Millrock Resources (TSX-V: MRO) CEO Greg Beischer on $20 Million Definitive Exploration Agreement with Resolution Minerals at the 64North Gold Project in Alaska

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, good afternoon to you. How are you today?

Greg Beischer: Good afternoon, Gerardo. Couldn't be better. Thanks very much.

Gerardo Del Real: I got to believe you're somewhere in Alaska, likely smiling. You announced today that you've entered into a definitive exploration agreement on the Goodpaster Gold Project. There's also been a name change to the project, now being called the 64North Gold Project in Eastern Alaska, formerly the Goodpaster Project.

But the definitive agreement, of course, a big deal because it sets up what could be very important catalysts in the first couple of months of 2020. I would love for you to provide a brief overview of today's news and then let's talk about what it means and what the plan is moving forward.

Greg Beischer: Sure thing. Yep. You'll recall that in middle of October we entered into a binding term sheet with an Australian-listed junior company now called Resolution Minerals. And they went through a due diligence period, checked the title of all the claims.

And during that period, the two company's lawyers worked together to create the documents that will dictate first the option agreement and then if it moves on from there to a joint venture agreement. And these are pretty detailed legal forms so they do take awhile. It took us 60 days from that announcement to conclusion. All very good.

During that period, Millrock continued to work on the project and with funding that came from Resolution as advanced funding in anticipation that indeed we would make this definitive agreement that was announced today.

And so we've successfully installed a road about 5 kilometers in length that leads from Northern Star's Pogo Gold Mine road up into the hills to the Aurora target that we've identified over this last 6 months. And it's just to the immediate west of the Pogo Gold Mine, where there's 10 million ounces being mined as we speak, and right along strike and downdip for that matter from the new discovery that Northern Star's calling the Goodpaster Discovery. And this is just on the other side of the claim boundary to the east of our claims, the Aurora target.

We're all set up. We've got the road installed. We've got a well installed so that we have the access to water for drilling at any time. And the plan is to begin drilling as early as late February. That's what we're shooting for.

Upon today's announcement, Resolution will be raising capital. That'll happen this week. I think they've got it prearranged and it'll be certainly enough for them to advance all the funding needed for the first drill program that, like I say, should start towards late February. And we're really looking forward to testing this target we've developed at Aurora.

Gerardo Del Real: Let's talk about the earn-in agreement. The initial one year calls for an investment of $5 million in exploration expenditures to earn 30%. $20 million – these are all US numbers I should stress – $20 million in exploration to earn 60% in the overall project. There's also share payments totaling 38 million Resolution shares and $200,000 in cash over the option period.

Now, obviously if there is a discovery of significance and everything points to a very prospective target, obviously we talked off air, you're looking right across from the claim block and you're seeing three drills turning as we speak. Is that correct, Greg?

Greg Beischer: Well, it's been a while since I've been there. Maybe 6 weeks or so, but we understand that Northern Star is drilling right through the winter and just taking a short break at Christmas. They're drilling off this new discovery they've made, which they called Goodpaster.

Gerardo Del Real: And so again, if there is a discovery of significance, you not only get the upside because you still retain 40% of the project after the $20 million in exploration expenditures.

And let's be clear, this isn't a one-target drill play. We are looking to explore the district aggressively, correct?

Greg Beischer: You bet. In fact, it's contractually mandated in the agreement. We've just executed that. I was concerned that all the money would just get sucked right into the target we've got on West Pogo at Aurora and that the rest of the claim block wouldn't get explored. But that's not the case. Resolution has committed to spend at least $1 million US dollars this year across the district and the same again next year.

So we'll be mounting two parallel programs for this summer. One's a regional exploration program to advance other prospects forward to drill readiness. We've got of course one really obvious drill target that we're going to test immediately, but this is a property that measure 660 square kilometers. It's almost 60 kilometers long at this rare opportunity that we had to secure the mineral rights to almost an entire district.

And I believe one day will be a gold mining district of major proportions on a scale of, for example, Val-d'Or, Quebec or Red Lake, Ontario or Kalgoorlie, Western Australia.

Gerardo Del Real: And again, significant upside, not just from the percentage of the project that you retain, but from the 38 million Resolution shares that Millrock will have in its possession. You have a market cap of approximately $11.5 million Canadian despite a commitment for $20 million US in expenditures here over the next several years. I'm excited for the winter drilling, which hopefully commences in February, March.

Anything else you'd like to add, Greg? I mean this is the part of the exploration phase where the rubber either hits the road or it doesn't. It's my favorite part of the cycle. Get the truth machine out there and see what you have. Anything you'd like to close out with?

Greg Beischer: Yep. No, that's exactly the case. We've always balanced Alaska's seasonality by also exploring in warmer climates like Arizona or Sonora state, Mexico. But that's why I'm really pleased that as early as February we're going to be drilling.

We'll have catalysts that could change the picture for Millrock's shareholders. We're really pleased to be getting going early. It's not our only project though, as you know, and I'm looking forward to forming other partnerships here soon, so it's going to be an extremely active 2020 for our company and I look forward to having some exploration success that's going to move our share price upwards.

Gerardo Del Real: You've done an excellent job, you and the team, Greg, of navigating a very tough market. Using that tough market to bring in, frankly, a district at a very opportunistic price.

And again, I believe the disconnect between the market cap of approximately $11.5 million and the commitment to explore what could be a future gold camp, an emerging gold camp. I think that will narrow here in early 2020 once tax-loss selling is behind us and that's fast approaching.

Thanks again for coming on. Look forward to having you back on as we get closer to drilling, Greg.

Greg Beischer: Thank you, Gerardo. Yes, I have to agree. I mean, it's been 6 really long, hard years, but when you think about it, this opportunity that we've had at 64North just wouldn't have happened were it not for this long down cycle in the mining business. That's it. We've taken advantage of the opportunity, but now it's time for that to pay off for everybody.

Gerardo Del Real: Perfect. Thanks, Greg.

Greg Beischer: All right. All the best, Gerardo

Gerardo Del Real: Chat soon. Bye now.