RSD at Beaver Creek Interview Series: Millrock Resources (TSX-V: MRO) CEO Greg Beischer
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Millrock Resources (TSX-V: MRO)(OTC: MLRKF), Mr. Greg Beischer. Greg, how the heck are you?
Greg Beischer: Doing great, Gerardo. It's great to be here in Beaver Creek. What a wonderful destination.
Gerardo Del Real: It's gorgeous. We're here at the 2019 Beaver Creek Precious Metals Summit. You've been quite the traveler lately. You were in Australia. I know you were in Alaska recently. I want to get to each of those places because you weren't out there on vacation. You were working.
Greg Beischer: Indeed.
Gerardo Del Real: Tell me a little bit about Australia. How was that?
Greg Beischer: Sure. Interesting, because I was at the Sprott Natural Resources Conference in Vancouver. Excellent show as always, but I'll tell you the investors were pretty down and out, surprisingly because gold has risen up.
But I went immediately to the Diggers and Dealers Conference in Kalgoorlie, Western Australia, and, man, what a contrast! You wouldn't believe it. Money is flowing freely there. Everybody's happy and enthusiastic.
Gerardo Del Real: Healthy balance sheets.
Greg Beischer: Gold in Australian dollars is $2,300, $2,400 an ounce. They're producing it at $1,000 an ounce. They're making money hand over fist and they're looking for places to deploy it. We had noticed a lot of incoming capital into my home state of Alaska. So I went there to see if I could a round up some funding for the great projects we've developed at home.
Gerardo Del Real: That is not inconsequential – the healthy balance sheets that the Australians currently have and they're enjoying – because they are deploying that capital. We've seen it in the past 12 months. I saw it last year, where there were a lot of interest in some of the smaller exploration companies. And they've been amongst the most aggressive investors and speculators in our space.
Let's talk about Alaska. You have what I believe is going to become a district play, a camp play. I'll be very honest. We had very frank discussions about the latest financing. I was not a fan of the dilution. We had a very honest conversation about what you would do with the money. I'll say, after our conversation, I was left satisfied that the dilution would be worth it for shareholders.
Tell us a little bit about the land position and what's shaping up to be a modern day gold rush up there.
Greg Beischer: Sure thing. So as you know, the Pogo Gold Mine in the Goodpaster District has been a great producer for Japanese company Sumitomo for many years. But Northern Star Resources, an up and coming, aggressive mining company out of Australia, bought the mine, and they're going to make a fortune with it. Let me tell you.
Gerardo Del Real: It was a heck of a deal for them.
Greg Beischer: Yup. They were actually awarded Dealer of the Year at Diggers and Dealers, for that acquisition, and I just think they're going to do so well. They're clearly an excellent mining company, but they're also excellent explorers and they made new discoveries already in the less than a year that they've owned the mine.
So one of these new discoveries is well west of the mine, and we own claims west of the mine. So we don't know a whole lot about the deposit that they've discovered, but they're clearly delineating a deposit.
They're drilling multiple holes all over it, and they're marching their way ever closer to our claim block. I was there last week. I flew our entire claim block, which is 660 square kilometers. It's a huge tract of land, but it was really exciting to see their line of drills, lined up about 450 meters off our claim boundary, pounding at these holes, moving southwestward, towards our claim block. So that's extremely exciting.
We did raise money. We are deploying that cash. We've done two lines of a specific geophysical survey called CSAMT, same exact survey that Northern Star had used just across the boundary, to detect their Goodpaster deposit, one they're drilling off now. And I can tell you last night we received the very first preliminary results from the first line. We see in that data what we were hoping and expected to see. So we have a really, really compelling drill target there, at West Pogo now.
But I'm so excited about the whole block. You know, Millrock staked such a large tract – owing to our database, which probably costs $15 million to produce years ago, but which we bought for fractions of a penny on a dollar five years ago. It's really paying off now, because we have staked out some excellent, excellent prospects on top of this immediately obvious drill-ready target.
Gerardo Del Real: Let me ask you a question that I know shareholders, including myself, would want me to ask. How do you make it a point to advance such a large land package without doing one of two things, diluting the share structure significantly, where you cap the upside, and/or not give away a large portion of the land position and a large interest in it and maybe missing out on a couple of significant discoveries? Right? Because it's a balancing act when you're a junior explorer, a project generator with a small market cap.
Greg Beischer: Well, a balancing act is exactly what it is. That's the perfect word for it. We're faced with several questions that are just about in front of us at this point. In some ways, Millrock would be better to bide its time, wait and see what Northern Star's really discovered across the boundary and that way better be able to price the value that we would put on our project.
Gerardo Del Real: Sure.
Greg Beischer: Alternatively, we could raise more money and drill the target ourselves. That would be somewhat of a departure from our business model, although I think I could say that, “Well we're still going to ultimately make a deal on this project. We're just taking this one further than we normally would.”
But it is a balancing act because we'd have to issue a lot more shares to raise $3 million Canadian dollars to give it a proper drill test. So I don't know which way Millrock is going to proceed just yet. We're going to wait until we get all our data.
In the meantime, we've got a steady stream of Australian companies coming to look at our project and to see if they can make a deal with us. But I tell you, we're not going to give this one away. We know we've got a tiger by the tail. We may have an ore body coming right onto our property without even having done much to find it.
Gerardo Del Real: And it sounds like you're not short on options.
Greg Beischer: No, we have several options. But they're tough choices, because it could make a great big difference in the long-term valuation of Millrock.
Gerardo Del Real: Sure. A potential company maker. Excellent.
Elsewhere, I know you still have interest in Mexico. Can we talk about that?
Greg Beischer: Yes. Not too much though. We sold a lot of our projects to Riverside Resources, creating ourselves royalty positions in those projects. So that's good. The idea was to retrench, refocus only on Alaska, but we've kept one particular project, El Batamote, a copper porphyry target. Watch for news on that soon.
Gerardo Del Real: Excellent. Greg, thank you so much for the update. Appreciate it.
Greg Beischer: My pleasure, Gerardo, always.
Gerardo Del Real: Thank you. All right.