Mr. Gregory Beischer of Millrock reports
MILLROCK ANNOUNCES DEFINITIVE ASSIGNMENT AGREEMENT WITH TOCVAN VENTURES FOR EL PICACHO GOLD PROJECT, SONORA, MEXICO
Millrock Resources Inc. has signed a definitive assignment agreement with Tocvan Ventures Corp. concerning the El Picacho gold project in the Caborca orogenic belt, Sonora state, Mexico. This agreement follows from a letter of commitment previously announced on
June 8, 2021,
and successful completion of a 60-day due diligence period by Tocvan.
Millrock has reinstated a previously held option agreement with concession owners Suarez brothers, and has now assigned the option rights and obligations to Tocvan. In return, Tocvan has paid back taxes owed by the Suarez Brothers on the mineral concessions and has granted to Millrock certain royalty rights in the assignment agreement. In the event that Tocvan exercises its option to purchase a 100-per-cent interest from the Suarez brothers, Millrock will vest with a 2-per-cent net smelter return (NSR) royalty. Tocvan may purchase back 1 per cent of the royalty for $1-million (U.S.). The royalty contains a provision for an annual advance minimum royalty (AMR) that will be triggered if Tocvan exercises the option agreement. The initial AMR payment to Millrock would be $25,000 (U.S.). The amount of the AMR will double each year until commercial production occurs. Any AMR payments made can be deducted from NSR royalty payments.
Millrock president and chief executive officer Gregory Beischer commented: "El Picacho has great exploration potential for large-tonnage, bulk minable gold deposits and higher-grade, vein-hosted deposits. We had previously dropped our option on the project, but it was readily reinstated. In turn, we are very pleased to assign our rights to Tocvan in exchange for royalty interests that may begin cash flowing in a relatively short time period. Further, in the event that Tocvan does not complete the underlying option with the concession owners, the option rights will be returned to Millrock. Each of these royalty agreements that Millrock makes is accretive to the overall value of the company. Millrock's Hermosillo-based staff have extensive knowledge of the project and have offered exploration services to Tocvan."
The project is located 140 kilometres north of Hermosillo in Sonora, Mexico, and is fully accessible by road. Extensive surface exploration has been conducted historically, defining five gold targets on the project. Millrock and Tocvan believe these targets will be ready for drill testing with surface confirmation via trenching. A permit is currently active to allow for trenching and drilling on the project.
About El Picacho
Location and infrastructure
Total Area: 2,413.7 hectares;
Road-accessible, 140 kilometres north-northwest of Hermosillo;
Excellent road access;
- Railroad on eastern edge of project;
- 18 kilometres southwest of San Francisco mine.
Historic work summary
Five orogenic gold targets defined:
- El Jabali.
- 2,650 rock samples collected;
- Regional-scale mapping completed;
- 3,548 soil samples collected, covering project area;
70 per cent of area covered by ground magnetic survey;
- 17.8 line kilometres of IP surveys;
Limited drilling completed, widely spaced;
- Fully permitted for drilling and trenching.
Terms of option agreement
Upon assignment of the option agreement held by Millrock to Tocvan, Tocvan must make cash payments of $1,989,600 (U.S.) to the underlying concession owners (the Suarez brothers) over a five-year term to acquire 100-per-cent interest in the project. In the event that Tocvan elects to withdraw from the option agreement, it must return the option rights to Millrock.
The scientific and technical information disclosed within this document has been prepared, reviewed and approved by Gregory A. Beischer, president, chief executive officer, and a director of Millrock Resources. Mr. Beischer is a qualified person as defined in National Instrument 43-101.
About Millrock Resources Inc.
Millrock Resources is a premier project generator to the mining industry. 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. The company is recognized as the premier generative explorer in Alaska, holds royalty interests in British Columbia, Canada, and Sonora state, Mexico, is a significant shareholder of junior explorer ArcWest Exploration Inc. and owns a large shareholding in Resolution Minerals Ltd. Financing for drilling at Millrock's exploration projects is primarily provided by its joint venture partners. Business partners of Millrock have included some of the leading names in the mining industry: EMX Royalty, Centerra Gold, First Quantum, Teck, Kinross, Vale, Inmet and Altius, as well as junior explorers Resolution, Riverside, PolarX, Felix Gold and Tocvan.
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