Fireweed Zinc’s John Robins on ‘deal of the century’ in the Yukon
John Robins is the executive chairman and a director at Fireweed Zinc (TSXV: FWZ), which is advancing its massive zinc-lead project in the Yukon.
Robins was the founder, executive chairman and director of Kaminak Gold, which discovered the Coffee gold deposit in the Yukon, and sold the company in 2016 to Goldcorp for $520 million. Robins took time out during a trip to Dawson City to speak with The Northern Miner during a recent week-long tour of the Yukon, sponsored by the Yukon Mining Alliance and the Yukon Government.
The Northern Miner: The Yukon clearly has a special place in your heart.
John Robins: It’s such an amazing part of the world, especially Dawson. You can’t leave Dawson without having a bit of gold fever, right? There’s so much history, and all those placer tailings as you come out from the airport. My great [maternal] grandfather was here in the Klondike, and I walk down the street and I’m always thinking that he walked down the same street 100 years ago. How cool is that?
TNM: You’ve had a lot of success here.
JR: Yeah, I’ve been coming here off and on for 30 years. Yukon has been kind of a frustrating jurisdiction for a lot of geologists until just recently. There would be a bit of a boom and then things would be quiet for five or six years, and then there would be a bit of an exploration boom, but we kind of lacked that sort of main catalyst, like a big discovery, and Underworld was kind of the first one, and although they don’t have an economic resource there, when they got bought out by Kinross, it was a big wake-up call. Right at the same time, we started working here at Kaminak, and we made the Coffee discovery, and, honestly, I’m kind of proud of it, because it was really the Coffee discovery that really reignited the Yukon.
TNM: Yes, and you sold it at such a great price.
TNM: Tell us about some of your adventures here in the Yukon. JR: I love doing adventure trips, and I did a trip a few years ago with a couple of friends, and we snowmobiled from Yellowknife all the way to our project in Nunavut, Kivalliq, which was about an 1,100 km trip, in the middle of winter, like minus 60. That was an amazing experience. That part of the trip took 12 days. We were on snowmobiles. It takes time because you’re packing a thousand pounds of gear because you have to carry all your fuel with you, but it was a great adventure and fascinating, because you’re retracing a lot of pretty amazing historical routes, that Samuel Hearne did, like all kinds of northern explorers, even Franklin, because he did a lot of overland work before he did that ill-fated trip on his ship.
TNM: You also did another trip on the North Canol Trail and coincidentally came across Fireweed’s Tom and Jason deposits.
JR: That was three winters ago. There were two megaprojects in the Second World War that the Americans undertook in North America: The Alaska Highway, and a lesser-known but equally challenging one was building a pipeline from Norman Wells in the Northwest Territories to Alaska because of the perceived threat of invasion. There were no roads into Alaska or the Yukon, and there was no fuel. The Prudhoe Bay oil field hadn’t been discovered yet. There was no domestic source of oil. So there was an existing deposit in Norman Wells that Esso had, so they decided to build this pipeline across the Mackenzie Mountains and all the way along under extreme conditions, minus 70, minus 80, in the winter, and so, to this day, the Canol road is still drivable to the Northwest Territories border, where Macmillan Pass is, where our Fireweed deposits are, and then after that the bridges have been taken out, and after that it’s kind of bushwhacking. So myself and two friends, we snowmobiled from Ross River to Macmillan Pass, which was fairly uneventful, but once we got into the Northwest Territories the snow conditions were horrific, and it became pretty clear after four or five days we weren’t going to have enough fuel, and we were going to run out of time. As a back-up plan, we had brought our backcountry skis — because I’m a backcountry skier — so our plan was to base ourselves at Mac Pass, and ski a number of those slopes, and if you recall, they are perfect slopes for skiing. So the whole time I’m thinking, this is pretty cool because I know the Tom and Jason deposits are around here somewhere, but I don’t know where, because I had never been there before. And less than a year later we’re negotiating to buy Tom and Jason, and now we have it. It’s kind of funny, it’s one of those weird coincidences.
TNM: What is it that you love about Fireweed’s project?
JR: What I really like about the opportunity when it came up was, you know, I’m going to turn 60 this year, and you kind of realize that the average time frame from discovery to production is about 20 years, and if you can do something to sidestep a big part of that timeframe, all the better. A project like Mac Pass in today’s dollars probably has had in excess of $100 million spent on it. So a lot of the early de-risking has already been taken care of, so you circumvent a lot of that time to get it into production, and that’s what really attracted me to it, and, of course, the price we got it for was extremely attractive, too.
TNM: On the site visit you noted that sometimes majors make dumb decisions.
JR: Well, you always have to be respectful — you don’t know exactly what was going on within the mindset of HudBay. But they discovered it in 1952 and held on to it for all these years. And then just basically sold it for a song. It does lead you to wonder. Sometimes these big companies just do really crazy things. But those are how the greatest opportunities present themselves.
TNM: Why didn’t HudBay try to do more there?
JR: It’s hard to say. You lose the continuity from the people that probably were originally on the project, and then it’s just something in the Yukon that cost them a quarter of a million dollars a year for environmental monitoring, and it’s like, “Why do we even have this, we should just sell it.”
TNM: How does Fireweed Zinc rank in your career in terms of your level of excitement?
JR: Really high on the list. There’s no question what we have at Mac Pass ranks up there as one of the world’s largest undeveloped leadzinc deposits. It’s got high-grade, and you need grade up here. The one thing the Yukon has is infrastructure challenges, but as you saw, there is a Yukon-designated highway right to site, although not a highway by southern standards, it’s still a public road, and you’ve got an asset that, even if you didn’t discover one more pound of zinc, you’ve got a viable project. Our preliminary economic assessment showed a really robust payback, a really good internal rate of return, and, most importantly, actually a very modest initial capital. But it’s the exploration upside I like. Because we’ve been able to galvanize the entire district. The idea that you could double the 50 million tonnes that we have right now, I think, is a completely realistic target, and this year we’re adding on to the resources at Tom, with some of the drilling at Jason. But we’re also drill testing a number of the gravity targets we identified last year, and any one of those could yield another Tom or Jason. Because the one thing that’s challenging when someone else has made the discovery [is that] you lack the sizzle of a discovery … the sex appeal of a new discovery. We didn’t have the benefit of that.
TNM: True, but you sure got a good deal.
JR: If you looked at it in today’s dollars, it’s probably well in excess of $100 million. And we got it for a million. They own roughly 10% of the company. Honestly, in the Yukon, it’s the deal of the century. It really is.
TNM: What would you say are the things the Yukon must do to get mine development rolling here? What are some of the advantages and disadvantages of investing here?
JR: Well, I guess I’ll start off by praising the Yukon’s benefits. In terms of jurisdictions in Canada, it’s absolutely for me, my favourite place. I think Quebec is right up there, too, but I don’t have the experience. One of our companies is working in Quebec.
TNM: Which one?
JR: Genesis. But for me, nothing beats the Yukon. Right here at the Yukon Mining Alliance, to have this level of support from the government, it’s unprecedented. I can pick up the phone any day of the week and phone the premier, and I know he’ll take my call. I can phone probably any minister and know they’re going to return my call. I’m not going to get that in British Columbia or Ontario. There is no other jurisdiction that bends over backwards like this because mining is absolutely part of the DNA of the Yukon.
TNM: Yes and no, though — Victoria Gold is the only company that is on the brink of commercial production.
JR: Yes, but the history, I mean. You can’t avoid the history of what made this territory what it is. So those are the good things. On the other side, the challenges — like any jurisdiction in Canada — the threat is what I call “regulatory creep.” This need for government to just continually make things a little bit more complicated every year, throw in these roadblocks. At the end of the day, one of the great things about being in a jurisdiction like Canada, and more particularly the Yukon, [is that] unless you’ve got a fatal flaw, an environmental fatal flaw, you’re going to get your project developed. What you don’t know is the timeframe to do it. And it’s that regulatory creep that is the ever-present threat to us. I remember one time I gave a talk at GeoScience in Yellowknife, and I have done a lot of my work in Nunavut, and I just saw this bureaucratic creep going at an exponential rate in Nunavut. I was going to give a talk on one of our projects we had there, and I completely threw that in the wastepaper bin because I knew that at least 50% of the people in the room were regulators, and I said, ‘You know what you have to realize is that there are no more portable dollars than exploration dollars.’ I started off working in British Columbia and 100% of my exploration dollars were in British Columbia. We had an NDP government come in and we left. And with the exception of a few minor projects, I have never gone back and spent any appreciable amount of money in British Columbia.
I went to the North. I went to the Yukon, I went to the Northwest Territories and I went to Nunavut. And we’ve probably been responsible, directly and indirectly, for over $100 million worth of work in Nunavut. And it’s still kind of going that way. It started to become progressively more challenging, and I just said at this talk, if you keep throwing up roadblocks, we can pick up stakes and be gone tomorrow. Because if we’re doing exploration, we don’t have a mine, we don’t have infrastructure, we just have money that we’re going to spend. And we can take that $100 million and go elsewhere. And that’s not at risk in the Yukon right now, but if that regulatory creep continues, you know, the juniors will find it more difficult to raise money. The majors will go, well, it’s too hostile an environment. It’s not where we want to be. And that’s not the case right now. It’s still considered to be a very good place, but we are seeing certain aspects of permitting drag out, and things taking longer than they should. So it’s an ever-present risk. And that’s true in every developed country. Well, I would say the U.S. has taken a positive step in that sense. I’m not making a statement about my feelings about Trump, but what he has done is reduce the red tape and things have actually gotten easier there. Things have not gotten easier here in Canada. And even under conservative governments, for all the talk there was, things may not have gotten worse, but they didn’t get better.
TNM: When you refer to permitting issues in the Yukon, are you referring to delays at the Water Board?
TNM: What about the First Nations?
JR: One thing I was really proud of with Kaminak is that we really kind of raised the bar on developing positive working relationships with the First Nations. When we first started doing our work here, there was a lot of raised eyebrows from a lot of the other Yukon explorers, like we were rocking the boat, we were going to make life difficult for everybody else, and if you look around, I would say that it raised everyone’s game in the Yukon, and I think everyone is far better off for it. So I’m very proud of that. But that’s absolutely important in the Yukon. For the most part, there exist fairly positive relationships between industry and First Nations. But that work has to continue.
TNM: You said on the tour of Fireweed Zinc that if you don’t get it right with the First Nations, ‘you’re done.’
JR: Yes, absolutely. We’ve seen in other countries — I can think of multiple examples in Canada – where companies may get their license from the government, but if you don’t have your social license, you’re going nowhere, and a lot of projects now fail, not because the project didn’t work, they failed because they never got their social license. They failed for social reasons, and that’s 100% on the company.
TNM: When you say the Yukon is one of your favourite jurisdictions, is it the geological potential?
JR: It’s everything.
TNM: Your family history here?
JR: There’s the family history. It’s one of the most beautiful places in Canada — you could argue the most beautiful place. British Columbia is amazing as well, but the Yukon is just a great place to work. In Whitehorse, there’s a bit of an environmental movement there, but, for the most part, you walk around in Dawson here and you see signs up that say: ‘We support placer mining’. Here you can be proud of doing what you do. I can be proud of saying, ‘Ah, I’m a geologist, I do mineral exploration.’ If I sit around in a bar in Vancouver and say, ‘I’m a geologist, I look for gold mines,’ it’s like, you might as well have leprosy, right? [Laughs.] It’s not as socially acceptable in Vancouver!
TNM: Mining makes up such a huge part of the economy here.
JR: Oh absolutely, and if you take the government out of the picture, by far and away it would be the largest. It’s a great jurisdiction. I love it. It’s the same time zone as Vancouver. Jumping on a plane from Vancouver to Whitehorse is a short flight. Now they’ve paved the strip here [in Dawson]. Kudos to the government for doing that, so Dawson is an easier place to get into. It’s just great. I love it.
TNM: Was your great grandfather successful finding gold in the Yukon?
JR: It’s funny, it’s a bit of an enigma. One of the cool things is that the museum has a lot of historical records, and any person who came in and out of Dawson City back in those days had to register. I don’t know whether it was with the police or the post office, so they know who came and went. I’ve been able to see that. And my grandmother, who is a real character in her own right, used to tell these stories, and my mom would roll her eyes and say, ‘Ah, well that’s probably all BS.’ But he never kept a journal, so you don’t know. He had been in the Australian goldfields. He disappeared for two years, showed up back home two years later after having no contact, and in the meantime, his wife had passed away. He didn’t even know about it. He was a bit of a character.
TNM: What happened to him here?
JR: According to my grandmother, he came up to the Yukon with his brother, and they headed off out into the bush somewhere, and there was a third person with them. As the story goes, my great grandfather’s brother took quite ill. He was basically on the verge of dying. They had made a big gold strike somewhere, but my great grandfather had to make this choice: Do I stick with what we’ve found, or do I take him back? So he did, he took him back and took him back down south, never to return. And the story was, what happened to the gold claim, and who was this third guy? Did he strike it rich? It would have made for a good story, but who knows.
TNM: So you come by it honestly.
JR: Yeah, but it must skip a few generations. My dad was quite an avid, amateur prospector, but not a capitalist. It’s an amazing part of the world. There are so many interesting characters up here. It’s a place where you really just feel that gold fever.
TNM: How does it differ from Yellowknife and the Northwest Territories?
JR: Yellowknife is so different. You had these big mines there, you had a very strong union component. Placer miners are very independent and kind of the antithesis of the union thing. So you have created two very different kind of psyches.
TNM: Yes, and placer mining is so big here. Apparently, even a Texas billionaire is up here doing placer mining now.
JR: I wouldn’t doubt it. It’s the sort of thing, honestly, it does get in your blood. I’ve never placer mined per se, although I do have a placer deposit in the Yukon I haven’t done anything with. But when you get on to finding something, it does get to you. And a lot of these placer miners really don’t make a whole lot of money, but you just never know what’s coming in the next shovel-full. And I think that TV show Gold Rush has got a whole bunch of people wired up about it.
(This article first appeared in the August 5 edition of The Northern Miner)