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Millrock Resources (TSX-V: MRO) CEO Greg Beischer on a New Strategic Alliance with Centerra Gold, Upcoming Drilling, and 2017 Catalysts

January 9, 2017

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is President and CEO of Millrock Resources (TSX-V: MRO)(OTC: MLRKF) Mr. Greg Beischer. Greg, Happy New Year. How are you doing this afternoon?

Greg Beischer: Happy New Year to you Gerardo. I'm doing great and always a pleasure to speak with you.

Gerardo Del Real: Thank you for taking the time. I wanted to have you on. I know the last time we spoke we talked about possibly being able to, in the new year, finalize a deal with Centerra Gold (TSX: CG)(OTC: CAGDF) to form a strategic alliance, and that's finally official now. You had a news release yesterday, and the headline reads: "Millrock and Centerra Gold form strategic alliance to target gold projects in Sonora, Mexico." Can you share the details behind the strategy there with Centerra and what that looks like moving forward?

Greg Beischer: I sure can. I was really pleased that this finally came together, Gerardo. It's about not a quite a year ago that we were first introduced to Centerra, and we showed them a number of our gold projects in Sonora State, Mexico. Well, they liked two of them immediately and went ahead and optioned the Los Chinos and Los Cuarentas projects that we're working on right now. Over that time, I think they really came to like and respect the exploration team that we've built down there, and they approached us and said, "We'd like to form a strategic alliance." It took a while to pull together all the details and work out the final agreement, but we've done that. We'll kick things off next week. You'll see almost right away two or three, maybe, new projects plop out of that alliance work. Things that we'd be looking at that we couldn't necessarily act on because we didn't have enough money. Now, with their backing, we do.

I really like these strategic alliance agreements, because it means there's no drain on Millrock's treasury. In fact, we make a little modest management fee on every dollar that gets spent. Even from the first research and the very first field work, the partner, Centerra, is covering the cost. There's no risk to Millrock's treasury, no risk to Millrock's shareholder, and the outcome could be that Millrock's shareholders end up owning 20% of a mining operation, which would we be great, especially since we didn't risk any money to get there.

That's how the deal works. They fund us to do early stage exploration and generative work within Sonora State. If we nominate a project to be a designated project and they agree, it would break out and get its own budget that they continue to solo fund up until the point $2.0 million has been spent specifically on that project area. Then it becomes a joint venture.

Gerardo Del Real: Fantastic. I know this alliance targets specifically Mexico, and I understand that you have a pretty robust portfolio in B.C. and in Alaska. With the recent uptick in gold here in the last couple of weeks, have you see increased activity there behind the scenes? Maybe people approaching Millrock about possible strategic alliances elsewhere?

Greg Beischer: Absolutely. Things were bubbling up pretty good last July and August, and junior companies were approaching us about projects. Then, things died off November, December with the price of gold going down. Suddenly, this week, it's game on again. We've re-initiated discussions with quite a number of different junior companies, and now the majors are coming too. I think things are on the upswing for sure, and I'm looking forward to really having a lot of exploration ongoing on all three of our jurisdictions: Sonora, Mexico; Stewart Camp, British Columbia; and in Alaska. It should be pretty much continuous news flow throughout the year and several drilling projects.

Gerardo Del Real: Of the projects in Mexico, where do you anticipate drilling? I know that we just recently had very early stage results out off the Los Chinos project. Will there be follow-up drilling there? Then you had mentioned the Cuarentas project as well. Are looking to possibly drill that this year?

Greg Beischer: Almost for sure we'll drill at Los Cuarentas. We're just now completing the surface surveys, but we already know that we're going to want to drill some of the targets that are emerging. There's budget in place for that with Centerra. We will go back to Los Chinos. The drill results were not positive, but it's got a lot of good attributes and neither company, us or Centerra, is willing to walk away from it at this point. We're going to do more field work and see if we can't unravel the issue there. There'll be other drilling projects in Mexico in all likelihood later in the year. I can't talk about them much, but there are things that we have and will be targeting with this new strategic alliance.

Gerardo Del Real: You mentioned earning a modest management fee for the exploration portion of it, being a project generator. Where does the cash position stand right now Greg?

Greg Beischer: We're at around C$2.4, C$2.5 million, and we're in fairly good shape, but we're not draining it too fast because, at this point, our Mexico operations more or less are self-sustaining. All the people are fully occupied on partner-funded projects. The management fees more or less cover our office overhead, and so Mexico's in great shape. We need to get there at the same level again in Alaska and B.C. I'm actually becoming more and more confident every day that we're going to get there this year and end up being a cash flow neutral pure exploration company before the end of the year.

Gerardo Del Real: Excellent. Shareholders shouldn't expect any dilution any time soon?

Greg Beischer: One would hope not, though, if we saw the right acquisition opportunity that was more than we have in our treasury right now, then we would consider doing a financing to cover that new acquisition.

Gerardo Del Real: Well, it sounds like it's going to be a busy 2017 Greg. You have drilling in Mexico, the possibility of new projects being generated there, and then it sounds like you have some activity in Alaska and B.C. that we can look forward to as well.

Greg Beischer: Yep. It's all coming together. We took some big risks over the last couple of years building our portfolio, but I'm pretty sure this is the year it's going to pay off.

Gerardo Del Real: Well, Greg, I want to thank you for your time. Thank you so much for coming on, and hopefully as the story develops here in the next couple of weeks and months we can have you back on to provide updates.

Greg Beischer: That'll be great. Look forward to it. Bye Gerardo.

Gerardo Del Real: Thanks again Greg.

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