Covering fireplace in basement... need vapor barrier?
Where's the ashpit clean out door? Inside? Outside? You need to stuff insulation up the chimney just above the damper, make sure the damper is fully closed, securely, and make some form of metal cap for the top of the chimney that can be securely fastened also. If the ash pit door is out side run a bead of silcone around the door gap to the frame and you should be golden. A general rule of thumb for enclosing any type of masonary wall is to definitely put up a visquene vapor barrier whether it is buried or not. Good Luck !