweed revolves around its Macmillan Pass zinc-lead project in the Yukon. There was already a sizeable zinc resource on this project, but it had been delineated by a number of previous operators over the years, therefore it was hard to vouch for the numbers.

So Fireweed decided to take a conservative approach: It labeled the resource as “historical,” and set about drilling the project itself to validate and hopefully expand the previous results.

Just a few days ago, they announced the results of this program with a new, NI-43-101-compliant resource estimate for the combined Tom and Jason targets at Macmillan Pass.

And the numbers were quite remarkable.

The project’s indicated resource spiked from 6.42 million tonnes of 6.33% zinc, 5.05% lead and 56.55 g/t silver to 11.2 million tonnes of 6.59% zinc, 2.48% lead and 21.33 g/t silver.

The new tonnage estimate equates to 1.63 billion pounds of zinc, 610 million pounds of lead and 7.69 million ounces of silver.

The inferred resource for the two deposits grew markedly as well, jumping from 24.5 million tonnes of 6.71% zinc, 3.48% lead and 33.86 g/t silver to 39.5 million tonnes of 5.84% zinc, 3.14% lead and 38.15 g/t silver.

That equates to 5.08 billion pounds of zinc, 2.73 billion pounds of lead and 48.4 million ounces of silver.

Putting It In Perspective

Many investors — myself included — can get confused with relative valuations of base-metal and/or multi-metallic projects. We’re much more accustomed to valuing gold and silver projects.

So what do all these numbers for Fireweed’s zinc project mean?

Simply put, it means Fireweed is dramatically undervalued based “only” on the current resource it’s drilled off.

Consider this: There are other advanced zinc explorers with smaller zinc-equivalent resources, at lower zinc-equivalent grades, with valuations many times greater than Fireweed (based on enterprise value per zinc-equivalent pound of resource).

I’m looking at a spreadsheet right now showing that, based on zinc-equivalent resources, another junior zinc company is valued 6.67 times greater than Fireweed.

Believe it or not, some others are valued even higher than that.

Bottom line: Fireweed could multiply in price if it merely catches up to the valuations of other companies in its peer group.

But it could get even better. With large areas of untested ground (and plans for another drilling program this summer), Fireweed’s resource seems destined to grow even larger.

First though, Fireweed will combine the new resource estimate with metallurgical work to produce a preliminary economic assessment on the project, a study that should come out sometime in the first half of 2018. This should be yet another value trigger.

Then will come more drilling — yet another catalyst for higher valuations.

And as the company continues to take each de-risking step along the exploration/development timeline, its valuation curve should continue to rise.

In short, this is a massive deposit by any measure, and one that’s hitting the market’s radar as the world is scrounging for large new supplies of zinc. Given the large and growing resource Macmillan Pass boasts, and the prospects for zinc in particular, it seems only a matter of time before Fireweed makes a tempting takeout target for some major down the line.

The stock is up about 7% since the resource announcement. But Fireweed looks likely to continue its gains as the significance of this development gains a broader appreciation.

That’s why I’m continuing to recommend it in Gold Newsletter. And it’s why Golden Opportunities readers should consider it as well.

All the best,

Brien Lundin
Editor, Gold Newsletter
CEO, the New Orleans Investment Conference

CLICK HERE
To Read Fireweed Zinc’s
Resource Estimate News Release