Through a joint venture agreement, Candian-based FQM has agreed to fund the initial exploration of three key sites on the Alaska Peninsula.
Millrock Resources has entered into a Joint Venture Agreement with Canadian-based First Quantum Minerals to finance the further exploration of gold and copper deposits around the Chigniks, on the Alaska Peninsula.
KDLG’s Dave Bendinger has more:
Audio Transcript:
Last May, Millrock signed a mineral exploration contractwith the Bristol Bay Native Corporation for three large sites around the Chigniks. That agreement gave Millrock room to begin exploration, but perhaps more importantly, the agreement let Millrock market the project to major mining companies.
In late January, Millrock announced it had found an initial investment partner.
"The company we've entered into an agreement with on the Bristol Bay Native Corporation project is First Quantum Minerals," said Millrock COO Sarah Whicker.
Canadian-based FQM has agreed to pick up the tab for an initial exploration program, which is estimated to cost about $600,000. This first partnered-effort won't likely include drilling, according to Whicker. Rather, geologists will focus their attention on the surface, collecting samples.
"We'd like to get rock samples back to the lab and analyze them for a suite of different minerals, but mainly we'll be looking for copper and gold indicators."
Millrock says that mineral deposits on the Alaska Peninsula’s have enticed exploration for more than a century. Porphyry copper exploration in the 1960’s and 70’s discovered the prospects of Millrock's current interest at Bee Creek, Kawisgag, and Mallard Duck Bay. In the decades that followed, geologists increasingly turned their focus towards gold.
But despite the exploration efforts by other companies, including some light drilling in 2005, Millrock does not have a lot of past data to work with. That, says Whicker, is partly due to the tough working environment on the Alaska Peninsula.
"There can be some pretty harsh conditions in that area," said Whicker. "There isn't much infrastructure, so the programs have to be helicopter-supported, which means the weather has to cooperate. We feel that a lot of companies that have been out there in the past haven't really had the opportunity to fully test the prospects that we're interested in."
As this mining project moves forward, if it does, it will require the continued approval of the nearby village corporations which own the land, and the Bristol Bay Native Corporation which holds the mineral rights. Those agreements, says Whicker, should make for good oversight.
"As we all know, it's a beautiful and sensitive area. But it also has a lot of mineral resource potential. This gives us kind of a measured approach to make sure that all of the stakeholders are onboard as we move the project forward."
Millrock and FQM are not long term partners just yet. The agreement allows First Quantum the option to renew its contract, or back out, each of the next several years. Millrock hopes to prove the resource and show that it is an attractive investment opportunity.
"First Quantum hasn't stepped foot on the site yet. They like the data they've seen, and they like the idea that our geologists have come up with. Now we have to go out and test those ideas, and see if our investors are still interested."