Millrock Resources (CVE:MRO), a relatively small exploration company that focuses on prospect generation, is expanding its operations into one of the most notoriously resource-rich areas of Canada. The region of western British Columbia is often known as the “Gold Triangle District” for this reason.
Millrock, whose stock is traded on the Canadian Virtual Exchange, is based in Alaska, where it currently has 8 projects. The company also recently acquired a dozen exploration projects in Mexico, and is planning on securing two more partners in its Mexican operations. Due to its prospect generator business model, the company makes it money managing projects and providing geological expertise. Meanwhile, its larger partners cover the hefty costs of equipment and drilling.
In the past, Millrock has engaged in joint venture partnerships with the likes of Teck Resources (NYSE, TSX:TCK) and Kinross Gold (NYSE:KGC; TSX:K; SWX:KG).
The “Golden Triangle” in British Columbia is home to some of the country’s richest precious metal deposits. The map below demonstrates the clustering of mining projects within the triangle. The Golden Triangle is considered a source of civic pride in British Columbia and neighboring Alberta: a scenic bike trail exists around the perimeter of the triangle.
Millrock Looking Ahead
Even with its scientific expertise and experience in the industry, Millrock has yet to make a big score by developing a site with extensive mineable deposits. This is why the company’s market capitalization is under $6 million, and it trades for just 20¢ per share. This is why some investors (even influential types within the mining industry) are content to sink money into the firm while it remains cheap in the hopes that they hit the jackpot.
Even though the larger partners will conduct the actual drilling, Millrock maintains an interest in the projects it tries to develop. CEO Greg Beischer explained the firm’s emphasis on the long haul.
“If we keep doing good science, good exploration work, over time we’re going to make discoveries. It’s a sustained effort over time, it’s not just pulses of exploration when there’s an abundance of venture capital available. We’re in this for the long term and it’s a long-term business.”
In other words, Millrock is active in its work whether or not venture capital from outsiders is freely flowing. They are able to weather the storm when money in the mining industry is drying up thanks to their business model.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.