Bering Straits Native Corporation Lands

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General: Millrock has made an exploration agreement with the Bering Straits Native Corporation on three discrete blocks of land on the south side of the Seward Peninsula in Alaska. The land blocks are named Council, Bluff and Ungalik. The land area totals 395 square kilometers, and covers the source rocks for placer deposits that have been mined by others since the early 1900's. These placers have produced in excess of one million ounces of gold that has been derived from lode source on the Native land. A gold resource exceeding several hundred thousand ounces has been previously outlined by BHP at Bluff. The Council and Ungalik blocks are virtually unexplored.

Agreement: The agreement covers all three properties and is an Option to Lease with a five year term. The agreement terms include:

• $4 million work commitment, $300,000 in 2008
• $550,000 in option payments, $30,000 on signing
• Scholarship donation, $40,000, $5,000 on signing
• 1.0 million MRO shares, 100,000 on Exchange approval
• NSR 2.5% to 5.0% sliding scale tied to gold
• BSNC can participate up to 10% at their option at feasibility

Most of the lands are split estate. The Bering Straits Native Corporation owns the subsurface while a village corporation owns the surface. Millrock is presently negotiating agreements with the villages.

Individual Land Block Descriptions

Bluff

Target: The known mineralization at Bluff consists of gold-bearing quartz veins hosted in a sulfide-rich quartz muscovite schist. Thrust faults form the upper and lower contacts for this schist unit which is intercalated between barren marble units. Previous soil sampling in the late 1980's by BHP showed three large geochemical anomalies with greater than 100 ppb gold spread over an area of about 2.5 miles length. The areal extent of the land Millrock will explore is much larger than that covered by BHP and includes drainages with known placer gold occurrences the sources of which have not been explored in modern times with modern methods.

BHP drilled a total of 35 holes in the three target areas with results that are very attractive by 2008 standards. Though not NI43-101 compliant, BHP reported an approximate resource of over 0.5 million ounces of gold contained in three different zones. The Daniel's Creek zone was reported by BHP to contain 300,000 ounces of gold in a resource of 3 million tons grading 3.43 grams per tonne. In a 1991 summary report, BHP indicated there was potential for gold resources exceeding 2.5 million ounces. The mineralized zones are open and further drilling is required to define the resource and drill it to NI43-101 compliant standards.

Location and Setting: The Bluff prospect is located about 42 miles east of Nome, 22 miles south of Council, and 12 miles west of Golovin. The Nome-Council seasonal gravel road passes within 12.5 miles of the Bluff prospect. The prospect area is on the coast with landing craft-accessible beaches and an airstrip providing ready access for personnel and equipment. Nome is serviced by three scheduled jet aircraft flights a day from Anchorage, daily air freight service, and has a small port for use for barge delivery of fuel, supplies, and equipment from the Pacific Rim.

Agreement: Millrock has completed its agreement with subsurface owner, Bering Straits Native Corporation on the terms described above. Negotiations for use of the surface estate are in progress, and Millrock expects to make an agreement with the surface estate owner, White Mountain Native Corporation, in the near future. Both native corporations are strongly supportive of mining and welcome minerals exploration of their lands.

Geology and Mineralization: Mapping by earlier investigators and BHP geologists has shown that quartz muscovite schists are overlain and underlain by massive marble units. The marble units are massive and grey to buff in color with variations in graphite content, silicification, and with mylonitization near the contacts. The schist is occasionally calcareous, has stratabound zones of sulfides, and is intensely quartz veined in the auriferous zones. The contacts between the units are thrust faults. The largest, most obvious structure is the Bluff Anticline. The fold axis is between Daniels Creek and Swede Creek and strikes north northeast with a plunge of 15° to 20° to the north. Detailed mapping has shown four separate folding events.

The relationship between the gold-bearing quartz veins in the schist and the complex structural history of these lithologic units is still speculative.

Exploration Program: The 2008 exploration program will consist of the following activities:

• Confirm the BHP geochemical anomalies and field check their geologic mapping;
• Relog the BHP drill core with spot check resampling and chemical analysis;
• Expand the geochemical survey coverage of the area with detailed stream sediment sampling and soil sampling programs;
• Conduct reconnaissance geologic mapping of the area outside of the area mapped in detail by BHP;
• Compile all available and project data into a GIS environment including the capability of 3D viewing of surficial and drill hole geology and chemistry.
• Recalculate resources reported by BHP and identify drilling targets to expand resource.

Council

Target: The large placer gold deposit on the Niukluk River originates at its confluence with Ophir Creek and extends downstream for at least ten miles and was up to one-half mile in width. On Ophir Creek, placer gold has been mined a minimum of sixteen miles above that confluence. Total placer gold production from these two creeks is estimated at about 1,000,000 ounces of gold. The objective of the 2008 exploration program at Council is to locate the lode source(s) of this placer gold.

Location and Setting: The village of Council is located on the north bank of the Niukluk River above the confluence with Melsing Creek which also produced gold. Council is connected with Nome by a seasonal State-maintained gravel road. A gravel road extends from Council to Ophir Creek and then up Ophir Creek to the northern limits of placer gold production.

The terrane consists of rolling hills with a maximum relief of about 350 meters. The Ophir Creek drainage does not appear to have been glaciated.

Agreement: Millrock has completed its agreement with subsurface owner, Bering Straits Native Corporation on the terms described above. Negotiations for use of the surface estate are in progress, and Millrock expects to make an agreement with the surface estate owner, Council Native Corporation, in the near future.

Geology and Mineralization: Bedrock geologic units in the Council area are primarily part of the Precambrian to Paleozoic, blueschist-facies metamorphosed Nome Group. Along the northern edge of the Council map, amphibolite-facies rocks (including staurolite schist, and undifferentiated pelitic schist and arc-related amphibolite) are present in high-angle-fault contact with the Nome Group along the south side of the Bendeleben Mountains. Although these rocks are higher in metamorphic grade, their protoliths may be equivalent to those of the Nome Group. Minor Cretaceous to Quaternary alkali gabbro dikes and Cretaceous syenite dikes are the only other rocks that crop out in the project area.

In the Council area, low-sulfide, gold-bearing, quartz ± arsenopyrite ± stibnite ± iron sulfides ± white mica ± graphite ± carbonate ± plagioclase veins are preferentially hosted by graphitic ± calcareous ± pyritic schist and quartzite in the Mixed Unit. The Mixed Unit is spatially predominant in the project area.

Exploration Program: The 2008 exploration program in the Council area will consist of a detailed GIS compilation of all relevant data. From this base, detailed geochemical surveys (stream sediments, soil samples,) and detailed geologic mapping will follow up on targets of interest. Trenching may be carried out on targets of interest.

Ungalik

Target: The Ungalik River placer gold occurs on a major north-south mega-lineament that, in its northern segment, separates the much older Seward Peninsula terranes on the west from Cretaceous and younger units on the east. The placer gold occurrences at Candle and Granite Mountain occur on northern segments of this structure.

The lode source of the Ungalik placer gold has not been discovered, but could occur at one or more of the following possibilities:

• The Christmas Mountain Tertiary intrusive complex, with known sulfide float in the creeks draining the prominent topographic feature;
• Quartz veins that may occur in a conjugate shear system associated with the megalineament.

No modern exploration has been carried out on this land. Millrock will carry out the first exploration program on the land in the 36 years that the Native corporation has owned it.

The exploration program for 2008 will focus on the discovery of the source of the placer gold.

Location and Setting: Christmas Mountain and the Ungalik River are located on the east side of Norton Bay, northeast of the village of Shaktoolik. The property is located about 400 miles west of Fairbanks, about 150 miles east of Nome, and about 45 miles north of Unalakleet. It is in the Norton Bay (C-4) quadrangle at about 160° 45' West longitude and 64° 33' North latitude.

Agreement: Millrock has negotiated an agreement with Bering Straits Native Corporation, the regional corporation that owns the surface and subsurface estate of a tract of land at Christmas Mountain, and also owns most of the subsurface estate under the uplands around the placer pay streak. The land at the historic placer operation is held by privately owned patented and unpatented mining claims. Negotiations are underway with Shaktoolik Native Corporation which owns some subsurface estate with mineral potential as well as the surface estate on lands where the subsurface is owned by the regional corporation. Both native corporations are strongly supportive of the mining industry and encourage exploration of their lands.

Geology and Mineralization: The Ungalik River area lies on the western edge of the Koyukuk terrane, which is dominantly Upper Jurassic(?) and Lower Cretaceous andesitic volcanic rocks in this area. In mid- and Late Cretacous time, the earlier rocks were eroded and partly covered by terriginous clastic sediments. The only intrusive rocks known in the entire Norton Bay quadrangle are the Tertiary Christmas Mountain plug and related dikes in the upper Ungalik River area.

In the Norton Bay quadrangle, the only places where placer mining has occurred have been on the Ungalik River and its tributary Bonanza Creek. Several drainages from w:st="on"> Christmas Mountain have placer gold, but grades were too low for sustained mining.

Exploration Program: In 2008, the exploration program will consist of detailed stream sediment and soil sampling in the most prospective areas, and reconnaissance geologic mapping to help establish the exploration vectors for future follow-up work. This work will be conducted on both the native corporation lands and the adjacent State of Alaska lands.