An update on a Nick's Notebook financing company.
Nick Hodge: Hi this is Nick Hodge with the Outsider Club and Editor of Nick's Notebook. I'm here with President and CEO of Millrock Resources (TSX-V: MRO)(OTC: MLRKF), Greg Beischer. This is a company we financed first, really at the bottom of the resource market late in 2015 at C$0.16a share, which came with a warrant at C$0.22, and then we financed it a couple of months after that at C$0.29. That came with a warrant at C$0.44. We're up nicely on both of those financings, some one hundred and eight-one percent on the first and up by half on the second, and it really speaks to what Greg and his team has been able to do, not only in these first few months of what many are viewing as a new bull market, but really the ground work they laid in the doldrums of the bear market to sort of come out of the gate swinging as it were, as we got back to some sort of meaningful gold price.
Greg, why don't you tell us a little bit about how you've stewarded our capital, the projects you've acquired. I know your on many projects and many jurisdictions with many JV partners, so maybe let's start with the Stellar Copper-Gold project in Alaska and we'll just walk down the list from there.
Greg Beischer: Yeah, sounds good Nick. I'll start first just by saying for you and your followers, I was just so pleased that you all made an investment in our company in those dark days last December and then again in May. I think all those investors have made good money on their investment and that just pleases us to no end. I'll be honest with you, when you and I were investing last November, we just didn't know whether it was really going to work out. We knew it was the bottom of the market but we were by no means sure that the market was going to change. We knew it would eventually change but fortunately, it seems like this time our timing was right and the markets have moved up very nicely and everyone has benefited so far.
We have put the money to very good use. The funds that we raised last November, we immediately deployed some of those to buy a very large, very well mineralized package of lands in the Steward Golden Triangle in BC. This is a really hot area. There's been some fantastic discoveries. There's a mine going into production, a great high-grade gold mine and we are really pleased to be able to buy up these projects at a very low cost. Since then, we've invested a little more of your money into advancing the projects, getting them ready for a partner. Now, we don't have a partner yet. We're in talks with several different companies. I'm pretty confident we're going to get a partner soon but those BC assets were key. I think that's a part of the reason why Millrock share price has risen nicely in a more buoyant market.
You asked about Stellar in Alaska, so I'll go up and talk about that. Good story behind this, Nick. It was just over a year ago, the State's rental payments for that project were due. It was a $50,000.00 check that we had to write if we wanted to keep the claims and those were tough times, you know, and we really had to look. Should we maintain our claim position here? We've had the claims for over three years with no partner. It's costing us money and money's tight. We looked hard at it and we said, "Nope. We've got to keep it. This is way too good a project, we can't give it up." As luck would have it, it wasn't a week later that a company called Vista Minerals wound up, flew from Australia, and they optioned the project. They reimbursed our $50,000.00 State rental payment and they've been pecking away at the project, moving it slowly forward. They did a good induced polarization, geophysical survey late this summer. Looks like they got some good results from some preliminary data that we've seen and I expect that they'll be drilling on the project next summer.
Nick Hodge: Now as I understand that, you're on to a skarn there called the Zackly skarn but really you're trying to find a larger porphyry system, as I think the story goes. Can you articulate that a little bit better for me?
Greg Beischer: You bet. You know, skarns often occur in proximity to porphyry copper plus or minus gold deposits. Now, this case, the skarn itself is a viable exploration target. It's quite high grade at seven grams per ton gold and two and a half percent copper. It's wide open, so it's definitely that resource could be expanded. There a couple of hundred thousand ounces of gold in that non-compliant resource known right now. It could easily be confirmed and expanded but sure, Millrock is a company that likes to pursue porphyry deposits that are going to make a difference to the bottom line of companies like Kinross or Valet r even BHP. We like the porphyries. We're in the right neck of the woods. There's some great signs and we think that Vista will be able to do the first round of drilling. We set the stage for them. We spent several hundred thousand dollars bringing the project to drill readiness, so it's up to them to raise the money and walk in and drill it at this point.
Nick Hodge: That's right. They're the operators. So we've covered the Steward Golden Triangle project in British Columbia. You've got a full database of information on that, plus the new surveys you've just done, just looking for a partner. We just covered the Stellar Copper-Gold project in Central Alaska, where Vista Minerals is the partner. You've got geophysical studies on that and are looking to follow up on the skarn, looking for a porphyry, and just recently, you've also acquired some properties or, yeah I guess acquired some properties, in West Pogo. You got those very cheap. You want to talk about Pogo and how exciting that is?
Greg Beischer: Sure, love it. I love this district. The Pogo mine produces several hundred thousand ounces of gold annually. It's operated by Sumitomo Metal Mining Company. I was in Alaska when Teck and Sumitomo made the initial discovery in the early 1990s. There was a huge surge of exploration and only the one mine, so far, has materialized. Well, we geologists know that where there's one mine, there's likely to be others nearby but no one's found one yet. Over the decades since then, the land positions have dwindled until there was just a few gems left. We were able to purchase those claims or option them from a variety of different prospectors and companies, so we've peeled and got all the best land staked. We've staked more around. We have a fantastic database of information that came with some of the purchases, so I feel that Millrock is the most knowledgeable company on the entire Goodpastor Mining District surrounding Pogo, and we've done this all quite quietly in a strategic alliance with the great Australian gold miner, Newcrest. This is an alliance that's just sort of cooked along in the background, thankfully over the last few years in a bad market that helped keep Millrock going, quite honestly, but was very fortuitous in timing for us contrarians that like to pick up projects when prices are low.
Nick Hodge: Well, having partners like Newcrest certainly speaks to your ability and the ability of Millrock to find these properties and to spin them off as you're supposed to be doing as a prospect generator. It's definitely one of the things we love to see. I think the Pogo project, in general, that you've been able to pick up, speaks to the cyclicality of the market, right? It wasn't too long ago that everybody was staking everything around Pogo and in the teeth of the bear market recently, people just weren't even paying to keep their claims, and so a company like Millrock, with leadership like yours, was able to identify that quite well, I think.
Greg Beischer: I think that's the great thing about being a prospect generator, it allows for continuity through the years, good times and bad, and it allows us to take advantage when times are challenging. You just need that consistent, continuous, systematic approach to be successful at mineral exploration.
Nick Hodge: Well I know it's just starting to get cold. Can you give us a sense of what we can expect over the next three to six months with Millrock news flow?
Greg Beischer: Sure. Right now, out most active jurisdiction is Senora State Mexico, where Centerra Gold is optioned two of our projects. I think you'll see more evolve in the future between our two companies. We really like working with them. They're aggressive. They like our projects and our team there and so we just completed the first drilling program since we bought that Mexican exploration company a year and a half, two years ago. You can look forward to more drilling programs in the future, probably December for those first results. Our goal is have, now that the market has turned, to have a drill turning on one project or the other, be it in Mexico, British Columbia or Alaska, year round, with very few breaks in between.
You know, every hole we drill is a chance that Millrock's going to make a discovery that propels the share price forward and rewards our shareholders in a big way, so if we're always drilling, there's always that chance that we're going to make that discovery and I think that's what shareholders in Millrock can look forward to over the coming few years.
Nick Hodge: That's certainly what we like to see, Greg. Thanks for taking a couple minutes today to update the shareholders on your progress over the past six or so months, giving us an update on what's currently going on and what to look forward to in the future. Thanks for being such a good steward of the capital. We really appreciate it.
Greg Beischer: Yeah, my pleasure, Nick. One quick reminder for folks that did participate in the December 2015 financing, they all hold warrants that are going to be good for several years but the exercise price escalates, I believe on December 10th, it's going to escalate from a strike price of C$0.22 to C$0.30, and so folks should look and just see if it makes sense for them to exercise those warrants at C$0.22. We're trading at C$0.44 now, so it's something that they might consider. Nevertheless, the warrant's still going to be good for several years and they may prefer to wait. I just wanted to remind them that that escalation is going to occur in December.
Nick Hodge: That's a great point, Greg. Thanks for the reminder.
Greg Beischer: All right, Nick. Always a pleasure to talk to you. It was great to see you at the New Orleans Investment Conference. Clearly the mood was great there. It's clear the market's turned and we're sure happy about that.
Nick Hodge: I couldn't agree more. I've been there the last several years in a row and this is certainly the most up beat year I can remember. That's what happens when gold shoots up a couple of hundred bucks, since groups like that had last convened, so look forward to more of that in the mining sector. Look forward to a re-assention of the gold price and look forward to seeing you in two weeks at the San Francisco show.
Greg Beischer: Right, see you then, Nick. Thanks very much for calling.
Nick Hodge: No problem.