Millrock Resources starts drilling at Estelle gold project, Alaska

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 said.
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 copper-gold-molybdenum-silver deposit.
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 explorer said.
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 agreements.
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, Millrock said.
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.