Millrock Resources (CVE:MRO) announced Monday that Teck Resources (NYSE:TCK) has chosen to proceed with the first option on Millrock's Estelle gold project in Alaska, giving Teck the right to earn 55% of the property.
Under the terms of the agreement, Teck can earn 55% by incurring exploration expenses of US$3.6 million. With the $3.4 million exploration program approved for the site by Teck today, along with expenses already incurred, Teck will own 55% of the property by the end of this year.
Teck will then have the right to earn an additional 10% under a second option agreement by spending another $5 million and by making cash payments of US$400,000.
"Millrock is pleased that Teck is funding this project aggressively", said president and CEO of Millrock, Gregory Beischer.
"We have held off on drilling for two years to carry out a comprehensive, systematic, surface exploration program to select the best possible, well-defined drill targets. This budgetary level gives the project a great chance at early success."
Millrock will act as manager of the 2011 exploration program, which will include plans for drilling at the four main zones of large scale anomalous gold: Oxide Ridge, Shoeshine, RPM and Stoney prospects.
The Estelle project, which covers 24,600 hectares and is located 160km northwest of Anchorage, lies adjacent to Kiska Metals' Whistler copper-gold deposit.
The property is located in the Kahiltna Terrane, an assemblage of rocks that hosts the giant Pebble copper-gold-molybdenum-silver deposit.
Millrock currently has eleven active exploration projects - eight gold-copper properties in Alaska, and three porphyry copper prospects in Arizona. The company's shares rose more than 8% on the news today, to trade at $0.88 as of 12:25pm EST.