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Centerra to acquire option on 2 Mexican gold projects


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Centerra to acquire option on 2 Mexican gold projects

Millrock ResourcesInc. said March 30 that CenterraGold Inc. has signed an option to joint venture agreement to acquirea 70% interest in Millrock's LosChinos and Los Cuarentasgold projects in Sonora, Mexico.

Centerra must spend US$5.0 million on exploration at Los Chinosand US$2.0 million at Los Cuarentas over five years to earn a 70% interest. Thecompany must spend a minimum of US$420,000 at the two projects in the first year.

Millrock will be the exploration operator for the first two years,and longer if Centerra chooses. Centerra will have to pay Millrock a managementfee to offset overhead costs, calculated as a percentage of exploration expenditures.

Once Centerra secures the 70% interest, the two companies willcontribute on a pro-rata basis to exploration and development. Should Millrock'sinterest dilute below 10%, it will convert automatically to a 1% net smelter returnroyalty. The claim blocks comprising the two properties are subject to a royaltyto Pembrook Mining Corp.,from which Millrock purchasedthe claims in 2014.

At Los Chinos, Millrock has delineated three zones of mineralizationand is completing mapping, sampling and trenching. At Los Cuarentas, Millrock hasidentified gold-bearing quartz veining, with the main area of exploration at anarea showing alteration found in porphyry mineralized systems.