Millrock Resources (TSX-V: MRO) CEO Greg Beischer on Deal with Australian Company to Properly Drill Test the District-Scale Goodpaster 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, I would ask how you're doing, but I have to believe you're doing pretty damn well. Good morning to you.

Greg Beischer: Good morning, Gerardo. Yep, I've got a smile on my face. We've put together a great project, and now we've got the funding to explore it.

Gerardo Del Real: We spoke a week ago, and at the time the billion-dollar question, per se, was how do you explore the 660 square kilometers of mineral rights in the Goodpaster Gold District, which surrounds the Pogo Gold Mine? How do you do that without diluting the company and shareholders to oblivion?

You mentioned that you had several offers on the table. Today, you just announced that you've executed a binding term sheet with a company which is called Northern Cobalt Limited, Australian Group, which is soon to be renamed Great Northern Metals.

I want to get into the details of the deal, because they are what you said it would be if you struck a deal. It's aggressive. You get capital up front. There's an aggressive drill program in year one. You're not giving away the district, and the only way, frankly, that they earn up to 80%, is if they're carried to commercial production.

So I want to get into the details. But first off congratulations, Greg. It looks like a fantastic deal for shareholders, and I know one that you've been working hard at behind the scenes, so congrats.

Greg Beischer: Yeah, thanks very much, Gerardo. I really think it's a win-win agreement, both for Northern Cobalt and for Millrock shareholders. They're walking into an entire district-scale project, a very unique opportunity that we jumped on last spring when we staked up the entire district. Since then, Northern Star, the owner of the Pogo Gold Mine, has been working away, expanding the mine, making new discoveries, some of which seem to be very, very close to our claim boundaries.

So that's really helped market Alaska, generally, and this project, in particular, in Australia. So we did have several Australian firms interested in the claim group. But this particular group stood out above the others in their level of interest, their sole focus, and their financial backing. So we're pleased to do the deal with them.

That does mean cash immediately going into Millrock and then into the ground. We're going to try and build a drill trail right to the site. We want to drill first, so that we can get that done this fall, and we still have the opportunity then to drill early in 2020. Some serious money has to go in the ground, and this project really deserves that kind of a budget, $5 million US dollars in the first year. That will give us a really great test at West Pogo, where we've got a very compelling target, but also advancing the whole district.

As I mentioned last week, that was an absolute requirement from my standpoint. This is a huge district. We've got all kinds of great prospects, and we want to move them all forward, and Northern Cobalt shares our vision that this is going to be a gold mining cap of significant proportion, given some good hard exploration work. But it takes money, and now it looks like we have that money through this deal.

Gerardo Del Real: Let's hit the bullet points, and then I want to ask you something that I asked you off the record. Will they be able to raise the funds and who are they backed by? Frankly, a lot of people are going to say, "Well, Northern Cobalt Limited, small market cap. They're in the process of being renamed” – as I mentioned up top – “to Great Northern Metals. How are they going to pull off such a substantial financing package?"

But let's hit the bullet points on the fantastic deal. Initial year one investment, as you mentioned, of US $5 million dollars in exploration expenditures, to earn just 30%, which will be a great first pass to see what's there. The drilling will start in early 2020. Preparation begins immediately. $20 million US in exploration expenditures, to earn 60% in the overall project share payments, totaling 38,000,027 shares. I could go on.

I should make clear to everybody that there is a legal due diligence period. I believe it's a hundred days, which was granted in return for a non-refundable exploration advance of $500,000, which correct me if I'm wrong, but I believe that will go into the preparation for the early 2020 drilling. Is that accurate, Greg?

Greg Beischer: Yeah, exactly right. That will drive a drill trail. We're going to drill a well near the first area. That way, we've got a winter water source. Drilling in February, March in Alaska, it can be a great time to do it, but you need water, and up in the hills, there's not a lot of flowing water in February in Alaska. So we'll drill a well and that will give us that flexibility.

Gerardo Del Real: Let's talk about the financing and how they're going to raise the money for this. Who is this group backed by? That's critical to the deal actually being consummated.

Greg Beischer: Sure. So PAC Partners is closely involved with Northern Cobalt, but also the big brokerage, Taylor Collison out of Sydney, Australia. So these two premier resource investing houses are backing this deal, splitting it. I think that speaks a lot to this group and this project, that two of the biggest houses would get behind the deal.

They've already raised the first $1.5 million to finance the due diligence period and get the ball rolling. I don't think they're going to have any trouble to come up with a bigger financing then to do the drilling all next year.

We've met all the people. They seem great and they're keenly interested in the Goodpaster District and in Alaska in general. So I think there's not going to be any problem. Owning a really big chunk of what, until yesterday, was essentially a shell company is a good thing. Those shares could end up being worth a great deal of money. If we have exploration success and find an ore body, that's going to be to the great benefit of Millrock shareholders.

Gerardo Del Real: Absolutely agree. Greg, congrats again. Is there anything else that you want to add? I know that the excitement, and rightfully so, is on this deal, but I know you, and I know that behind the scenes, you're likely working on other things. Anything you care to comment on?

Greg Beischer: Yeah, sure. We do have lots of other projects. I actually think we're going to have other Australian partners on some of them. It's interesting, Gerardo. I've often heard feedback from some of our shareholders or potential shareholders as I've given a presentation that, "Wow, Millrock has a lot of steak, Greg, but where's the sizzle?"

And you know, in the case of Goodpaster, we've got some serious sizzle. We've given up a small portion of the project, but that still allows us to have lots of sizzle. So we'll be talking about the geologic merits of the project and talking about it to various investors. And it's fun, honestly, to have such a great prospect with a near-term drilling catalyst.

Gerardo Del Real: Looking forward to it. I can't wait for the drills to start turning. Congrats again. And again, I get the feeling we'll be chatting soon again, Greg.

Greg Beischer: Yep. I think we will too, Gerardo. Thank you very much.

Gerardo Del Real: Awesome.

Greg Beischer: Always a pleasure.

Gerardo Del Real: Thank you.

Greg Beischer: Thank you