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Millrock Resources (TSX-V: MRO) CEO Greg Beischer and Head of IR Melanee Henderson on Completed Drill Program at Stellar Copper-Gold Project in Alaska

October 6, 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: MRLKF), Mr. Greg Beischer, and Melanee Henderson, Head of Investor Relations for Millrock Resources.

Melanee and Greg, how are you this afternoon?

Melanee Henderson: Fabulous.

Greg Beischer: Doing great, Gerardo. Thanks for inviting us on the show again.

Gerardo Del Real: Well, thanks to the two of you. I know, Greg, you're in Fairbanks, Alaska, right? Above my old stomping grounds, I spent 17 years in Anchorage. Melanee, I believe you're in Vancouver, if I'm not mistaken. Is that correct?

Melanee Henderson: Yes, and we're having supposedly one of our last days of sunny weather.

Gerardo Del Real: There you go. Well, an excellent day for the news release yesterday. Millrock just completed the drill program. It's a drill program that I've been excited about, the Stellar copper-gold project there in Alaska. You had some very, very good initial visual results. I'd love for you, Greg, to get in to the details of it. I also want to congratulate you on the work Millrock did. Millrock was the operator of the project, along with PolarX, on behalf of PolarX. I thought you guys did a fantastic job of beating the cold season there in Alaska, so congrats on that, and congrats on some very good initial visual results.

Greg Beischer: Thanks, Gerardo. I can tell you, it's pretty chilly here in Fairbanks this morning. It was very late in the Alaska field season that this came together for PolarX. They raised their funding in August. A strong Australian 6 million dollar raise, so we fortunately have a team that was prepared to jump into action and execute a program with two drills and helicopter support. Not to mention, geological surveys, mapping, prospecting, geophysical surveys, and some baseline environmental studies all in the past five weeks. Very fortunately, the weather held for us and allowed us to complete that work as efficiently as possible and, in fact, meet the objective of the program, which was to do enough drilling to reestablish the high-grade copper-gold historic resource that had previously been reported at the Zackly deposit on our Stellar claim block.

Gerardo Del Real: Excellent. Now, I understand that most of those Zackly drill holes encountered visual high-grade copper mineralization. Can we talk a bit about that because that's not inconsequential, right? We have a copper price that's flirting with $3 dollars a pound again. The Millrock share price today is up 7.5% on the exchange so the news was obviously very well received. You did an amazing job during the bear market of acquiring very quality projects, but I think the market's been waiting for proof that these projects were indeed of good merit and good quality and I think this is the very, very first indication that you did indeed bring in some amazing projects. So again, congrats. Can we speak to that a bit?

Greg Beischer: Thanks. Sure. Well, the proof is really going to be when the assay results come in 4 to 6 weeks from now. Certainly the mineralization in the drill cores looked good. Bear in mind, what we're doing here, Gerardo, is redrilling a known historic deposit.  The core recoveries from that old work, which used very small diameter core, was quite poor and we had no confidence in the historic reports. We've gone in with a big diameter H core, we used triple tubing to make sure that we recovered all the mineralization that we could when we drilled through it. That allowed us and PolarX to be much more confident in the amount of gold and copper that's in the ground.

The core was fascinating to look at though. The copper minerals are low in sulfur, so that means covellite, cuprite, these high copper, low sulfur minerals and, indeed, there's even a substantial amount of native copper present, which is really rather unique. It's a different looking style of mineralization.

Gerardo Del Real: Excellent. Now, you mentioned that historical estimate and you mentioned not having a lot of confidence in it because of the core recoveries, but the historical estimate is significant in the sense that the grades were at 2.9% for copper and 4.5 grams per ton for gold. I think the total was approximately 1.5 million tons. Again, we don't have to give a lot of weight to the tonnage there, but I think the grades were pretty significant. If you're able to duplicate or exceed that that bodes well for the next steps at the Stellar project.

Greg Beischer: Yeah, it sure does. I'm reasonably confident that we're going to verify the historic resource and maybe even expand upon it. We'll really look forward to 2018 when we'll have the opportunity to test to see if this deposit continues along strike and downdip. Yeah, the grade is very attractive.

Of course, what brought Millrock into this area initially to begin with some years ago was the potential for a large, low-grade, bulk minable porphyry copper-gold deposit. There are some fantastic indications that such a deposit, or series of deposits, exists on the Stellar claim block. One of those signs is the Zackly skarn. Skarn deposits very typically occur in the same terrain as porphyry deposits. We look forward to advancing that exploration and doing the first round of drilling on some of our ideas for porphyry coppers.

It is an exciting time in the copper business. It's good to have an up and coming copper project in an increasing price environment.

Gerardo Del Real: Well, the drilling should excite every speculator in the space. There's a lot of large and untested targets. I think some of those include the Mars target, the Jupiter target, the Gemini target, Moonwalk and Senator. 2018, obviously, is going to be exciting. It should be exciting for Millrock shareholders because, of course, Millrock owns approximately 10.7% of outstanding shares of PolarX. Is that correct, Greg?

Greg Beischer: That's right. We're a large shareholder. Additionally, we will realize royalty income if there's production, advanced royalty payments up until production occurs, and if we grow the resource to certain thresholds, then there's milestone payments that will be payable to Millrock. We're happy with this deal, and we're happy to be working on the project.

Gerardo Del Real: Excellent. Now, another project that I'm excited about is the La Navidad in Sonora, Mexico with your partner, Centerra Gold. I want to talk about that in just a second. But beforehand, Melanee, we had an opportunity to catch up very briefly at the Beaver Creek Precious Metals Summit, a conference that I thought was very well put together, it was very productive on my end. I know Millrock had several meetings and there were discussions with potential JV partners. Can I get your take, Melanee, what did you observe? What was your overall feel on the conference?

Melanee Henderson: Well, it was our first time attending, but I have to say that, boots to the ground, we put our heads down and we met everyone we could possibly meet. Out of that came some amazing meetings of that and follow-up that we're going to be busy for over the next 6 to 8 months with potential opportunities. Millrock was very well received, all the jurisdictions that we're in, everyone was excited to hear about what we are doing. I know Greg was really tired by the end of it from talking so much, but it was probably the best conference that I've been to this year for the one-on-ones. It was just stellar.

Gerardo Del Real: Excellent, excellent. Are you finding, Melanee and Greg, that you're getting a lot more attention now on some of these other projects? Again, I mentioned earlier that you were able to put together a portfolio of very high quality projects during the bear market and it's been a little bit of a waiting game to actually get the drills turning on some of these projects. But, drills are turning now and it looks like they will here for the next several quarters. Are you finding a lot more interest in some of the other projects?

Greg Beischer: In my discussions with major and mid-tier companies in Colorado, it became clear that their exploration budgets have increased recently. Major companies are on the hunt for quality exploration projects, they've got money, they're ready to invest it. Yeah, we're quite excited and I'm reasonably confident we're going to have quite a few new partners over the coming months for the rest of our unpartnered as yet projects.

Gerardo Del Real: Excellent. Well, Melanee, I want to get your thoughts really quick on the gold price and the gold space in general. We've seen a consolidation of sorts here since the last time that we spoke. Where do you see that going? Can I get your two cents on that?

Melanee Henderson: Well, I've watched gold this week kind of plummet and then I've watched it come back up a bit, and then I know overnight, I seem to have been wide awake at 1:00 in the morning and looking at the price of gold and seeing that it actually had run up against some resistance at about $1,278. I think we spoke earlier, I'm quite sure that we are going to have a few more bumps on the road before it actually hits an upward trend but I'm very confident at it. For me, all the indicators are there that it could go in the right direction here over the next 6 to 8 months.

Gerardo Del Real: Excellent, excellent. That would be excellent timing because the next project that will be partner-funded drilling with Centerra Gold is, obviously, a gold project and that's the La Navidad project in Sonora, Mexico. Greg, can you provide an update there? Are we going to see drills turning soon? That's a project that I'm very excited about.

Greg Beischer: Yeah, the crew down there has been going flat out. We've been through geologic mapping, magnetic and induced polarization, geophysical surveys, rock sampling, and trenching. It's all coming together very, very rapidly. The results are very encouraging and it would appear that we'll start initial drilling maybe even before the end of this month. We'll no sooner have drill results rolling out from the Stellar Project and we'll be on to the next one, hopefully making a brand new gold discovery at La Navidad.

Gerardo Del Real: You mentioned the historic drilling, Greg. There's been near surface results that I'll highlight a couple here. There's an intercept in hole NDH 1 that was 13.2 meters of 2 grams per ton gold. There's another intercept of 19.5 meters of 0.84 grams per ton gold starting right at surface. Is that the type of target that you're looking for? A bulk tonnage, near surface target? Or are there multiple target types?

Greg Beischer: We're really looking for that orogenic style, that low-ish grade but minable by bulk methods. The prior workers had noticed that there were veins of quartz that were gold-bearing and fairly high-grade and that's what they were drilling for. At the time, they didn't really realize the significance of the weaker gold mineralization over broad lengths of the adjacent wall rock. That's really what peaked our interest and Centerra Gold's interest. We expect to verify that historic drilling again, just make sure that those results are valid. What's emerged from our soil sampling is that that little area that was drilled is probably not the only mineralized area on the property. There's some very, very intriguing soil results and geophysical anomalies that we'll be targeting as well.

Gerardo Del Real: Great. When can we expect a finalized drill program, the details from that program, Greg?

Greg Beischer: Probably not for some weeks, but we'll make a press release when we commence the program and that should lay it out pretty clearly. If, at all possible, I'd like to arrange a tour for yourself, Gerardo, since you've shown strong interest in this project and get to know it firsthand.

Gerardo Del Real: I would be absolutely thrilled and I thank you in advance. I definitely appreciate the opportunity, Greg. I will also be presenting and speaking at the New Orleans Investment Conference, it's my favorite conference of the year. We just caught up at Beaver Creek, I understand Millrock, yourself, and Melanee will also be there. Is that accurate?

Greg Beischer: Melanee definitely will be and we're just figuring out my schedule as we speak.

Gerardo Del Real: Fantastic. Well, hopefully I can have you on as soon as you finalize the details of that drill program at La Navidad, I'd love to go see the project in person, we'll definitely talk about arranging that. Melanee, is there anything else that you'd like to add from Vancouver?

Melanee Henderson: No, not at this time.

Gerardo Del Real: Excellent. I want to thank you, excuse me for interrupting, but I want to thank you for coming on today and chatting with us and giving us your observations on the Beaver Creek Precious Metals Summit, I thought it was important feedback. Greg, anything else that you'd like to add?

Greg Beischer: No. I'm just happy the way things are going, Gerardo. It's one drill program after another and always got the chance to make that big discovery that's going to give serious rewards to our shareholders.

Gerardo Del Real: Well, it should be a fun couple of quarters, it's a long time coming. Again, you did a lot of great behind the scenes work and it's great to see some of those results start paying off. I also want to have you back as soon as we start getting the actual assays from Stellar, I think those are going to catch some new eyes and bring some new attention to the stock.

Greg Beischer: That would be great. Thank you very much.

Gerardo Del Real: Alright, thanks to the two of you.

Melanee Henderson: Thanks, Gerardo.

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