Council

Target: The large placer gold deposit on the Niukluk River originates at its confluence with Ophir Creek. This deposit extends downstream for at least ten miles and was up to one-half mile in width. On Ophir Creek, placer gold has been mined a minimum of sixteen miles above that confluence. Historical placer gold production from these two creeks is estimated at 1 million ounces of placer gold. Millrock is targeting the lode sources of these placer deposits.

Location and Setting: The project is located in the historic Council Mining District on the Seward Peninsula, roughly 100 kilometers northeast of Nome, Alaska. The village of Council is located on the north bank of the Niukluk River above the confluence with Melsing Creek, which has also produced gold. Council is connected with Nome by a seasonal State-maintained gravel road. A gravel road extends from Council to Ophir Creek, then up Ophir Creek to the northern limits of placer gold production. The terrain consists of rolling hills with a maximum relief of about 350 meters. The Ophir Creek drainage does not appear to have been glaciated.

Property: The lands being explored state include state claims that Millrock has staked, or optioned from others, and lands owned by the Bering Straits Native Corporation. Millrock owns, or has the ability to secure a 100% interest in all of the mineral rights comprising the properties. In total the lands cover approximately 295 square kilometers.

Agreement or Terms: Millrock has made an exploration agreement with Bering Straits Native Corporation (BSNC) on three discrete tracts of land on the south side of the Seward Peninsula. The lands at Council subject to this agreement total roughly 192 square kilometers and cover the source rocks for placer deposits that have been mined since the early 1900's. The BSNC agreement covers all three properties and is an option to lease with a five year term. These terms include:

US$4 million work commitment; $700,000 in 2010
US$550,000 in option payments; $70,000 in 2010
Scholarship donation, US$40,000; $10,000 in 2010
1.0 million MRO shares; 200,000 in 2010
NSR 2.5% to 5.0% sliding scale tied to gold
BSNC can participate up to 10% at their option at feasibility

Most of these lands are split estate. The BSNC owns the subsurface while a village corporation owns the surface. The Council Native Corporation (CNC) owns the surface on lands specific to the Council Property. Since 2008, Millrock has been negotiating annual surface use agreements with the CNC.

Millrock has also made an Option to Purchase agreement with the owners of the Albion Property. The Albion claims are located immediately adjacent to the Council land block subject to the BSNC agreement described above. The Albion block consists of 51 State of Alaska claims covering 2,231 hectares. Millrock may purchase 100% interest in the claims by paying the owners 500 ounces of gold bullion in annual installments and by making a minimum of US$250,000 in exploration expenditures by the end of 2012. Other Terms include:

NSR 2.5% on gold and silver payable from production. This may be reduced to 1.0% by paying the owner 2,000 ounces of gold bullion
Advanced minimum royalty of 100 ounces of gold bullion payable annually until commercial production occurs. The advanced minimum royalty can be credited against the production royalty.

As a result of reconnaissance surveys performed during the 2009 field season, Millrock has staked 123 State of Alaska Mining claims covering approximately 8,000 hectares. These claims are collectively known as the Warm Creek claims and are located adjacent to the Council and Albion land blocks.

Millrock has since entered an exploration agreement with Kinross Gold Corporation. The agreement pertains to a 900+ square kilometer Area of Interest that includes the Albion and Council properties as well as the Warm Creek claims. The agreement states:

Kinross can earn a 55% interest in properties secured in the Area of Interest by incurring US$3 million in exploration expenditures and paying Millrock a total of US$260,000
US$500,000 minimum exploration expenditure in 2010 and initial cash payment of US$65,000
Provision for a private placement financing of C$250,000 in which Kinross will purchase shares of Millrock based on a 20-day moving average of Millrock's market share price
Kinross may elect to increase its interest to 75% by making a further US$3 million exploration expenditure
Millrock will be the project operator for 2010 and thereafter at Kinross' discretion

Bedrock geologic units in the Council area are primarily part of the Precambrian to Paleozoic, blueschist-facies metamorphosed Nome Group. Along the northern edge of the Council map, amphibolite-facies rocks (including staurolite schist, and undifferentiated pelitic schist and arc-related amphibolite) are present in high-angle-fault contact with the Nome Group along the south side of the Bendeleben Mountains. Although these rocks are higher in metamorphic grade, their protoliths may be equivalent to those of the Nome Group. Minor Cretaceous to Quaternary alkali gabbro dikes and Cretaceous syenite dikes are the only other rocks that crop out in the project area.

In the Council area, low-sulfide, gold-bearing, quartz ± arsenopyrite ± stibnite ± iron sulfides ± white mica ± graphite ± carbonate ± plagioclase veins are preferentially hosted by graphitic ± calcareous ± pyritic schist and quartzite in the Mixed Unit. The Mixed Unit is spatially predominant in the project area. Larger deposits occur in shear structures and in brittle rocks. The contact with an overlying marble unit is a favorable deposition site.

A placer operation at the head of Albion Creek historically mined what appears to be a residual lode deposit. A large soil geochemical anomaly surrounds the old placer workings and is centered on a northwest trending structure. The gold-arsenic anomaly measures 900 meters by 2,000 meters. The dimensions of the anomaly and favorable geologic setting at the Albion property indicate a potential for a large deposit.

Exploration Program: The 2010 exploration program will consist of the following activities:

Initial drill test of established geochemical anomalies at the Albion Property
Trenching may be carried out on targets of interest
Detailed soil geochemical surveys to follow up and expand existing anomalies
Conduct reconnaissance soil and stream sediment geochemical surveys on areas without coverage
Compile project data into a GIS environment including the capability of 3D viewing of surficial and drill hole geology and geochemistry

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