Millrock Resources (CVE:MRO) said Monday that it has started drilling at its Estelle Gold project, located northwest of Anchorage, Alaska.
The drilling program will consist of seven holes for a total of around 1,500 metres.
Five of the planned holes will be drilled at the Oxide Ridge
occurrence, where Millrock intersected a thick, low grade gold
intersection during its 2011 drill program.
The remaining two holes will test geochemical anomalies in pyritic
rocks on the margin of an intrusion at the RPM showing, located at the
south end of the claim block.
The Estelle Gold project is a joint venture between Millrock and Teck American, a subsidiary of Teck Resources (NYSE:TCK) (TSE:TCK.B), which holds 55 per cent of the property.
Geologic features and surface geochemical anomalies indicate the
potential for large, bulk-minable deposits at the project, the parties
Indeed, Millrock has identified four main zones of large-scale
anomalous gold and pathfinder element geochemistry over the last three
years - Shoeshine, Oxide Ridge, RPM, and Stoney.
At the Shoeshine and Oxide Ridge prospects, Millrock previously
discovered a multi-element soil geochemical anomaly in a circular area
measuring 2 km in diameter. Hole SE-001 intersected mineralization from
depths of 31.8 to 397.1 metres and returned a weighted average of 0.43
grams per tonne (g/t) gold over 365.3 metres.
Many of the claims that comprise the property are subject to a three percent NSR royalty payable to third parties.
The property is adjacent to Kiska Metals’
Whistler copper-gold deposit, and is located in the Kahiltna Terrane
that hosts Northern Dynasty/Anglo American's giant Pebble
Millrock has a 45 per cent share of the 2012 exploration program that
is estimated to cost $800,000. Under the terms of its agreement with
Teck, the company will borrow up to the entire amount necessary to cover
its share of the planned program costs.
The loan has a six per cent interest rate and must be repaid by the
end of this year. If Millrock does not repay the loan, then its interest
in the Estelle project will be reduced to around 35 per cent from 45
per cent currently.
Millrock provided at the end of June an update on its exploration
activities in Alaska and Arizona, securing "substantial" funding for
exploration on new and existing projects.
In 2012, partner-funded drilling has occurred on, or is planned for,
six different projects - three in Alaska and three in Arizona.
Earlier-stage exploration work will also be completed on five other
projects in anticipation of drilling in 2013, the copper and gold
Millrock's business model is to identify and package large-scale
projects for joint venture. This year, its exploration expenditures are
on track to exceed US$11 million, with 90 per cent of the funding being
provided by partner companies that are earning-in through option
In Alaska, the company's alliance with Altius (TSE:ALS)
has allowed it to generate six projects, three of which are under
earn-in agreements with other companies. Roughly $500,000 will be spent
using strategic alliance funds in 2012 to generate more projects,
With its Vale (NYSE:VALE)
partnership for copper-gold porphyry targets in Alaska, the project is
budgeted at US$1 million in 2012. Reconnaissance geochemical exploration
and airborne geophysical surveys are in progress and exploration crews
are currently in the field.
Millrock said the first "designated project" proposed to Vale
was accepted, and recently announced as a stand-alone project named
AUDN. Surface surveys will be carried out in July and August under a
separate budget of US$830,000, the company added.
Aside from the Estelle project in Alaska in joint venture with Teck, Millrock also holds the Humble project with Kinross Gold (TSE:K), where a follow-up drill program is contemplated for later this year.
Meanwhile, in Arizona, surface geochemical and geological surveys are
planned to follow up on an airborne survey at the Monsoon project,
which is under an earn-in agreement with Inmet Mining (TSE:IMN). Drilling may follow later in 2012 or early 2013, Millrock said.
Shares of Millrock closed Friday at 23.5 cents.