K2 Gold Nears Permitting for 30,000-Meter Drill Program at High-Grade Mojave Project

• K2 Gold's flagship Mojave project is a 5km-long oxide gold trend with high-grade potential, featuring a highlight drill hole of 86.9 meters at 4 g/t gold
• The company is nearing completion of Environmental Impact Statement (EIS) permitting for 30,000 meters of drilling across 120 holes on 30 pads
• K2 has approximately $13 million in outstanding warrants, with management expressing confidence that majority will be exercised to fund the next drilling phase
• The Mojave project sits adjacent to the historic Cerro Gordo mine, California's largest 19th-century silver producer, indicating proven mineralization in the district
• Management has reset the team with experienced mining professionals and maintains a polymetallic focus beyond gold, including copper and silver-lead-zinc targets

K2 Gold Corporation (TSXV: KTO) represents an exploration story centered around its flagship Mojave project in California. Under the leadership of President & CEO Anthony Margarit, a geologist with extensive experience including early involvement in Rio Tinto's Diavik diamond mine discovery, the company has strategically positioned itself for potential breakthrough results.

Margarit's career trajectory provides credibility to K2's exploration approach. As he explains, 

"I'm a geologist. That's my background. The first job that I was ever involved in was with Rio Tinto, ended up working on the discovery of the Diavik diamond mine in the Northwest Territories."

His subsequent work with John Robins and the Discovery Group, including consulting roles that contributed to major acquisitions like Goldcorp's purchase of the Coffee project for over $520 million, demonstrates his ability to identify and develop significant mineral assets.

The management reset in 2022 brought together a team with proven track records. John Robins stepped up as executive chairman, while Jim Paterson, co-founder of Discovery Group, joined the board. Notably, Carolyn Clark Loder, who spent most of her career with Freeport McMoRan focusing on permitting and tribal engagement, has proven invaluable during the complex EIS process.

The Mojave Project: Asset Overview

The Mojave project spans over 6,000 hectares and represents a true polymetallic system with significant historical precedent. The property sits directly adjacent to the historic Cerro Gordo mine, which Margarit describes as "the largest silver producer in California in the late 19th century." The historical context provides important validation: 

"At its peak production in 1874, that mine was producing 18 tons of silver bullion a day. That translated into 300 bullion bars a day valued at $355 in 1875."

Current exploration focuses on the eastern gold trend, where K2 achieved its standout result of 86.9 meters at 4 grams per ton gold. However, the project's scope extends far beyond this single target. Margarit outlines the broader potential:

"We've got three other gold zones that are outlined and well defined. We've got four copper target areas. One of them is almost 5 km long and we've got four silver-lead-zinc targets that are very clearly defined."

The mineralization characteristics suggest a robust system with near-surface oxide potential. Importantly, "mineralization starts at surface" across a 5-kilometer trend, with structural continuity supported by geophysics. Recent sampling results reinforce the project's potential, with samples "a kilometer and a half north of our highlight hole that ran over 12 ounces per ton, so 374 grams per ton on the same structure."

Permitting Progress & Regulatory Framework

Perhaps the most significant near-term catalyst for K2 Gold involves the completion of its Environmental Impact Statement (EIS) permitting process. This represents the highest level of environmental permitting in the United States for exploration projects, a status that initially created challenges but ultimately provides strategic advantages. Margarit explains the elevation to EIS level:

"It was the first time that we're aware that a program of this scale has been elevated to this status. The Bureau of Land Management knows they're going to get hit with a lawsuit by an NGO when they issue a drill permit. The EIS is the most defensible product they have when they're standing in front of a judge."

The permitting scope covers "just shy of 13 acres of disturbance" across 30 drill pads for 120 holes totaling 30,000 meters. Critically, this represents "a previously disturbed area" where the company is "reactivating a historic road that was reclaimed 19 years ago." The presence of over 200 historic workings on the property further supports the brownfield nature of the project.

Recent progress appears promising. The draft EIS revealed that "the BLM's preferred alternative was K2's plan of operations," representing a significant milestone. Following completion of the 45-day public comment period, management submitted final comments and now awaits publication of the final EIS, which will constitute the permitting decision.

Capital Strategy

K2 Gold's financial strategy centers around warrant exercises to fund upcoming drilling programs. The company currently has approximately $13 million in outstanding warrants, with a significant portion set to expire on October 1st. Many of these warrants include acceleration clauses that could trigger earlier exercise. Margarit outlines the strategic approach:

"We had a strategy in mind and the strategy was if we could have all of the warrants we had outstanding priced the same throughout this couple years to permit Mojave... when it came time to fruition and we were close to the permit, we expect to get a decent bounce on share price or recovery on the share price and those warrants we could look at as a built-in financing as opposed to a poison pill."

Recent warrant exercises totaling just under $3 million provide validation of this approach. Management expresses "pretty high confidence level that majority of those will come in" regarding remaining warrant holders. If successful, this strategy would provide full financing for the planned drilling program without dilutive equity raises or strategic partnerships that could reduce upside potential.

Interview with Anthony Margarit, CEO of K2 Gold

Exploration Strategy

The upcoming drilling program represents a significant step-up in scope and depth compared to previous work. The 30,000-meter program across 120 holes will average 300 meters in depth, compared to the historical average of 160 meters. This deeper penetration will test for sulfide mineralization below the current oxide zone. Margarit emphasizes the program's strategic design:

"The whole point of this program is to prove the continuity of mineralization. There's still so much potential out here that I don't want to get focused on trying to define a resource when there's still a lot of exploration to do."

The technical approach reflects confidence in the geological model. Structural mapping and geophysics support the interpretation of structures that are "steeply dipping stacked structures... anywhere from 20 to 50 meters apart." This suggests multiple mineralized zones rather than dependence on a single structure.

Metallurgical testing, while preliminary, shows encouraging results. Basic shake tests achieved "high 90% recoveries... 96%" without requiring bottle roll tests or complex processing. This suggests standard milling could provide effective mineral recovery.

Market Positioning

K2 Gold operates in a favorable jurisdictional and market environment. The project's location in Inyo County, California, benefits from existing mining infrastructure and supportive local relationships. Margarit notes "great local support in the county in Inyo" and proximity to operating mines including Castle Mountain and the recently reactivated Golden Queen mine.

The broader market context for critical metals supports K2's polymetallic approach. As Margarit observes, "Society's learned a lot. It seems like there's been a true shift in people's thinking and acceptance" regarding domestic mineral supply. This shift, accelerated by supply chain disruptions and geopolitical tensions, creates a more favorable environment for domestic exploration and development.

The company's connection to successful precedents provides additional market credibility. Chris Taylor, an adviser to K2 who previously held the Mojave project during his time with Great Bear Resources, recently highlighted the project's potential "to host multiple mines" in a public interview, providing third-party validation of the asset's quality.

The Investment Thesis for K2 Gold

• Exceptional Grade Potential: The Mojave project delivers standout drill results including 86.9 meters at 4 g/t gold, with recent surface samples reaching 374 g/t gold, indicating world-class grade potential across a 5km trend
• Near-Term Catalysts: Imminent EIS permit approval will unlock 30,000 meters of drilling, representing the highest level of environmental permitting in the US and providing strong legal defensibility against future challenges
• Built-in Financing Structure: Approximately $13 million in outstanding warrants provides non-dilutive funding pathway, with management expressing high confidence in exercise rates as share price appreciates with permit success
• Proven District with Infrastructure: Location adjacent to California's largest historic silver producer (Cerro Gordo mine) in an active mining district with existing infrastructure and strong local government support
• Polymetallic Optionality: Beyond gold, the project hosts four copper targets (one spanning 5km), four silver-lead-zinc targets, and additional gold zones, providing multiple value drivers and commodity diversification
• Experienced Management Team: Leadership includes Discovery Group veterans with track record including $520 million Coffee project sale to Goldcorp, supported by permitting specialist from Freeport McMoRan
• Technical Upside: Drilling program will test deeper sulfide potential below current oxide zone, with structural geology indicating multiple stacked mineralized zones rather than single-structure dependency
• Strategic Flexibility: EIS approval enables future exploration expansion through amendments rather than new permits, reducing permitting risk for district-scale development

The domestic critical minerals supply chain represents one of the most compelling investment themes in modern mining, driven by geopolitical tensions, supply chain vulnerabilities, and the energy transition. K2 Gold's Mojave project sits at the intersection of these trends, offering exposure to gold, copper, and other critical metals within a friendly US jurisdiction.

The COVID-19 pandemic and subsequent supply chain disruptions highlighted America's dependence on foreign mineral sources, leading to bipartisan support for domestic mining development. Recent legislation including the Inflation Reduction Act and Infrastructure Investment and Jobs Act provides unprecedented federal support for domestic mineral projects, while ongoing tensions with China reinforce the strategic importance of supply chain security.

California's mining-friendly policies at the county level contrast sharply with the state's reputation for regulatory complexity. Inyo County's support for responsible mining development, combined with existing infrastructure from historical mining operations, creates an optimal environment for modern exploration companies. The presence of operating mines in the district validates both the geological potential and regulatory feasibility.

From a technical perspective, polymetallic systems like Mojave offer investors exposure to multiple commodity cycles while reducing single-metal price risk. The project's oxide nature suggests lower processing costs and faster potential development timelines compared to complex sulfide deposits. As Margarit notes, the project represents an opportunity to "unlock the potential" of a district that produced massive quantities of metals in the 19th century using primitive technology.