Millrock Resources (MRO-V) budgets $5-million for 2013 exploration
March 7, 2013 - News Release
Millrock Resources Inc. has provided an update on its exploration activities.
By continuing to rigorously following the project-generator-joint-venture business model, Millrock Resources remained very active throughout 2012, despite prolonged market uncertainty. Millrock's 2012 exploration expenditures exceeded $9-million (U.S.), 95 per cent of which was financed by partner companies through earn-in option agreements. By the end of 2012, Millrock had recovered 87 per cent of all funds spent on exploration since inception of the company by utilizing the project generator model. Through 2012, Millrock also reached a number of other milestones it set out to achieve, including:
- Completed drilling at five projects including Estelle, Council and Humble in Alaska, and San Jose and Galiuro in Arizona;
- Added one Alaska-based project to its portfolio, bringing the total number of properties to 19;
- Formed option-to-joint-venture agreements with Inmet Mining Corp. on the Monsoon project in Arizona and Vale Exploration USA on the Audn project in Alaska;
- Formed a joint venture with Teck American Inc., a subsidiary of Teck Resources Ltd. on the Estelle project in Alaska;
- Closed a $2.2-million private placement and finished the year with approximately $3.8-million cash on hand;
- Exploration expenditures totalled $9-million in 2012, and exploration cash recoveries totalled $8.6-million.
While 2013 is shaping up to be a year of reduced budgets in comparison with 2012, Millrock anticipates that its exploration expenditures will be approximately $5-million, with $3.8-million coming from its partners. Despite a reduced exploration budget, there will remain plenty of catalysts for share price increase.
The sustained depressed market for junior explorers throughout 2012 and thus far in 2013 has created an opportunity for Millrock. The company is acquiring projects at low cost, and is positioning for the time when markets improve and more venture capital financing is available. With depressed prices, Millrock plans to continue building a portfolio of projects that attract the attention of major to mid-tier mining companies and junior explorers.
The following is an update of current projects.
Arizona
Monsoon project, copper porphyry target, Safford district, southeast Arizona
Partnering with Inmet, Millrock has carried out water well sampling to develop the target area. Regional water well geochemical anomalies can occur near, but not necessarily directly above, large porphyry copper deposits, as is the case at Safford. At Monsoon, strongly anomalous values of copper and molybdenum with porphyry pathfinder elements led Millrock to acquire a large tract of mineral rights in 2011. Water well geochemical anomalies with coincident ZTEM and mag anomalies have been the focus of a recently completed surface soil geochemical survey and geological mapping. It is expected that unconsolidated Quaternary sediments and Tertiary rock cover will be thick. The mapping program was therefore designed to understand current and historic groundwater movement directions in order to best interpret the geochemical results. During the soil geochemical survey, 496 samples were collected and analyzed for pH, and subjected to an ionic leach analytical method. The method is well suited to detecting porphyry deposits buried beneath thick cover and has been proven with several case studies.
Three distinct anomalous target areas have been identified from the geochemical, geophysical and geological surveys conducted to date. To further understand the subsurface, particularly depth to basement rocks, historic seismic survey data have been acquired. It is presently being processed and reinterpreted, and additional seismic geophysical surveys may be carried out. Upon receipt of seismic data results and interpretation, and integration into the project database, three specific targets may be selected and recommended to financing partner Inmet.
Inmet has the option to earn up to a 70-per-cent interest in the project by expending $4.5-million (U.S.) on exploration and paying $400,000 to Millrock. Presently Inmet is earning in to the project and is bearing the exploration costs. Millrock is the exploration operator.
The Monsoon project is situated along a projected southeastward extension of the prolific Safford trend. Near Safford, Freeport McMoran Copper & Gold is mining a series of porphyry copper deposits. Millrock's claims are situated approximately 60 kilometres to the southeast of Safford, Ariz., in Greenlee country near the Arizona-New Mexico border.
San Jose-Dry Mountain project, copper porphyry target, Safford district, southeast Arizona
A third phase of drilling was carried out on the San Jose-Dry Mountain project late in 2012 with the company's partner on the project, Inmet. The three holes, which totalled 3,471 metres, were drilled to test magnetic targets that have coincident geochemically anomalous signatures. All holes intersected the favourable host Laramide-age rocks beneath younger Tertiary cover rocks. However, the rocks intersected were only weakly altered and contained only local, weakly anomalous copper values in one hole. As part of this exploration phase, additional geochemical sampling was carried out. Given these results, focus will now shift to the Dry Mountain target area.
Millrock is pleased to announce that Inmet has advised the company that it wishes to exercise its option to form a joint venture on the project. Upon receipt by Millrock of the final option payment of $350,000 (U.S.) and a formal letter confirming the option exercise, Inmet will vest with a 70-per-cent joint venture interest in the project. The joint venture management committee has approved a fourth phase of drilling to test a strong molybdenum-copper geochemical anomaly with a coincident magnetic anomaly that may represent porphyry-style mineralized intrusive rocks. For the first test in this area, a single hole will be used and possibly drilled up to 1,600 metres depth. Drilling is scheduled to commence as soon as possible.
The San Jose-Dry Mountain project is positioned at the intersection of the exceptionally prolific Safford and Morenci porphyry trends. The Safford deposits, which are presently being actively developed and mined by Freeport McMoran Copper & Gold, form a linear, northwest-striking trend. The San Jose project is located approximately six km from the Sanchez deposit at the southeast end of the Safford trend. Morenci is located approximately 30 km to the northeast, and the Dry Mountain target is located upon an interpreted extension of the Morenci trend. Together, Safford and Morenci account for an enormous amount of past copper production, and future reserves and resources. A porphyry cell located on Millrock's claims was discovered by drilling done by Noranda Inc. in the early 1990s.
Note: While the San Jose-Dry Mountain and Monsoon claims are situated along the linear trend defined by the Safford deposits, Millrock does not own any interest in the Freeport deposits at Safford, nor does it imply that it will be successful in discovering similar deposits on its properties.
Alaska
Estelle project, reduced intrusion-related gold target, southwest Alaska
On Sept. 10, 2012, Millrock announced results from the 2012 drilling program at the Estelle gold property located northwest of Anchorage, Alaska. Exploration drilling was done at the RPM, Oxide and West Wing prospects, three of the nine prospects occurring within the Estelle project area. Nine core holes totalling 1,379 metres were drilled as part of the 2012 program with all nine intersecting gold and/or copper mineralization. The exploration work was managed by Millrock on behalf of Teck. Teck (65 per cent) and Millrock (35 per cent) are joint venture partners on the project.
Of particular note were the results obtained at the Oxide prospect where hole SE12-004 cut an interval averaging 1.14 grams per tonne gold over 41.45 metres from 30.79 m to 72.24 m. Gold mineralization has now been drilled over a 740-metre strike length, and the system appears open in all directions. The grade appears to increase to the southeast where induced polarization surveys suggest increasing sulphide content. The joint venture partners have decided to focus on this prospect in 2013. The management committee has approved a budget of $280,000 (U.S.) for additional induced polarization (IP) geophysical surveying, geological mapping and sampling. The goal of the work is to better define the strong IP response that was detected in 2011 and partially drilled with hole SE-12-004.
Also of note was the result obtained in 2012 at the RPM prospect. Hole SE-12-008 cut an interval averaging 2.07 g/t gold over 21.94 m from 82.30 m to 104.24 m occurring within a 102.11-metre interval averaging 1.04 g/t gold from 26.52 m to 128.63 m. This hole constitutes a new discovery of gold mineralization on the Estelle project. However, due to budgetary constraints, there are currently no plans to further advance the project this year.
Humble project, copper-gold porphyry target, southwest Alaska
Millrock, along with financing partner Kinross Gold Corp., drilled a series of four holes. Porphyry-style alteration was intersected. Kinross has since dropped its option on the project, and it is now available for option with new financing partners. The project has a similar geological setting as that at the Pebble deposit, located 120 km to the northeast of Pebble.
Council project, sediment-hosted vein gold target, Western Alaska
As previously reported, Millrock, with financing partner Kinross, drilled a series of nine holes which resulted in the discovery of a new gold zone at the Elkhorn prospect where an intersection of 1.45 g/t over 14.02 m was obtained. However, the company reports that Kinross has dropped its option on the claims. The project is available for option with new financing partners.
Stellar project, copper-gold skarn and porphyry target, central Alaska
Millrock has continued to review and assess the historical data that it purchased from prior exploration operators. A National Instrument 43-101 report was written by an independent consultant to Millrock (Eden, K.A., 2013, Stellar property, Valdez Creek mining district, south-central Alaska, NI 43-101 technical report, Jan. 8, 2013, page 113) and filed on SEDAR. The report concluded that the historical estimate of copper and gold present within the Zackly main skarn is not reliable, and redrilling will be necessary to confirm the mineralization. The project has generated strong interest from several potential partners, and Millrock plans to show the project to these prospective partners in early June of 2013.
Project generation
Millrock is acquiring new claim groups by staking and by making agreements with underlying mineral rightholders, increasing its portfolio of projects available for partnership with other companies. The company plans to announce these new acquisitions in the coming months as land positions are secured.
The technical information within this document has been reviewed and approved by Gregory A. Beischer, president and chief executive officer of Millrock Resources. Mr. Beischer is a qualified person as defined in NI 43-101.
We seek Safe Harbor. |
