Millrock Resources (TSX-V: MRO) CEO Greg Beischer on Upcoming 2,000-Meter Drill Program with JV Partner Resolution Minerals at the 64North Gold Project in Alaska

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

Greg Beischer: Doing great, Gerardo. Thanks for having me on again. I'm in Vancouver and have been for a little bit here. It's been great to see the palpable change to the investor mood in our sector. I first saw it in Australia six or seven months ago, but it's definitely arrived in North America now. Investors are interested in gold and gold exploration stocks again.

Gerardo Del Real: And they're interested in the leverage that quality gold explorations can provide. Gold is sitting right at that $1,550 level. That is robust and we're talking US dollars. If we get into it in other currencies, obviously, it looks even more bullish. 

Let's talk about why your phone has been ringing. Frankly, it's go time and it's a make or break moment in a sense, 2020 for Millrock Resources. You were very prudent in putting together a massive district-scale land package in Alaska during the bear market. You then were able to negotiate a very shareholder-friendly deal for Millrock shareholders that would guarantee up to $20 million US in exploration. The first $5 million of that with your joint venture partner, Resolution Minerals, will be spent this year. 2,000 meters of that will be drilled initially starting in early March

Can you provide the details about what you're drilling, how much you're spending initially, and then what the follow-up is going to look like?

Greg Beischer: Sure can, Gerardo. Yeah, you captured it pretty well. Millrock started working on this 64North Gold Project almost five years go now, picking up key claim blocks immediately adjacent to Alaska's Pogo Gold Mine, a great high-grade underground mine now operated by Australian company Northern Star Resources. They're doing a great job improving the mine and discovering more ore, which is interesting because some of the new deposits that they've discovered are very close to mutual claim boundary between Northern Star and Millrock.

There's an old adage that says the best place to find a mine is in the shadow of a headframe. In other words, right beside another mine. I think there's a lot of truth in that adage. A mine's already being permitted in that area. We know there's at least 10 million ounces of gold sitting on our neighbor's property being mined. So the rocks are permissive and that means there's a good chance, with infrastructure already developed, that a couple of million ounces would be a new mine in its own right. 

So we always like to explore near existing mines or former mines. And this is a perfect example of it. Pogo is literally within sight of the place that we'll be drilling first, which we call the Aurora Target.

Gerardo Del Real: Excellent. Now you know that I am never a fan of dilution, right? So you also concurrently announced that you're raising $1 million Canadian. You were pretty specific in noting that the proceeds will be used to acquire more gold projects in Alaska's Tintina Gold Province. I have to believe that you wouldn't be raising the capital if these projects weren't high quality and accretive. 

Can you speak to the types of projects that you're looking at rolling into the portfolio and how that fits in with exploration in regards to the property that you're drilling first at West Pogo?

Greg Beischer: Sure can, Gerardo. Look, I'm never a fan of dilution either. I'm a big shareholder in my own company and I don't like to get diluted. In this case, I won't because I've been buying shares on the open market. I'll participate in this financing, too. But I really feel, like you said, it's go time. 

It's go time on our 64North Project, but it's also go time period. I think we're poised for good moves and the price of gold and concurrent moves in investor sentiment. I think the speculators are going to start pouring back into our market upon some exploration discovery success. If a few companies increase their share values significantly in the next few months as the market is building, then it'll really be a domino effect. 

Of course, Millrock would like to be that very first discovery that kicks off a new North America exploration gold bull market. We've got every chance in the world of doing that at the Aurora Target.

It's one of the most compelling drill targets that I've ever come up with. We can see drills turning on the other side of the claim boundary on Northern Star's ground. Clearly they're delineating a new gold deposit. It looks like it strikes onto our property and we have every geological, geochemical, and geophysical reason to believe that it does. 

So we'll start drilling a month from now in March. We did all the prep work in November and December, so we're ready to go. The drill contractor's selected. We'll be ready to mobilize in a couple of weeks. The first program will be four or five holes from a ground-based operation, each hole being 400 to 500 meters deep. We want to do good tests on this. 

At Pogo, there's four stacked quartz veins, each about 100 meters apart, each one of them is a deposit in its own right. So we've got to be sure that we drill deep enough that we see those multiple quartz veins if they exist.

Gerardo Del Real: Excellent. I mentioned how shareholder friendly the deal with Resolution was, and I want to just go ahead and just provide the context there. So Resolution can earn up to a 60% interest in the 64North Gold Project through exploration expenditures of $20 million US, payment of $200,000 US cash, and issuance of 38 million of Resolution shares. 

I am always careful with project generators because oftentimes they give up too much in exchange for a partner that will drill. I thought this deal was extremely fair to Millrock shareholders. I also thought it was fair to Resolution because the bottom line is you're either going to have a significant discovery or discoveries – and we'll talk about that in a second – on your hands here or you're not. Right? But you're definitely going to give it a proper testing.

Let's talk about what happens after the initial 2,000 meters on the Aurora Target. You were very specific to Resolution, and I think both companies agreed, that there was potential outside of this target. This is obviously one of the more compelling ones that you've seen in your career, but there are many targets on this massive land package. Can you speak to the approach in regards to the other targets on the property?

Greg Beischer: Sure. $20 million to earn 60% on the face of it sounds like a great deal for Millrock and it is, but it really is for Resolution shareholders as well. I mean, we staked what I believe will be an entire gold camp on the scale of Val-d'Or, Quebec or Red Lake, Ontario or Kalgoorlie, Australia. And so for a little tiny junior company, that has a $4 or $5 million Australian market cap, to have access to own the claims on a entire district is really quite astounding. So I felt like we both came away with a great deal.

One of the better parts of the deal, in my view, is that $5 million US dollars have to be committed to the project this year. And so this first drill program just gets us started. Honestly, the technical team of geologists is having a great time lately collaborating and sorting through our enormous database of information on the Goodpaster District, selecting targets for follow up. 

We're going to have a pipeline of prospects, just like the Aurora Target, that we're going to drill first. We're going to have these all over this huge 660 square kilometer property. So it's a good deal. It's going to be a great project for years to come for our two companies.

Gerardo Del Real: Last question, Greg. You mentioned the $5 million US that is planned in 2020. How much of that budget is going into this initial 2,000 meters?

Greg Beischer: Yeah, around $1 to $1.2 million is going to the this current exploration program. We think it could very well roll right into the follow-on program. There's some targets that are just to the north of where our road ends. We'd probably use a helicopter to move the drill to several locations there. Of course, any of these holes hit with quartz veining and gold, then we're really off to the races. 

It's clear that the market is very receptive in Australia. Resolution set out to raise just over $4 million dollars Australian last week and by the time they were done, they had more than $10 million Australian dollars in order. So the market is here and it's receptive to gold exploration stories. And more importantly, I think, for investors it means that there'll be a lot of torque and some serious share price increases upon exploration success. So we're looking forward to doing our best and making that discovery.

Gerardo Del Real: Exciting times, Greg. It's why we stay in the space during the tough times. As a shareholder and someone that's been following the stock and covering it for years, I'm absolutely thrilled that we are finally going to get drills in the ground on this property because I think you've said it well in the past. This might not just be a significant discovery. It has the potential to become a brand new gold camp in Alaska, a jurisdiction that's just so supportive of responsible mining. Anything else that you'd like to add, Greg?

Greg Beischer: Just to finish answering your question and of why now to raise money. And like I said, we have got our sights set on some other gold projects in the Tintina Gold Province of Alaska. I think it really is time to move on these, even expand our portfolio and maximize the chances that over the coming years of the gold bull market that Millrock will make a discovery or multiple discoveries.

Gerardo Del Real: Excellent. Greg, chat soon. Exciting year. Next time we talk, we'll be talking about drills turning. So I'm looking forward to that. Thanks again for the update.

Greg Beischer: Yep. Thank you, Gerardo. Talk to you again soon. Bye now.

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