Tuesday, 12 June 2012

Millrock inks Alaska option deal with Vale Exploration

Millrock Resources (CVE:MRO) inked an options deal with Vale Exploration in a bid to find large-scale copper-gold porphyry deposits at the Audn project in Alaska. 

These porphyry deposits in targets zones were identified by Millrock. This is just the first “designated project” under their partnership, the companies’ said in a statement.

Under the options deal, Vale can earn a 65 percent stake by spending US$3.5 million for exploration over three years and pay US$200,000 to Millrock.

After earning its initial interest, Vale has the option to carry the full cost on further exploration and development until a feasibility study is complete boosting its stake to 75 percent.

If either companies’ stake dilutes below 10 percent, their stake would convert to a net smelter return royalty of two percent on gold, silver, platinum, palladium and rhodium and one percent on all other metals.

Both companies plan to carry out geophysical and geochemical surveys this year at the Audn project, which rests 100 kilometres southwest of the Pebble deposit.

Millrock’s 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.

Vale will provide funding to Millrock for research and early-stage exploration to identify targets which 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 $1 million in the first year, and another $1 million at Vale's option in the second year.

In late April, Millrock reported drill results from its San Jose copper project in the Safford District of southeast Arizona, and said it agreed on another drilling program at the site.

The four holes completed in this program were drilled in the northern part of Millrock’s San Jose property, and targeted anomalies detected by airborne geophysical methods.

The company said that while weak mineralization was seen in one hole, porphyry-style alteration was found in two other holes, with geological observations indicating proximity to a porphyry deposit.

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