Millrock Stakes Goodpaster Claims Via EMX Funding

Millrock reported that it has staked a large, contiguous block of claims in the Goodpaster Mining District. The claims are adjacent to mineral lands owned by Northern Star Resources, operator of the Pogo Gold Mine. The claims cover prospects east of the Pogo Gold Mine property (the East Pogo project) and add to Millrock’s existing land position west of the Pogo Gold Mine (the West Pogo project). The combined East and West Pogo projects cover 43 kilometers along the Pogo Trend of gold occurrences. Additionally, Millrock has also staked claims covering a 30-kilometer strike extent along the Shaw-LMS Trend. These claims cover stream sediment and soil anomalies, as well as gold prospects, that are situated on splays of the Shaw Creek fault. In total, 892 claims were staked covering 51,134 hectares, as shown in pale blue in Figure 2.

Gregory Beischer, President & CEO of Millrock commented, “We believe that the Goodpaster District will ultimately prove to be a gold mining camp of significant stature. The area has seen very little exploration despite the obvious potential and proximity to infrastructure. We have amassed a dominant land position and intend to do our best to discover one or more gold deposits on the claims we have staked.”
As of the middle of 2018, the high-grade Pogo Gold Mine had already produced approximately 3.8 million ounces of gold.

At the West Pogo project, 221 claims were staked, adding on to 141 claims that Millrock already owned, or upon which Millrock already has an option to purchase a 100% interest. The project now consists of 362 claims covering 17,591 hectares. Previous workers developed the Tourmaline Ridge (“TR”), Half-Ounce Gulch (“HOG”), and ER prospects. These three prospects contain elevated gold, arsenic, and bismuth surface soil and rock sample anomaly clusters related to northeast and northwest-trending high-angle faults. Drilling by prior operators returned gold-bearing intercepts in high-angle veins. Millrock postulates that the steep veins intersected by prior workers at West Pogo may lead to thicker, higher-grade, shallow-dipping gold veins. The schematic diagram shown below (after Twelker, 2017) illustrates that gold-mineralized high-angle veins can lead to thicker gold-bearing quartz veins within a low-angle shear zone. This is the exploration model that has been successfully applied at the Pogo Gold Mine. The Company cautions, however, that this is an exploration model used to help guide exploration. Millrock has not yet done sufficient exploration to test this model on its claims and there is no certainty that exploration will be successful in confirming this model.

Low-angle structures and Cretaceous granitic-dioritic intrusions are mapped at West Pogo, and the prospects show strikingly similar geological and geochemical attributes to the nearby Pogo Gold Mine. Geophysical surveys and drilling will be needed to determine if the high-angle veins present on Millrock’s West Pogo property lead to thicker, shallow-dipping gold-bearing vein systems.

A new discovery reported by the prior owners of the Pogo Gold Mine (the Goodpaster prospect – see “GP” on Figure 1and 2) may trend onto Millrock’s West Pogo project. Approved permit applications filed by Northern Star indicate their plans to drill very close to the shared Pogo Mine / Millrock West Pogo claim boundary.
At the East Pogo project, 403 claims covering 21,991 hectares were staked over several known prospects: Scott, Boundary, and Cal-Surf. These three prospects contain elevated gold, arsenic, and bismuth surface sample anomaly clusters related to northeast and northwest-oriented high-angle faults. Drilling conducted on the Boundary (“BD”) and Cal Surf (“CS”) prospects by previous operators intersected gold-bearing veins.

At the Shaw – Eagle – LMS trend, 268 claims were staked covering 17,231 hectares. The claims cover stream sediment, soil, and rock samples containing elevated gold, arsenic, and bismuth geochemical anomalies that appear to be associated with intrusive rocks near splays off the Shaw Creek fault.

In this campaign, the claims were staked with funding provided to Millrock from EMX Royalty Corporation, pursuant to a strategic investment.
Millrock reported that EMX has agreed to make a $1,000,000 equity investment in Millrock through a private placement financing. In return for the premium financing, Millrock has agreed to grant certain royalty interests to EMX. Millrock and EMX have agreed that the investment funds will be used in Alaska’s Goodpaster Mining District. The subscription price represents a significant premium to Millrock’s current market price.

“We are pleased to collaborate with EMX to maximize our chances of finding gold ore bodies,” said Beischer. “There has only been one exploration push in the Goodpaster District since the discovery of Pogo in 1994. It is common in productive gold mining camps that multiple deposits are discovered. So far there has only been one mine developed in the Goodpaster District. We believe Alaska’s Goodpaster area will one day become a gold mining camp of significant proportion. Millrock already owns a substantial proprietary geological database for the district and has held some key claim blocks near the Pogo Gold Mine for some years. We intend to use our database and knowledge to acquire high-potential mineral lands and to explore for gold deposits in this emerging district.”

Under the Private Placement, EMX will purchase 7,142,857 units at a price of $0.14 per unit (all monetary amounts are in Canadian dollars) for a total investment of $1,000,000. Each unit will consist of one common share of Millrock and one share purchase warrant, each entitling the holder to purchase one additional common share of Millrock until December 14, 2021 at an escalating exercise price ($0.14 until December 14, 2019; $0.17 from December 15, 2019 until December 14, 2020; and $0.20 from December 15, 2020 until December 14, 2021). Upon completion of the Private Placement, it is expected that EMX will own approximately 9.4% of Millrock’s issued and outstanding common shares, and, if EMX exercises its warrants prior to any further Millrock share issuances, would own 17.5% of Millrock’s issued and outstanding shares.

The Private Placement includes an accelerated warrant exercise provision. In the event that Millrock’s shares have traded at or above $0.20 per share for 20 consecutive trading days, Millrock may give notice that the warrants will expire if not exercised within 30 days of receipt of such notice by EMX. The Private Placement includes a partial restriction on resale of the securities (in addition to the usual Securities Act hold provision) until the first anniversary of the investment, and an anti-dilution clause entitling EMX to subscribe for additional shares in any future financings to maintain its existing percentage ownership of Millrock.

Millrock and EMX have agreed to the use of a minimum of $500,000 from the Private Placement for the acquisition of mineral rights and advancement of exploration on projects within a defined area of interest surrounding the Goodpaster Mining District. Millrock will grant royalty rights to EMX on certain existing projects and on new projects developed with the EMX funding. The amount of the royalty granted to EMX will, for claims staked on lands where no underlying royalty exists, be 1.0% of Net Smelter Returns (“NSR”). For claims staked on lands where there is an existing royalty payable to a third party, the royalty to be granted to EMX will be 0.5% NSR. The obligation to grant royalties on new projects will end when Millrock has expended $500,000 on claim staking and exploration within the area of interest subject to the investment funding. If EMX provides funding to Millrock to buy out the royalty that exists on the West Pogo optioned claims, Millrock will buy out the royalties and grant a new royalty of 1.5% NSR to EMX on such claims. Millrock has also granted EMX a right of first refusal on any future royalty financings.