Millrock and Vale enter option agreement concerning the AUDN copper-gold Porphyry project, Alaska
VANCOUVER, BRITISH COLUMBIA–(Marketwire – June 11, 2012) – Millrock Resources Inc. (TSX VENTURE:MRO) ("Millrock" or the "Company") announced today that it has entered into an option agreement with Vale Exploration USA, Inc., a wholly-owned subsidiary of Vale S.A. ("Vale"). The agreement is being entered pursuant to the strategic alliance agreement between Vale Exploration Canada Inc, a wholly-owned subsidiary of Vale S.A. and Millrock made October 11, 2011 (see press release dated October 17, 2011: http://millrockresources.com/news/millrock_and_vale_form_strategic_alliance_for_copper-gold_porphyry_dep/). The objective of the alliance is to discover large-scale copper – gold porphyry deposits in target zones of Alaska identified by Millrock. This is the first "Designated Project" under the strategic alliance agreement.
The subject of the new option agreement is the AUDN project, a promising porphyry copper-gold target situated approximately 100 km southwest of the world-class Pebble deposit. The Millrock claim block is situated along a trend of porphyry occurrences. Aeromagnetic, gravity and radiometric potassium survey data indicate possible buried, mineralized intrusions within the AUDN project area. Millrock and Vale plan to carry out geophysical and geochemical surveys in 2012.
Under the terms of the option agreement, Vale may earn a 65% interest by expending US$3.5 million for exploration on the project over a three-year period and by paying Millrock US$200,000. Upon earning its initial interest, Vale may elect to carry the full cost of further exploration and development until a feasibility study has been completed, and thereby earn an additional 10% interest, for a total 75% joint venture interest. Further development of the project would proceed with the parties contributing on a pro-rata basis. In the event that a joint venture party dilutes below a 10% interest, such interest would convert to a Net Smelter Returns royalty of 2% on gold, silver, platinum, palladium and rhodium and 1% on all other metals.
Under the terms of the strategic alliance agreement, Vale is providing funding to Millrock for research and early-stage exploration to identify targets that may be nominated for Designated Project status. The work is focused on specific, defined areas of interest in the Alaska Range and Alaska Peninsula porphyry belts. Strategic Alliance funding consists of a minimum US$1.0 million in the first year, and a further US$1.0 million at Vale's option in the second year. Funding for the strategic alliance may continue in subsequent years at funding levels to be determined between the parties.
Initial investigations carried out by Millrock in 2010 were done with funding that Millrock received under a separate strategic alliance with Altius Minerals Corporation (TSX:ALS) ("Altius"). By virtue of that agreement Altius is entitled to a royalty on any mineral production that occurs from most of the claims comprising the AUDN project.
About Millrock Resources Inc.
Millrock Resources Inc. is a premier project generator to the mining industry. In the search for world-class gold and copper deposits in mineral rich Alaska and Arizona, 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 and attendant shareholder dilution taken on by most exploration companies. Millrock currently has twelve active exploration projects, eight gold-copper properties in Alaska, and four porphyry copper prospects in Arizona. With funding primarily coming from its joint venture partners, Millrock plans to carry out exploration programs with a total value of more than US$10 million in 2012. Business partners of Millrock include some of the leading names in the mining industry: Kinross, Teck, Vale, Inmet and Altius, as well as junior explorer Crescent Resources.
About Vale S.A.
Vale is the second-largest metals and mining company in the world and the largest in the Americas based on market capitalization. It is the world's largest producer of iron ore and iron ore pellets and the world's second largest producer of nickel and is one of the world's largest producers of manganese ore and ferroalloys. Vale also produces copper, thermal and coking coal, phosphates, potash, cobalt and platinum group metals.. To support Vale's growth strategy, the company is actively engaged in mineral exploration efforts in 24 countries around the globe.
ON BEHALF OF THE BOARD
Gregory Beischer, President & CEO
Some statements in this news release contain forward-looking information, including without limitation statements as to the planned 2012 exploration program and budgets for Millrock's exploration efforts in Alaska and Arizona. 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.
"NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE."
Millrock Resources Inc.
Gregory A. Beischer
(604) 688-9620 (FAX)