VANCOUVER, BRITISH COLUMBIA, May 24, 2017 - Millrock Resources Inc. (TSX-V: MRO, OTCQX: MLRKF) ("Millrock" or “the Company”) announces that it has sold its Stellar copper-gold project to Vista Minerals Pty Ltd (“Vista”). The project is located in central, Alaska 15 km north of the Denali Highway and 150 km west of the town of Cantwell. Previously, Vista was earning an 80% joint venture interest in the project under an agreement previously announced here. This agreement is now terminated. The consideration paid to Millrock is 25,140,064 Vista shares which represents approximately 27.7% of the company. Vista and Millrock have also agreed to immediately enter into an agreement with Coventry Resources Limited (“Coventry”). Coventry owns an option on the adjacent Caribou Dome project upon which Coventry has reported a high-grade copper resource that is described in this Coventry press release.
Under the second agreement, Vista shareholders, including Millrock, will exchange their Vista shares for Coventry shares. Coventry has indicated its intent to, in the same transaction, raise AUS$10.0 million in an equity financing, and then immediately consolidate its shares on a 1 for 5 basis. Following the transaction, the company will be renamed Polaris Minerals Limited (“Polaris”). Coventry must obtain shareholder approval for the transaction. Millrock must agree with the terms of the equity financing that Coventry will undertake, and can withdraw if the terms are not satisfactory.
Under the terms of the planned transaction, Millrock will have:
- Shares: Millrock will be issued 128,269,838 pre-consolidation Coventry shares that will convert to 25,653,968 Polaris post-consolidation shares after the name change. If AUS$10 million is raised in the planned equity financing Millrock will own 9.03% of the post-transaction issued and outstanding shares of Polaris.
- Milestone Payments: If Polaris, at any time prior to the end of 2032, establishes an Indicated Mineral Resource (using the Australasian Joint Ore Reserves Committee Code - “JORC Code” - definition) of one million ounces of gold within the Stellar property area of interest, it will pay Millrock US$1,000,000, and in the same period, if Polaris establishes a JORC Code Indicated Mineral Resource of one million tonnes of contained copper or copper equivalent within the Stellar property, Polaris will pay Millrock US$2,000,000.
- Royalty: A 1% Net Smelter Returns royalty on all metals which will vest upon closing of the transaction.
- Advance Royalty: Polaris will pay advance royalty payments to Millrock in accordance with the following schedule:
- US$20,000 March 31, 2019
- US$25,000 March 31, 2020
- US$30,000 March 31, 2021
- US$35,000 March 31, 2022
- US$40,000 March 31, 2023
- US$45,000 March 31, 2024
- US$50,000 March 31, 2025
- US$55,000 March 31, 2026
- US$60,000 March 31, 2027, and each year thereafter until commercial production occurs. Polaris may recoup advance royalty payments from production royalty payments.
- Operator & Fees: Millrock will be the exploration operator and will be entitled to a management fee calculated as 10% of expenditures.
A further description of the transaction, the combined property position and the financing can be found in the press release made by Coventry here.
Millrock and Coventry have planned a major exploration program for summer 2017, in which the Zackly high-grade copper-gold skarn will be re-drilled in an attempt to confirm the historic resource, and to test for extensions of the known deposit. Induced polarization surveys done by Vista, and soil geochemical surveys conducted previously by Millrock, indicate potential for these extensions to exist. Information on the Zackly skarn can be found on the project description on Millrock’s website here.
In the event that the agreement between Vista and Coventry does not proceed, then Millrock and Vista will enter an agreement whereby Millrock will own a 19.9% interest in Vista and be entitled to the same milestone and royalty payments described above. Vista would be required to spend a total of US$4.0 million on the Stellar project claims.
The technical information within this document has been reviewed and approved by Gregory A. Beischer, President, CEO and a director of Millrock Resources. Mr. Beischer is a Qualified Person as defined in NI 43-101.
About Millrock Resources Inc.
Millrock Resources Inc. is a premier project generator to the mining industry. Millrock identifies, packages and operates large-scale projects for joint venture, thereby exposing its shareholders to the benefits of mineral discovery without the usual financial risk taken on by most exploration companies. The company is active in Alaska, British Columbia, the southwest USA and Sonora State, Mexico. Funding for drilling at Millrock’s exploration projects is primarily provided by its joint venture partners. Business partners of Millrock have included some of the leading names in the mining industry: Centerra Gold, First Quantum, Teck, Kinross, Vale, Inmet, Altius, and Riverside.
ON BEHALF OF THE BOARD
Gregory Beischer, President & CEO
FOR FURTHER INFORMATION PLEASE CONTACT:
Melanee Henderson, Investor Relations
(877) 217-8978 (toll-free)
Millrock Resources Inc.
2300-1177 West Hastings Street
Vancouver, British Columbia
Some statements in this news release contain forward-looking information. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include without limitation the completion of planned expenditures, the ability to complete exploration programs on schedule and the success of exploration programs.
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