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Millrock Resources Project Generator Strategy
By James West
MidasLetter.com
Monday, November 2, 2009
Millrock Resources (TSX.V: MRO) has adopted the business model that is characteristic of companies that are able to weather difficult economic times and excel at delivering shareholder value during such crises. The secret to a successful project generator model is nimble and opportunistic management who can identify undervalued projects and negotiate terms for their acquisition that are favourable to the company and its shareholders.
Now with a portfolio of projects in Alaska and Arizona, the company is optimistic about its future.
Millrock has a market capitalization of just under CA$7 million. At $0.20 per share, a discovery or even modest exploration success could see significant share price appreciation over a relatively short period of time.
“We’re here for the long term,” said company president Greg Beischer. “Given our strong relationship with Kinross, Vale and other juniors, we’ve got a great pipeline and access to some very intriguing projects. With every acquisition, our chances for a major discovery improves dramatically.”
The company recently issued a corporate update. The following is excerpted from that document:
“Millrock has firmly adopted the Project Generator business model. Our technical team generates exploration targets, performs early stage exploration to prove potential, acquires the mineral rights, then markets the properties to other companies that will fund exploration to earn an interest in the claims. The model shares exploration risk and significantly increases the chances of ore body discovery by exploring multiple properties, while maintaining the potential for a major increase in shareholder value.
Millrock exploration crews spent much of the Alaska field season doing reconnaissance exploration surveys to generate more gold projects in the state. This work was done in favor of drilling, which would have quickly depleted our precious cash resources or necessitated raising large cash sums at highly dilutive share prices. Rather, the company elected to carry out relatively low-cost surface exploration, systematically advancing its existing projects, performing generative exploration work, building its property portfolio and biding its time for better market conditions. Millrock has built itself a very strong foundation resting on an excellent array of mineral properties in stable jurisdictions, superior technical and management team, and a sound business model that will result in a sustainable company with maximum potential for discovery of valuable ore deposits.
Market conditions have improved remarkably in the past 60 days. Now is the time for Project Generator companies to act swiftly and decisively. Millrock is adding significantly to its property portfolio. Claim staking and third party acquisitions are being made as this update is written. Negotiations with earn-in partners are underway. We anticipate a very active year of drilling in 2010 starting in the winter months in Arizona. The goal is to have a minimum of four drilling projects next year; three of which will be funded by partners. Millrock will retain a 100% interest in its Estelle gold project in Alaska and fund its own drilling program at this exceptionally exciting project.
Expected events over the remainder of 2009 include:
- Reporting of surface exploration results from Estelle project, Alaska
- Announcement of new gold projects acquired by staking and by agreements with third parties in Alaska
- Execution of earn-in exploration agreements with other parties that will fund exploration on Millrock properties in Alaska and Arizona
- Announcement of surface exploration results and drilling plans for Galiuro project, Arizona in conjunction with partner Vale Exploration Canada
With major drilling programs beginning soon on high potential gold projects in a booming gold market, with a current low share price, Millrock is poised to increase shareholder value significantly.
Details on activities follow:
Project Generation Activity and the Altius Strategic Alliance, Alaska
Earlier this year, Altius Minerals made a private placement financing with Millrock. This alliance has provided Millrock with funding for generative exploration work. Millrock crews spent many weeks prospecting in the Kahiltna Terrane northwest of Anchorage, Alaska in the area surrounding Millrock's Estelle gold property and Kiska Metal's Whistler porphyry copper-gold property. Millrock's crews have made some excellent discoveries of additional porphyry and intrusion-related gold occurrences. Watch for announcements of claim staking activity in the near future.
Millrock was also actively carrying out reconnaissance surveys elsewhere in Alaska in areas not subject to the Altius strategic alliance. The main target of this work was intrusive-hosted gold deposits in eastern Alaska. Again, announcements of property acquisition and details on the property merits will be forthcoming in the near future.
Estelle Gold Project, Alaska
Exploration crews identified the source of exceptionally anomalous talus fines and mineralized talus blocks that had been discovered in late 2008. Extensive zones of breccia and stockwork style arsenopyrite mineralization is exposed upslope from the talus, and grab samples confirm gold grades of 3 to 5 grams per ton. Chip sampling has been accomplished (despite steep, challenging terrain) at several locations at the Shoeshine and Oxide Ridge occurrences. Results of the chip sampling work are expected soon.
Bering Straits Project, Alaska
Millrock was not required to expend exploration funds on lands subject to the exploration agreement with the Bering Straits Native Corporation, and given the economic conditions, only a small amount of work was done on the Council block. Some strong soil anomalies were discovered in the uplands upstream from the prolific placer gold deposits of Ophir Creek, which historically account for a minimum of 500,000 ounces of production. Millrock anticipates formulating earn-in joint venture agreements with other companies on both the Council and Bluff lands tracts that form the Bering Straits project. Drilling on both properties is anticipated for 2010.
Fortymile Property, Alaska
In late summer of this year Millrock purchased an extensive exploration data set from Kennecott at a tremendous discount to its original cost. The work Kennecott had done in the 1990's, which included portions of Millrock's holdings, was extensive. Following on analysis of this data, strong drill targets have emerged, and Millrock has increased its property position extensively. The company anticipates making an earn-in joint venture agreement on the project in the near future.
Galiuro Project, Arizona
In spring 2009, Millrock carried out geological mapping and airborne magnetic and ZTEM geophysical surveys. The ZTEM survey is a cutting-edge technology that appears to be an excellent tool for imaging porphyry deposits beneath cover. The work was funded by earn-in partner Vale Exploration Canada. Geophysical data processing is complete. The Millrock and Vale technical team will meet in late October to finalize interpretations, choose additional ground geophysical surveys and identify drill targets. Assuming that compelling drill targets are identified, drilling would proceed in winter 2010.”
Follow the company’s progress at www.millrockresources.com.
SOURCE: http://www.midasletter.com/news/09110201_Millrock-resources-project-generator-strategy.php
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