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Millrock options 80% of Dragonslayer copper-gold project to First Quantum

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Millrock options 80% of Dragonslayer copper-gold project to First Quantum

Millrock Resources Inc. granted First Quantum Minerals Ltd. an exclusive right to enter an option to acquire up to 80% of the Dragonslayer porphyry copper-gold project in Alaska.

The company said Sept. 23 that the Dragonslayer project comprises 60 mining claims it recently staked, with mineral rights covering 3,885 hectares.

Under the binding letter agreement, First Quantum is funding US$100,000 worth of geochemical surveys, mapping, and prospecting to earn the right for the option. Upon receipt of the results, which are expected in October, First Quantum will have until Dec. 31 to exercise its right to enter an option to joint venture agreement.

First Quantum must spend a total of US$6 million on exploration and pay an aggregate US$700,000 in cash over four years to earn an initial 51% interest in the project.

The company can increase its stake to 70% by defining compliant inferred resources of at least 1 million tonnes of contained copper equivalent and filing a qualifying report.

To increase its interest to 80%, First Quantum must solely fund the project through permitting and construction until commercial production, including funding Millrock's proportionate share, which Millrock can repay from proceeds from production. If First Quantum does not exercise this option, Millrock must contribute its share of expenditures to maintain a 30% stake.

In June, Riverside Resources Inc. entered a binding agreement to acquire five gold-silver-copper projects in Mexico from Millrock for C$35,000 and 150,000 shares.