Macmillan Pass Project

Option Agreement

The terms of the Option Agreement (the “Option”) with Hudbay allow Fireweed to acquire a 100% interest in the Project as follows:

  • Two year term, with the ability for Fireweed to exercise the Option at its discretion to acquire 100% of the Project any time after December 14, 2017.
  • Fireweed must make payments totaling $1,000,000 to Hudbay as follows: (i) $100,000 upon signing of the Option (paid); (ii) $150,000 upon completion of Fireweed’s IPO (paid); and (iii) $750,000 on exercise of the Option.
  • Fireweed must incur aggregate exploration expenditures of at least $1,000,000, of which at least $250,000 must be incurred during the first 12 months following the date of the Option.
  • Upon exercise of the Option, Fireweed must issue to Hudbay shares of the Company equal to 15% of Fireweed’s then issued and outstanding shares on a fully diluted basis, but excluding shares issued for acquisitions outside of the Tom and Jason deposits.

The Jason claims have an underlying 3% net smelter royalty which can be bought out for $5.25 million. There are no underlying royalties on the Tom claims.