Reducing Exposure in Mining Exploration

The exploration segment is largely over-exposed to risk and highly underdeveloped. It is one of the most important phases of any mining project, where geologists have the opportunity to make a world-class discovery, but the high costs involved are often prohibitive without solid financial backing. Millrock Resources differentiates itself from other exploration companies by using a unique financial scheme that strategically mitigates risk for the company, partners and shareholders in both favorable and not so favorable markets.

“Exploration is similar to a roulette game,” says Gregory Beischer, President and CEO of Millrock Resources. “Geologists, upon identifying drilling potential, take a gamble and hope for the best. Between maintaining a wide portfolio of projects across Canada and the US and Millrock’s recent acquisition of 12 properties with its purchase of Pembrook Mexico Holdings, the company increases its probability of successful discovery.” The company considers drilling holes to be risky but always an opportunity to make new mineral deposit discoveries that can significantly increase share prices. It also has the advantage of requiring less time than production projects.

Millrock Resources was named by The OTC Markets Group as a top performing company last year. It ranked top 10 with a 2016 total return of 118 percent. “Our company plans on continuing to grow its shareholder value and will continue to do so even if a discovery is not achieved as planned,” Beischer says. “Investors trust the company and its track record. Improved results are expected on the trade market for 2017.” Millrock also takes care of shareholder investments by only using capital provided by partners to fund the most expensive phases of a drilling project and shareholder equity in less risky exploration assessment.

Millrock was able to stay afloat during turbulent times with successful financial management. During the slump, its focus revolved around acquiring properties and reducing expenses. Now that the market is turning around, the company is preparing to execute more exploration and expects to have a discovery in the coming year and acquire more partners. “Early stage exploration may have the highest risk but it also has the highest potential. We are optimistic about the years to come as we await the rewards for the risks we took by acquiring property in a new country,” he says. Millrock also refuses to enter exploration without a partner as a way to mitigate risk in the most expensive part of the phase and directs shareholder money towards less delicate areas of the prospect model.

Its effective team and well-established projects in areas with strong rule of law have been key factors in attaining a stable base of shareholders and investors. Equipped with a strong financial structure, Millrock has successfully created its reputation of delivering results as pure exploration and early stage discovery specialists.

Beischer considers Mexico to be a favorable jurisdiction in which to invest as the country has a strong rule of law and a community that is used to the mining sector in states like Sonora. However, he considers the country to have some areas of opportunity when it comes to land claims and concessions. “It can be an incredibly long and complicated process that is greatly slowing down the development of exploration,” he says. “The country needs to have a more organized system. If land claims were more accessible and transparent, there are many points of interests that Millrock Resources would gladly direct exploration capital towards.”

Centerra Gold is Millrock’s first partner in Mexico on the Los Cuarentas and Los Chinos copper projects located in Sonora. Of these, the former is the one with the most potential, Beischer shares. “Unfortunately, results for Los Chinos were not as positive as expected and we are in the process of reconsidering its continuation,” he says.

Entering Mexico may have been a gamble but it is betting that results will be found among its wide project portfolio. The company is also grateful for the great team that it gained upon purchasing Pembroke Mexico Holdings. Millrock Resources is in the process of acquiring more partners, including Mexican companies like Fresnillo.