Millrock Arranges Financing With Altius to Form Strategic Alliance

Millrock Arranges Financing With Altius to Form Strategic Alliance

Millrock Resources Inc. announce that Altius Minerals Corp., through its wholly-owned subsidiary Altius Resources Inc. (“Altius”), has agreed to a private placement financing with the Company to initially fund a strategic alliance for exploration of five areas in Alaska.

“Millrock is very pleased to engage in this alliance with Altius,” stated Millrock President & CEO Gregory Beischer. “We anticipate a highly productive, collaborative relationship from which several excellent new gold exploration projects are likely to flow. Timing is crucial for project generator companies. We see an imminent surge in gold price, and a strong demand for gold projects. Millrock, by virtue of this alliance, will substantially broaden its array of quality projects that will be explored with funding from third-party companies.”

This private placement will raise gross proceeds of Cdn$930,000 from the sale to Altius of 4,227,273 units at a price of Cdn$0.22 cents per unit. The total gross proceeds from this private placement will increase to approximately Cdn$994,243 by the issuance of an additional 292,014 units at a price of Cdn$0.22 cents per unit if Kinross Gold Corporation (K – TSX; KGC – NYSE) fully exercises its anti-dilution rights. The price represents a 33% premium over Millrock’s 20 day trading average. Each unit is comprised of one Millrock common share and one share purchase warrant. Each warrant will entitle the holder to purchase one Millrock common share at a price of Cdn$0.30 for the first year after the closing of the private placement and Cdn$0.40 during the second year. The placement will give Altius an approximate 11% interest in the Company and is subject to regulatory approval.

The funds from the private placement and any warrant exercises and participation in future financings by Altius will be used to fund a strategic alliance (the “SA”) in five specific Areas of Interest (each an “AI”) in Alaska. Millrock will use alliance funds to research each AI and propose an exploration plan for acceptance by Altius. Millrock will be operator of the alliance and will undertake reconnaissance exploration to generate new prospects. Altius will have the opportunity to name any projects proposed within an accepted AOI as a “Designated Project”. The costs of staking a Designated Project will be covered by SA funds and will become subject to a 1% net smelter return (“NSR”) royalty on gold and a 0.5% NSR royalty on all other metals or minerals in favour of Altius. Designated Projects that are acquired from third parties will not be subject to a royalty and Altius and Millrock will share acquisition costs equally. At this stage, Altius may elect to establish a 50%-50% joint venture arrangement with Millrock.

Millrock reports that so long as Altius holds common shares representing at least 5% of the issued and outstanding common shares of Millrock, Altius shall be entitled (but not required) to participate in any future issuances to third parties (other than certain issuances including issuances pursuant to any stock-based compensation plan of Millrock or issuances related to the acquisition of an interest in mineral properties or other assets) of shares or any securities convertible into, exchangeable for or exercisable to acquire common shares, such that Altius will, following the completion of any such issuance, hold the same percentage of common shares as Altius held prior to such issuance.

Both Millrock and Altius, as companies committed to the project generator business model, will also use SA funds to market properties to potential joint venture partners. The goal is to attract other companies to fund exploration to earn an interest in the Designated Projects.

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