Millrock and Vale Enter Option Agreement Concerning the AUDN Copper-Gold Porphyry Project, Alaska
VANCOUVER, BRITISH COLUMBIA, Jun 11, 2012 (MARKETWIRE via COMTEX) -- Millrock Resources Inc. (TSX:MRO.V) ("Millrock" or the "Company") announced today that it has entered into an option agreement with Vale Exploration USA, Inc., a wholly-owned subsidiary of Vale S.A. ("Vale"). The agreement is being entered pursuant to the strategic alliance agreement between Vale Exploration Canada Inc, a wholly-owned subsidiary of Vale S.A. and Millrock made October 11, 2011 (see press release dated October 17, 2011: http://millrockresources.com/news/millrock_and_vale_form_strategic_alliance_for_copper-gold_porphyry_dep/ ).
The objective of the alliance is to discover large-scale copper - gold porphyry deposits in target zones of Alaska identified by Millrock. This is the first "Designated Project" under the strategic alliance agreement.
The subject of the new option agreement is the AUDN project, a promising porphyry copper-gold target situated approximately 100 km southwest of the world-class Pebble deposit. The Millrock claim block is situated along a trend of porphyry occurrences. Aeromagnetic, gravity and radiometric potassium survey data indicate possible buried, mineralized intrusions within the AUDN project area. Millrock and Vale plan to carry out geophysical and geochemical surveys in 2012.
Under the terms of the option agreement, Vale may earn a 65% interest by expending US$3.5 million for exploration on the project over a three-year period and by paying Millrock US$200,000. Upon earning its initial interest, Vale may elect to carry the full cost of further exploration and development until a feasibility study has been completed, and thereby earn an additional 10% interest, for a total 75% joint venture interest. Further development of the project would proceed with the parties contributing on a pro-rata basis. In the event that a joint venture party dilutes below a 10% interest, such interest would convert to a Net Smelter Returns royalty of 2% on gold, silver, platinum, palladium and rhodium and 1% on all other metals.
Under the terms of the strategic alliance agreement, Vale is providing funding to Millrock for research and early-stage exploration to identify targets that may be nominated for Designated Project status. The work is focused on specific, defined areas of interest in the Alaska Range and Alaska Peninsula porphyry belts. Strategic Alliance funding consists of a minimum US$1.0 million in the first year, and a further US$1.0 million at Vale's option in the second year. Funding for the strategic alliance may continue in subsequent years at funding levels to be determined between the parties.
Initial investigations carried out by Millrock in 2010 were done with funding that Millrock received under a separate strategic alliance with Altius Minerals Corporation /quotes/zigman/18625 CA:ALS +0.37% ("Altius"). By virtue of that agreement Altius is entitled to a royalty on any mineral production that occurs from most of the claims comprising the AUDN project. – Millrock Resources press release continues at the link below.
Source: Millrock Resources via MarketWatch
Disclosure: Millrock Resources is a Vulture Bargain Candidate of Interest (VBCI). Members of the GGR team are actively accumulating and hold long positions in MRO.V or MLRKF.