VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 23, 2014) - Millrock Resources Inc. (TSX VENTURE:MRO) ("Millrock" or "the Company") announced today that it has entered a binding letter agreement to purchase Pembrook Mexico Holdings Corp. ("PMXH") and all of its assets, which include the shares of a wholly-owned Mexican subsidiary and its nine 100%-owned mineral properties, two mineral properties under option, an extensive geological database and various exploration equipment. The projects, primarily located in the State of Sonora, Mexico, have potential for large-scale copper-gold porphyry deposits, high-sulphidation epithermal gold deposits, high-grade vein gold deposits, and skarn and replacement-style silver-zinc-lead deposits.
Gregory A. Beischer, Millrock President & CEO stated: "We are very pleased to be making this purchase and thereby acquiring eleven high-potential projects at low cost. Several of the projects should be of immediate interest to funding partners. Most importantly, the geological database and technical team associated with the acquired company gives Millrock the knowledge and operational ability to effectively compete in this jurisdiction. We will be well-positioned to take advantage of many new project generation opportunities that are being created by Mexico's mining law reform. We plan to move aggressively to acquire more projects in Mexico but will still remain highly active in Alaska and the southwest US. This has been a great opportunity to increase the scope and breadth of Millrock in a mining-friendly jurisdiction."
Philip St. George, Millrock's Chief Exploration Officer stated: "The Rio Sonora and Las Cuarentas Oeste projects have some great indications of buried porphyries. There could be another deposit similar in scope to the long-producing Cananea copper mine on our new claims. The potential for high-grade gold deposits at the Los Chinos and Ramard projects is also excellent."
PMXH is a British Columbia incorporated holding company that was owned by Pembrook Mining Corp. ("Pembrook"). The mineral properties are held in a Mexico-registered subsidiary that is beneficially wholly-owned by PMXH. Millrock and Pembrook will work diligently to complete a definitive agreement by the Closing Date, which will be no later than June 10, 2014. The transaction is subject to approval by the TSX Venture Exchange ("TSX-V") and due diligence. The terms of the transaction include cash payments, Millrock share payments and a royalty:
- $250,000 on the Closing Date.
- $250,000 on or before the first anniversary of the Closing Date, payable in cash or Millrock shares or a combination thereof at Pembrook's sole discretion, subject to TSX-V approval.
- Initial Share Payment: Millrock will issue 7,297,297 of its shares to Pembrook on the Closing Date. This will result in Pembrook owning 7.76% of Millrock issued and outstanding share capital as of today's date ("Pembrook Ownership").
- Additional Share Payment: One year from the Closing Date, Millrock will issue to Pembrook that number of shares that will ensure that the Pembrook Ownership established today has not been diminished. However, the requirement for Millrock to make the additional share payment will be voided if Pembrook sells any of the shares issued under the Initial Share Payment during the year following the Closing Date.
- Shares issued will be subject to a hold period of four months.
- A royalty of 1.5% on gold and silver and 1.0% on other metals applies to production from any Mexico property held by PMXH (and not already subject to an underlying royalty) as of the Closing Date of the purchase but no others.
Following is a brief synopsis of the main PMXH project assets. Further descriptions and a location map can be found on Millrock's website at this link:
Rio Sonora Project, Sonora, northern Mexico, Cu-Au, 100%: This is a large land position situated between Cananea and La Caridad mines. The target is a buried copper porphyry beneath conglomerate valley fill. Copper occurrences and alteration in surrounding rocks provide support for geophysical targets beneath the conglomerate.
Las Cuarentas Oeste Project, Sonora, Mexico, Cu (Au), 100%: This property is situated on a very large, intense, zoned alteration system typical of porphyry copper deposits. Very little work has been done by prior workers because no actual intrusive porphyry rock is exposed at surface and base metal occurrences are limited. A buried porphyry copper-molybdenum deposit is possible.
Las Cuarentas Este Project, Sonora, Mexico, Au-Ag, 100%: The property is situated on a continuation of the mineralized structure associated with the adjoining Mercedes gold-silver mine that is operated by Yamana Gold Inc. There is potential for high-grade epithermal gold deposits on this property.
Violeta Project, northern Sonora - Au veins/breccias, 100%: This is a fractional claim block in the core of a known mineralized system in northern Sonora. The surrounding claims are owned by another company that has expressed interest in purchasing this key land block.
Los Chinos Project, Sonora near Hermosillo, orogenic Au, 100%: This project targets Herradura-type gold deposits. It is located along a juxtaposed contact of high grade Proterozoic metamorphic rocks against relatively un-metamorphosed but deformed metasedimentary rocks of Jura-Cretaceous age. Several known gold showings suggest a favourable exploration environment. Preliminary exploration has defined some interesting gold values, including a newly discovered zone of oxidized pegmatite and quartz veining in the Proterozoic rocks.
Ramard Project, Sonora, epithermal / vein Au, 80 km north of Hermosillo, 100%: The claims cover a historic, polymetallic stream sediment anomaly as well as a known epithermal stockwork vein showing. Two areas of high grade gold in vein float with magnetite stockworks are present. Additionally, a large skarn system was recently discovered. The skarn contained anomalous silver, lead and zinc.
Villa Hidalgo, Sonora, vein Au, 100%: This claim is on the southern extension of the Sacoton-Cananea-Caridad porphyry trend and was acquired on the basis of favourable geology and colour anomalies. Reconnaissance exploration has led to the discovery of auriferous stockwork zones near some historic mine workings. Further mapping and prospecting are warranted.
La Union Project, Sonora, Au-Ag, 100%: This project is situated in the Herradura district of northwest Sonora. Mapping has identified an area with high-grade silver-gold (and lead-zinc) veins.
Los Chivos Project, Central Baja California, orogenic gold, 100%: Reconnaissance exploration has defined some high grade vein mineralization in the district and there may be potential for larger Herradura-style orogenic gold deposits.
Guadalcazar Project, San Luis Potosí, central Mexico, Au-Ag, 100% Option from Servicio Geologico Mexico: At this project a skarn zone with strong silver is known. Pembrook, from a 2013 drilling program, has reported high grade silver over significant drill intervals including 22 m @ 148 gpt Ag.
Caotan Project, Chiapas, southern Mexico, Au, 100% Option from Riverside: Early stage exploration has defined several drainages covering ten km of strike that yield transported float of high sulphidation gold mineralization consisting of vuggy silica, silicification and iron oxides with strong gold-silver. Community relations work will be necessary to gain access.
The technical information within this document has been reviewed and approved by Gregory A. Beischer, President & CEO of Millrock. Mr. Beischer is a Qualified Person as defined in NI 43-101. The Qualified Person has personally inspected the Rio Sonora, Las Cuarentas, Ramard, Los Chinos and Guadalcazar properties and drill cores from the Las Cuarentas and Guadalcazar properties but has not verified assay results or grade calculations.
About Millrock Resources Inc.
Millrock Resources Inc. is a premier project generator to the mining industry. In the search for world-class metallic mineral deposits, Millrock identifies, packages and operates large-scale projects for joint venture, thereby exposing its shareholders to the benefits of mineral discovery without the usual financial risk taken on by most exploration companies. Funding for Millrock's exploration projects primarily comes from its joint venture partners. Business partners of Millrock include some of the leading names in the mining industry: Teck, First Quantum and Altius.
|ON BEHALF OF THE BOARD
|Gregory Beischer, President & CEO
Some statements in this news release contain forward-looking information including the statements that the acquisition of PMXH will generate more projects in Mexico, that several of the projects should be of immediate interest to funding partners, and as to the potential for high grade gold deposits. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include without limitation the completion of the acquisition of PMXH, generation of more projects in Mexico, the ability of Millrock to raise the funding required to undertake exploration activities prior to entering into earn-in agreements with funding partners, and the ability of Millrock to negotiate earn-in agreements with funding partners.
"NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE."