Q: I entered a small position in Fireweed Metals after talking to someone who worked on the Mactung Project drill program, he claimed some staff were very optimistic based on the size/quality of the Tungsten deposit. Doing some research I see both Canadian and American governments have provided funding, the Lundin group has increased their ownership, up to 20% of outstanding shares if I'm not mistaken, and Tungsten has been called the #1 critical mineral by more than one source online, apperantly China has 80% of worlds production and is limiting exports. All seem to be positive developments here, share price is reacting accordingly, in your experience with past " everything looks really good" in a juniour non producing mining company, will the stock continue to rise?
5i Research Answer:
If the commodity continues to be strong, FWZ should be fine but it remains high risk and speculative. It is pre-revenue and tends to burn $40 to $50 mln in operating cash flows annually, so is reliant on financing for the foreseeable future. The company did just close a $61 mln private placement in April, so they should have sufficient funds for a bit of time here regardless.