The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Partners spend $10M on Alaska gold, copper discoveries made by junior
Millrock Resources Inc. is artfully implementing the science of making grassroots gold and copper discoveries, proving the promise of these new finds and vending the prospects to other companies to do the heavy lifting of defining a deposit.
This business model is paying off for the project generator. Some US$11 million is being spent on exploring its Alaska copper and gold prospects in 2011, with nearly US$10 million funded by its project partners.
Senior miners Teck Resources Ltd. and Kinross Gold Corp. are amongst the companies Millrock has attracted the project its has generated in Alaska. Additionally, junior explorers Crescent Resources Corp., Brixton Metals Corp. and Ryan Gold Corp. have forged deals on Millrock properties across the state.
Millrock also said it invested about C$1 million in regional project generation in 2011 and staked seven new properties that it may soon offer to other companies for earn-in agreements. Work also continued on existing projects for which Millrock has not yet secured an earn-in partner. For these projects, such as Fortymile, a gold project situated in a historic placer gold mining district at the border with the Yukon Territory, Millrock has developed numerous drill-ready targets.
"We have at least a dozen projects in the state; about half of them are presently optioned off to mining companies and junior mining companies," Millrock President and CEO Greg Beischer told Mining News.
Aside from Alaska, Millrock geologists have generated copper-gold prospects in Arizona. Partners Vale Exploration Canada Inc. and Inmet Mining Corp. are spending more than US$5 million on exploring these potentially large porphyry projects.
Teck steps up at Estelle
The most exciting of this year's exploration programs on Millrock properties in Alaska may be at Estelle, the project generators flagship project situated about 160 kilometers (100 miles) northwest of Anchorage.
Though Teck has until the end of 2012 to earn its initial 55 percent interest in Estelle, the Vancouver B.C.-based miner stepped up its budget for 2011 exploration at the expansive project to US$3.46 -enough to earn this preliminary stake.
"We were really pleased when Teck stepped up to the plate with what I consider to be a very substantial budget for a first-pass drilling program," Beischer said.
The four-hole, 1,500-meter drill program - which was kicked off in early August - provided for the first drilling at Estelle since the project generator picked up the expansive property in 2008.
"We have held off on drilling for two years to carry out a comprehensive, systematic, surface exploration program to select the best possible, well-defined drill targets," Beischer said.
This boots on the ground exploration indicates that large, bulk-minable, intrusive-related or porphyry-style gold deposits could be lurking below the surface at Estelle.
Though Estelle lies in the heart of the Kahiltna Terrane - an assemblage that hosts enormous copper-gold deposits such as Northern Dynasty Ltd. and Anglo American plc's Pebble project and Kiska Metal Corp.'s Whistler property - the primary metal here seems to be gold.
Seven main gold zones - Shoeshine, Shadow, Discovery, Train, Oxide Ridge, RPM and Stoney - have so far been identified across the 246-square-kilometer (95-square-mile) land package.
Shoeshine and Oxide Ridge have been the primary focus of past exploration by Millrock.
Both prospects were identified by sampling the broken rocks collected at the base of steep slopes characteristic of this region of the Alaska Range. Testing this talus helped geologist dial in on the source of the gold-bearing rocks collected in the rubble that had eroded from the bedrock.
One of the holes drilled this year was at Shoeshine, a zone found in the southern portion of the claim block. Sampling conducted by Millrock geologists here in 2009 and 2010 has outlined a 300- by 1,000-meter anomalous zone.
The average grade of 49 samples collected from the rubble field in is 0.585 g/t gold. One sample of porphyry rock cut by sheeted quartz veinlets returned assays of 13.13 g/t gold. Numerous talus samples with grades in the 3 g/t to 5 g/t range also were collected.
Though assays are still pending, Millrock said arsenopyrite, chalcopyrite, pyrite and other sulfide phases were intersected over wide zones in the one hole drilled here.
The nearby Shadow and Discovery prospects were each tapped with one drill hole this year.
Historical exploration by Teck at Shadow includes a drill intersection of 3 g/t gold over 29.6 meters and a chip sample grading 18 g/t gold over 9.9 meters.
Millrock geologists believes Shoeshine and Shadow may be part of the same mineralizing system gold mineralized system stretching at least 1,000 meters.
Oxide Ridge, a prospect some 20 kilometer (12 miles) north of Shoeshine, was the target of one of the holes drilled in 2011. The average grade of 24 talus fines samples collected here in 2008 is 2.32 g/t gold. Millrock geologists had narrowed down the bedrock source of the gold mineralization found in the talus, providing a target for this year's drilling. Millrock said sulfide mineralization was observed over the entire 450-meter length of the hole with locally more intensely mineralized zones. Assays are still pending at the time of this report.
In addition to accelerating the exploration program at Estelle, Teck has increased its ownership of Millrock in 2011 to around 3.9 percent through an early exercise of warrants it acquired as part of the May 2010 Estelle option agreement .
Upcoming Kahiltna projects
Millrock has generated additional gold and copper prospects in the Kahiltna Terrane, including Cristo claims, a large group of claims east of Estelle beyond Kiska's Whistler property.
This land package is anchored by Monte Cristo, a large tonnage intrusive-related gold deposit or gold-rich porphyry prospect, and St. Eugene, a prospect that hosts a copper-gold-molybdenum porphyry system initially discovered in the 1970s.
Over the course of the 2009 and 2010 field seasons, Millrock geologists collected 80 rock samples and 213 soil samples at the Cristo claims.
Rock and soil samples have outlined a 700-meter-long zone at St. Eugene with rock samples up to 1 percent copper and 2.1 grams per metric ton gold.
At Monte Cristo, rock samples with grades up to 4.2 g/t gold and talus fines samples returning assays up to 3 g/t gold Millrock geologists have outlined mineralized zones on two ridges about 300 meters apart. The glacial debris area between these zones has yet to be tested.
Brixton -which hammered out a final option agreement on the Cristo claims in October, 2010 - can earn a 100 percent interest in the property by spending US$5 million on exploration, paying Millrock US$330,000 and issuing 2 million Brixton shares and million purchase warrants with an exercise price of C$1 per share.
Brixton originally planned to drill Cristo this year but has opted instead to carry out additional mapping and geochemical surveys. In order to extend its option on the property, Brixton issued Millrock an additional 500,000 warrants.
Revelation, an intrusive-related gold prospect about 30 kilometers west of Estelle, is a third project Millrock has generated in the Kahiltna Terrane.
Uncle Sam gets its share
Drilling at Millrock's Uncle Sam property in Interior Alaska has the appearance of being an extension of the gold-rich zone discovered by Sumitomo Metal Mining at its Stone Boy prospect immediately to the south.
Crescent Resources, which optioned Uncle Sam from Millrock late in 2010, kicked off the 2011 program at Uncle Sam with an early season an auger program designed to pull soil samples from the horizon beneath a thick cover of overburden. Additionally, the partners opted to carry out geophysical surveys to refine targets below this frozen blanket of windblown silt that covers the property situated some 65 kilometers (40 miles) southeast of Fairbanks.
The partners used this initial data to target a 2,100-meter core drilling program at the Wolf and Lone Tree prospects.
All four holes drilled at Wolf cut gold mineralization. WLF-001 cut 2.74 meters averaging 3.63 g/t gold, WLF-002 cut 11.46 meters averaging 4.86 g/t gold, WLf-003 cut 3.05 meters averaging 3.27 g/t gold and WLF-004 cut 2.13 meters averaging 1.81 g/t gold.
Five holes drilled at Lone Tree, which is located northwest of Wolf in the northern part of the Uncle Sam, targeted a strong gold-in soil anomaly that measures approximately 4,000 meters in length and up to 1,000 meters wide, was designed to expand upon the area of gold mineralization.
USC-011, drilled by Kennecott Exploration in 2001, cut 19.22 meters averaging 2.03 grams per metric ton gold here.
The exploration at Uncle Sam is being funded by Crescent and managed by Millrock is managing the exploration.
Crescent has an option to purchase a 100 percent interest in Millrock's rights to the property subject to a royalty. Millrock presently owns approximately 5 percent of the issued and outstanding common shares of Crescent.
Kinross drills Humble
Kinross, another major that has teamed up with Millrock to explore Alaska, is currently estimated to spend around US$1.5 million on exploration at the newly acquired Humble property in Southwest Alaska and another US$400,000 at the Council gold project on the Seward Peninsula.
At Humble, formerly known as the Kemuk prospect, the partners have carried out a soil sampling and induced polarization geophysical surveys in preparation for a small drill program that started in mid-August.
"It is just the very first phase, but it is pretty exciting when you think about what could be there," Beischer said.
Humble Oil Company originally investigated this property for its iron potential, due to its extremely strong magnetic signature.
Core from this late 1950s drilling - stored in a facility in Southcentral Alaska - has provided Millrock geologists with a peek at what lies below the surface at Humble.
"What we know of the geology, it is really reminiscent of the Pebble deposit. We have got a strong geochemical anomaly. We have got ZTEM geophysical anomalies that are coincident with the geochem, and we know by the little bit of drilling that was done by the Humble Oil Company back in the 1950s that the right kind of rocks are down there," Beischer told Mining News.
In a September update, Millrock reported that while the surface work at Humble went well, drilling at the porphyry copper-gold prospect has been problematic, leaving some question whether the 2011 program would produce drill core for analysis.
In 2010, Kinross and Millrock struck a deal in which the major has the option to earn a 60 percent interest in an area of interest, which includes the Humble claim group, in return for spending US$4 million in exploration expenditures by the end of 2013, paying the project generator US$200,000 and reimbursing the junior for staking the claims. Kinross has the option to increase its ownership of the copper-gold prospect by incurring an additional US$6 million in exploration expenditures by the end of 2016.
Millrock is currently managing exploration at Humble, a duty Kinross may elect to take over at any time.
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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