The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Junior adds four substantial properties across state; inks new pact with Bering Straits Corp. and gears up for busy 2008 season
Millrock Resources Inc. has added four significant Alaska gold properties to its portfolio in preparation for substantial exploration in 2008.
Millrock is currently working on its 2008 exploration budget, but early estimates are that the company will spend between $3 million and $4 million on its Alaska properties this year. The bulk of the budget will be applied to exploration at the Ketchem, Estelle and Divide properties, Millrock President Greg Beischer told Mining News April 22.
In late March the Vancouver, B.C.-based junior announced that it acquired the Ketchem gold property located about 190 kilometers or, 120 miles, north of Fairbanks. The company also entered an agreement with International Tower Hill Mines Ltd. on that company's Estelle high-grade gold property in Alaska's Rainy Pass district about 160 kilometers, or 100 miles, northwest of Anchorage.
The most recent addition to the Millrock portfolio is a 395-square-kilometer, or 153-square-mile, land package on Alaska's Seward Peninsula east of Nome.
Millrock April 23 said it signed an exploration agreement with Golden Glacier Inc., a subsidiary of Alaska Native regional corporation Bering Straits Native Corp. on lands located along the southern shore of the Seward Peninsula. The company said the lands are "highly prospective for intrusive-related and metamorphogenic, structurally controlled gold deposits."
There are three areas - Council, Bluff and Ungalik - in which Millrock is primarily interested.
The Council district has historically produced more than 1 million ounces of placer gold, and is readily accessible by road from Nome. The Council property that is under the exploration agreement has known gold vein occurrences, but limited exploration has been conducted there since the late 1980s. Millrock said it will use geological, geophysical and geochemical methods to target sites that have the potential to host large stockwork vein systems.
The Bluff prospect is located about 24 kilometers, or 15 miles, east of the Big Hurrah deposit, which NovaGold is exploring for additional gold ore to process at its new Rock Creek Mine.
Millrock said the gold mineralization at Bluff occurs within an anticline and stretches over a distance of 6.4 kilometers.
During its exploration of the Bluff property in the late 1980s, BHP Billiton intersected 5.48 grams per metric ton of gold over 10.9 meters; 4.19 g/t gold over 4.5 meters; and 1.93 g/t gold over 16.3 meters. The downstream placer deposit has historically produced more than 100,000 ounces of gold.
The Ungalik land package is centered on the source rocks of a placer deposit that has produced more than 300,000 ounces of gold. No lode exploration has occurred on this property since Bering Straits acquired the property 36 years ago.
Millrock said the property has the potential for large scale, intrusive hosted gold deposits.
Millrock has a five-year exploration agreement with Golden Glacier that calls for a total of $4 million in spending by the junior. The expenditures include work commitments, cash payments and shares of Millrock stock. The company also agreed to grant preference to Bering Straits' subsidiaries and hiring preference to the corporation's shareholders. Bering Straits also has the option to become a 10 percent participating partner in any mine development related to the agreement. Millrock also has the option to lease the land at any time during the agreement.
"When Native land claims were settled in Alaska 36 years ago, BSNC wisely selected lands in the source areas of some of Alaska's largest and richest placer gold deposits," Beischer said.
Millrock takes first look at Circle Mining District
Millrock's newly acquired Ketchem gold property is located in Alaska's Circle Mining District, an area with a placer mining history that spans more than a century. The Circle district has produced more than 1 million ounces of gold but has seen limited exploration for its hard rock potential.
The 5,000-plus acre Ketchem gold property is subject to an option agreement with Spectrum Resources Inc. In its agreement with Spectrum, Millrock has the option to purchase a 100 percent interest in the property for $1.5 million. To keep the option open, Millrock will expend $3 million in exploration over four years, and make cash payment of $200,000. Spectrum will receive 160,000 shares of Millrock's common shares during the term of the option. Spectrum also will retain a 2.5 percent royalty, but Millrock can reduce the royalty to 0.5 percent by paying Spectrum $3 million.
Significant widths of gold mineralization indicate potential for a bulk mineable target, and the prospect is virtually untested," Beischer observed.
Silver Chalice and 88 prospects
The Ketchem property hosts several prospects, including 88 and Silver Chalice - two prospects that stand out and will be a focus of early exploration, Millrock said. Previous surface exploration on the property identified three structurally controlled zones of gold-bearing quartz, and stockworks have been identified at the 88 Prospect. These zones range between three and 25 meters in width. One zone is reported to grade as high as 8.92 g/t gold over a width of 4.6 meters. Grab samples up to 36 g/t gold have been reported from the prospect.
Gold mineralization at the Silver Chalice prospect occurs in quartz - sulfide veinlets in altered sedimentary rocks. Grab samples have returned values up to 32.0 g/t gold.
Millrock said the property is a bulk mineable target with excellent logistics, and that it plans an aggressive exploration campaign on the property in 2008.
Two nearby communities have airstrips in the area. Arctic Circle Hot Springs is about 10 kilometers, or six miles, away, and Central is about 29 kilometers, or 18 miles, away. Fairbanks is about 225 kilometers, or 140 miles, to the southwest and can be reached via the state-maintained Steese Highway.
Millrock adds Estelle to portfolio
The Estelle high-grade gold property is another recent addition to Millrock's portfolio. The company announced on April 9 that it had reached an agreement with International Tower Hill Mines Ltd. on the 25,000-plus-acre property.
Under terms of the agreement, Millrock will assume all of the obligations of International Tower Hill's subsidiary, Talon Gold, under a May 29, 2007 option agreement with Hidefield/Mines Trust on the Estelle property. This gives Millrock the opportunity to earn an 80 percent interest in the property. In exchange Millrock issued Talon Gold 650,000 common shares on April 21; the shares are on hold and cannot be traded until August 15. Talon Gold will retain a 1 percent net smelter return royalty on production from the property.
Shoeshine and Train prospects
Hidefield discovered two interesting prospects, Shoeshine and Train, during its 2006 and 2007 exploration seasons at Estelle. Beischer said these prospects could be two parts of the same mineralized trend. Shoeshine averaged 5.29 g/t gold out of 58 samples and Train averaged 7.61 g/t gold out of 83 samples, he said.
Though high-grade gold veins can be found throughout most of the property's 160 Alaska state mining claims, Millrock said it is targeting bulk tonnage intrusive-related gold deposits at Estelle. The high-grade gold veins at Shoeshine are associated with porphyritic intrusives rocks, quartz stockworks and hydrothermal breccias, which make it an excellent bulk-mineable target. The company interprets the vein systems as symptoms of a larger deposit.
Millrock's exploration plan for 2008 includes detailed mapping, soil sampling and drilling. The drill program will target the Shoeshine and Train prospects.
Millrock benefits from ITH rationalization
International Tower Hill said that it remains encouraged by its findings at Estelle and that the agreement with Millrock will allow the company to benefit from Millrock's future success on the property.
International Tower Hill's decision to sell Estelle is part of the company's portfolio rationalization plan for 2008. This plan calls for the company to concentrate on its major resources expansion drill program at the Livengood project, carry out aggressive exploration programs on its Chisna and BMP projects, and continue to explore its Bullfrog property in Nevada. Meanwhile, International Tower Hill will be looking to option out the remaining properties in its portfolio, the company said.
"International Tower Hill's portfolio rationalization has resulted in a great opportunity for Millrock. We plan to begin drilling the property in July," Beischer said.
Mid-May drilling planned for Divide
Millrock also will join its 50-50 partner Alix Resources Corp. in a $1.5 million exploration program at the 3,519-acre Divide gold property, located about 45 kilometers, or 28 miles, north of Nome, in 2008. The aggressive program, which is scheduled to begin in mid-May, will include mapping, 1,800 meters of core drilling, 3,600 meters of reverse circulation drilling, as well as trenching and sampling.
The partners had originally planned to complete a ground magnetic survey of the property, but found that records from past airborne magnetic surveys performed by the State of Alaska supplied sufficient data to identify prospective structures on the property, Beischer said.
The initial target for exploration this year will be the Stoneman prospect. At this location, visible gold is observed at surface in talus and weathered, broken bedrock. Further along strike, previous trench sampling returned values of 16.21 g/t gold over 16.76 meters. However, drill holes immediately undercutting the trench did not provide results of similar magnitude.
To resolve the discrepancy and to expose the mineralization for thorough observation and evaluation, Millrock will excavate a large trench or open cut. The partners will follow up with a close-spaced RC drill program to determine if a high-grade chute is present in the vein system.
"The Divide Project offers an excellent opportunity to develop a high-grade, near-surface gold resource, said Philip St. George, Millrock's vice president of exploration.
Three claim blocks in Fortymile District
Millrock also acquired mineral rights to nearly 20,000 acres in the Fortymile Mining District about 100 kilometers, or 60 miles, north of Tok.
The Fortymile gold properties are divided into three claim blocks: The 11,200-acre Steele Dome property, the 7,360-acre Chicken property, and the 1,120-acre Napoleon property. All three blocks are composed of state mining claims.
Millrock, which announced the acquisition of the claims in February 2008, has only completed limited reconnaissance stream sediment and rock sampling on the road accessible portions of the claims so far. Of rocks the geologists picked up, one quartz monzonite sample contained 3.54 g/t gold and14 g/t silver, and a quartz vein sample revealed 2.04 g/t gold and 232 g/t silver.
During the 2008 exploration season, the company plans to carry out an extensive biogeochemical survey; mapping, and trenching where it is feasible; and depending on the results, the junior may begin drilling late in the season. During its earlier limited exploration, Millrock geologists uncovered a gold and arsenic stream sediment anomaly and that area also will be targeted for grid sampling this year.
Millrock will not pursue Inmachuk
Millrock announced on March 28 that after reviewing the assay results from 644 meters of drilling during 2007 exploration at the Inmachuk property, it has decided not to renew its joint venture agreement with Full Metal Minerals on the property.
Immachuk lies about 120 kilometers, or 75 miles, south of Kotzebue.
According to Full Metal, the 10,700- acre property also hosts an early stage lode gold target, which has been outlined by a 1.8-kilometer-, or 1.5-mile-, long gold-arsenic-antimony soil anomaly that is associated with placer gold producing tributaries in addition to carbonate-replacement style silver-zinc-lead mineralization.
Millrock's exploration concentrated on zinc-lead-silver targets. "Based on the results to date, it would appear that there is relatively low potential for discovery of a base metal deposit that would have sufficient grade and tonnage to warrant mine development," the junior said in a statement.
Pipeline projects target of future drilling
Millrock said it also will complete reconnaissance work at its Iliamna porphyry copper-gold property located about 50 kilometers, or 31 miles, northeast of the huge Pebble deposit.
The junior said Iliamna, Fortymile, and the Bering Straits properties are all considered 2008 pipeline projects. While the bulk of its drilling will take place at Estelle, Ketchem and Divide; the exploration conducted this year on the three pipeline projects will determine whether they will warrant expanded exploration in the latter part of 2008 and/or 2009, Millrock added.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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