Batamote

Status

Under Option to Mine Discovery Fund subsidiary Latin America Copper.

Target

The target at El Batamote is a world-class porphyry copper/molybdenum deposit. An andesite and dacite leach capped block could preserve the upper levels of a Cu porphyry system at El Choclo Northwest and potentially host a chalcocite blanket and buried target at depth.

Location and Setting

The Batamote project is located in Northern Sonora, Mexico approximately 25 km north of the La Caridad porphyry Cu-Mo deposit along a district-scale structural corridor. It is situated within the Cananea-La Caridad porphyry trend part of the world-class Sonora-Arizona-New Mexico Laramide Porphyry Province. Over twenty porphyry-related copper-molybdenum deposits have been mined in the Arizona-Sonora porphyry copper trend.  The project contains five prospects, El Choclo, El Choclo northwest, Bata Sur, Júcaros, and Arreadero.

Land Status

The property consists of three mining concessions La Higuerita 4, La Higuerita 7 and La Higuerita 8 covering a surface area of 5,796 hectares.

Previous Exploration

The area has been explored by various companies since the 1950s. A small mine exploited high-grade Cu mineralization in the Bata Sur breccia zone. Peñoles worked the area targeting enrichment blanket mineralization. Teck began working the project in 2010 and performed regional and detailed mapping, grid soil sampling, surface rock sampling, ASD analysis, ground and airborne geophysics and drilling including 10,298 meters in 27 diamond drill holes. The data described above has led Millrock to make new exploration observations and recommendations including mapping and drilling at El Choclo and El Choclo Northwest where the potential exists for a buried Cu deposit.

Geology

A discrete linear trend of porphyry copper/molybdenum deposits extends from Sacaton in Arizona through Silver Bell and the Pima district to Cananea and La Caridad in Mexico. Deposit clusters along this trend show a remarkably even spacing of 65 to 70 km, except between Cananea and La Caridad which are located approximately 120 km apart. Exploration at El Batamote is based in part on the concept that there may be a third buried copper/molybdenum porphyry deposit located between Cananea and La Caridad. Mapping at Batamote has discovered several prospects containing porphyry copper style alteration and mineralization. El Choclo Northwest is an area recently recognized by Millrock as a leach cap zone with potential to contain a buried target at depth.

Structure and Alteration

Basement rocks consist of Precambrian Pinal Schist and associated granite intrusives. The area south and west of the property consists of north-trending gravels and volcanic tuff in basin fill. To the east and north Laramide aged volcaniclastic rocks are intruded by a large multiphase intrusive complex (58-53 Ma). In this location north-trending Oligocene aged porphyry dikes cut through the system. At the El Choclo prospect drilling cut low grade but extensive hypogene mineralization grading between 0.1 and 0.25% Cu in monzonite quartz porphyry and in volcanic rocks. The porphyry trends northeast and plunges northwest towards the more recently identified prospect El Choclo Northwest. Northeast and northwest-trending structures represent a complex array that appears to have controlled the emplacement of magmatic and hydrothermal systems. Post mineral extension (Tertiary) consists of at least three events of normal faulting, which has caused dismemberment, tilting and concealment of the western edge of the hydrothermal system beneath basin fill. The exploration area is marked by widespread alteration. The main and strongest alteration zone is 6 km X 3 km in extent. This alteration is truncated by basin-bounding faults and is thought to continue undercover.

Mineralization

Mineralized targets include El Choclo, El Choclo Northwest, Júcaros, Bata Sur, and Arreadero all within the strong alteration zone.

El Choclo is a northwest trending 3.3 X 0.65 km Cu soil anomaly (>150 ppm) associated with a large (3.5 X 2.0 km) quartz-sericite-tourmaline and sericite-chlorite alteration zone with sheeted and stockwork veining. Four prior drill holes intersected mineralized porphyry containing sericite-quartz-chlorite alteration and pyrite-chalcopyrite mineralization indicating multiple hydrothermal events. Mineralization is found in both the porphyry and the host volcaniclastic rocks. The best intercepts include 74 m @ 0.13% Cu, 13m @ 0.25% Cu, 28m @ 0.13% Cu, 22m @ 0.15% Cu, 47m @ 0.21% Cu, 49m @ 0.18% Cu, and 42m @ 0.12% Cu and 33m @ 0.14% Cu.

El Choclo Northwest contains a leach capping zone in a block controlled by faults. The zone is thought to have the potential to be the upper levels of a copper porphyry system and an extension of the hypogene mineralization encountered in drill holes at El Choclo. Geophysical work indicated a conductive zone beneath the leach cap that has not been drilled and the low grade mineralized quartz monzonite porphyry plunges northwest potentially beneath the leach cap.

Further to the northwest, the Júcaros prospect is controlled by northeast and northwest faults that form an uplifted block of andesite and dacite flows. Only limited reconnaissance exploration has been conducted at Júcaros, however, the area contains typical host rocks that could host copper mineralization and the prospect is on trend with El Choclo Northwest. More work needs to be conducted before any conclusions can be drawn.

At Bata Sur, hydrothermal breccia bodies containing Cu values up to 0.65% at surface trend northwest and are roughly 850 X 160 m in areal extent. These breccias contain quartz, carbonate, chlorite, chalcopyrite, pyrite, and lesser galena and sphalerite. The brecciated area is associated with a soil anomaly and a chargeability anomaly. Four drill holes have cut polymictic breccia containing carbonate-quartz ± chlorite ± fluorite cement and pyrite-chalcopyrite ± galena ± sphalerite. The best drill intercepts include 136 m @ 0.26%Cu and 78 m @ 0.16%Cu and 181 m @ 0.20% Cu.

The Arreadero prospect is characterized by widespread chlorite-biotite-kspar alteration. A large N-S trending soil anomaly contains > 150 ppm Cu and is associated with pyrite-chalcopyrite bearing stockwork over a granodiorite stock. This 53 Ma stock contains biotite-kspar and chlorite-sericite alteration and weak pyrite-chalcopyrite mineralization and is similar in age to the La Caridad porphyry copper system.

Conclusions and Recommendations

Drilling and surface work by previous explorers has identified several targets related to porphyry Cu centers, El Choclo, El Choclo Northwest, Júcaros, Bata Sur, and Arreadero that require additional follow-up work. Given the prospectivity of the project, a concerted, systematic exploration program is warranted. It is recommended that initially a property-wide approach consisting of alteration mapping through hyperspectral remote-sensing mineral mapping. Deep-looking geophysical surveys such as Titan DCIP/MT should be considered, with drilling to follow.

The El Choclo target is a dike-like mineralized porphyry with a minimum extent of 1 x 0.5km, open to the northwest. The target is associated with quartz-sericite and sericite-chlorite alteration, high-density veining, and a large Cu soil anomaly. El Choclo Northwest has the potential to contain a chalcocite blanket under a leached cap area. Follow-up mapping and geochemical and alteration sampling is recommended to define drill targets in the leach cap area. Upon receipt of positive results, a series of 4 to 7 drill holes drilled to an approximate depth of 500 to 800m is recommended to test for copper deposits beneath the leach cap.

Recommendations for Júcaros include semi-detailed mapping including geochemical rock sampling with the objective of determining if the area could further extend the El Choclo mineralization.

Bata Sur contains two mineralized hydrothermal breccia bodies that may represent a distal feature to a porphyry copper center. Limited drilling resulted in significant copper mineralization in polymictic breccia in four drill holes. The potential to encounter economic grades is high in this structural environment. Further mapping and drill testing is recommended at Bata Sur to follow up on the breccia targets. A program consisting of 3 drill holes to a depth of approximately 800 meters is recommended.

The Arreadero target is characterized by Cu-bearing stockwork associated with potassic alteration as defined by mapping and geochemistry. Previous work performed on the property should be completely reviewed and geostatistical analyses of soil and drill hole geochemistry performed. Additionally, magnetic modeling should be conducted. Further fieldwork would be based on the results of the recommended office studies but should include mapping to identify stockwork veins and rock and soil sampling to further define the copper anomalies associated with potassic alteration. An IP study in this area is recommended to aid in the placement of future drill holes.

“THE TECHNICAL INFORMATION WITHIN THIS DOCUMENT HAS BEEN REVIEWED AND APPROVED BY GREGORY A. BEISCHER, PRESIDENT & CEO OF MILLROCK RESOURCES INC.  MR. BEISCHER IS A QUALIFIED PERSON AS DEFINED IN NI 43-101.”