Sponsored Q&A: K2 Gold assays build on California Mojave discovery

K2 Gold’s (TSXV: KTO) Mojave project is back in focus after the company reported the first drill results from this year’s 14,000-metre exploration program. The Northern Miner‘s Devan Murugan spoke with CEO Anthony Margarit about high-grade intercepts extending its Dragonfly discovery in California.

Devan Murugan: Anthony, thanks very much for your time.

Anthony Margarit: Thank you very much, Devan. 

DM: These are the first holes from the 2026 campaign. Beyond the headline grades, what did they tell you that perhaps even surprised you and the technical team?

AM: We’re following up on some great results from our 2020 and 2021 drilling. Back then, the best intercept was 86.9 metres grading 4 grams per tonne gold.

The holes we released in August all came from the same drill pad and are the first results from a 14,000-metre drill program. Importantly, this was a true 40-metre step-out, so we’re drilling completely new ground.

It’s important for people to understand the background of the Mojave project. This is a 6,000-hectare (60-sq.-km) property that is 100% owned by K2. We’re also very well financed. As of last late August, we still had $27 million (US$19.5 million) in the treasury.

Our best intercept was 39.6 metres grading 5.35 grams per tonne gold. What excites us most is that we’re seeing underground grades in an oxide gold deposit where mineralization starts right at surface.

We’re still in oxide material down to at least 200 metres and haven’t yet reached the sulphide interface. It’s rare to see that in an oxide system. And this is just one part of a 6.5-km-long corridor of mineralization.

DM: Investors often see one good drill hole and wonder whether it’s simply luck. Why do these three holes give you confidence you’re seeing a mineralized system rather than an isolated high-grade pocket?

AM: There’s been a fair amount of historical work in the area. As I mentioned, Dragonfly is only one target along this corridor of mineralization. Right now, the drill is moving south to the Newmont target, which is about 3.5 kilometres south of Dragonfly along the same corridor.

The grades are fantastic. We believe this property has the potential to become a world-class deposit.

We’re focused on the Seibert Gold Trend right now, but we’ve also got three other very distinct and very strong mineralized trends. When you’re looking for a world-class deposit, you want to see grade, which we’re seeing in both our recent drilling and previous campaigns. You also want scalability — the ability to continue making discoveries.

These long, predictable corridors of mineralization are exactly what we’re looking for.

Metallurgy is another important factor. We’re currently carrying out cyanide solubility testing on the three drill holes we’ve just reported. Most of our previous metallurgical work has been very positive, with recoveries between 96% and 98%.

DM: One thing that stands out is the oxide nature of this mineralization. For investors who aren’t geologists, why is oxide gold potentially significant when evaluating the economics of a future mine?

AM: It’s the most cost-effective style of mineralization for extracting gold.

Typically, you’re looking at bulk mining, usually by open pit, with heap-leach processing. That gives you the ability to extract the gold economically.

At current gold prices, oxide deposits grading around 0.8 gram per tonne can be economic. Historically, the cut-off grade was closer to 1 gram per tonne, but today material grading around 0.3 gram is regularly being placed on heap leach pads, and in some operations even material grading around 0.1 gram per tonne can be economic.

DM: You’ve completed only 15 holes so far, yet another 12 assays are still pending. At this stage, what are you hoping those next results will answer?

AM: We’re quite confident in what we’re seeing.

Every hole we’ve drilled has been a step-out. We’re really starting to build out this corridor of mineralization.

As it stands now, it’s about 6.5 km long and at least 400 metres wide. Importantly, this isn’t one vein or one structure that we’re chasing. These are multiple parallel mineralized structures.

They dip steeply in the north, but as we move south towards the Newmont target they flatten to around 30 degrees. That’s simply the nature of the system.

Another important point is the host rock. The mineralizing fluids entered exceptionally clean limestone, which acts almost like a sponge for mineralization. Most of the gold is hosted within these silty carbonate units.

DM: California has a reputation as one of the more challenging jurisdictions for permitting exploration. Having crossed that hurdle, how much has that de-risked the project going forward?

AM: Very significantly.

We permitted the Mojave project through the Environmental Impact Statement process. It was a rigorous, multi-year program.

K2 is part of Discovery Group, which has a strong history of creating shareholder value through companies like Kaminak, Great Bear Resources and Northern Empire.

We wouldn’t have put in the blood, sweat and tears to get this project permitted if we didn’t believe it was something very special.

California can certainly be challenging. We’re operating mainly on federal land, with some patented claims as well. It was a rigorous process to get through, but today we’re effectively one step below a permit to mine.

That has de-risked the project significantly, and it’s great to finally be drilling again.

DM: Gold prices remain historically strong and we’ve seen renewed investor appetite for quality exploration stories. Does today’s market allow companies like K2 to think differently about advancing projects than perhaps two or three years ago?

AM: I guess yes and no.

You can’t depend on gold prices staying where they are today. It’s great to see, but we always ask ourselves whether this project would still be economic at US$2,000 gold.

Based on the grades we’re seeing, and if we continue proving out the strength of the system through this drill program, then yes, we believe it would be very economic.

DM: Finally, if investors were to remember just one thing from these first drill results, what would you want that message to be?

AM: Grade and multiple target areas.

We’re focused on a 6.5-km oxide gold trend right now, but in the very near future we’ll also be drilling the Morningstar target, which is a 2-km-long polymetallic trend.

We’ve seen rock samples there grading more than 2,000 grams per tonne silver, with associated gold grades ranging from 2 to 13 grams per tonne and about 3% copper. It’s a completely different style of mineralization.

We’ve also got the Soda Valley and Stega trends farther south, which display more skarn-style polymetallic mineralization with copper, gold and silver.

This is a big system with the potential to become a world-class deposit.

The reality is we’ve got a couple more years of drilling ahead of us. It’s a very exciting story, and we believe the opportunity to develop this project is real.

DM: Anthony, it certainly sounds compelling. We’ll be following the story closely. Thank you very much for joining us.

AM: Thank you, Devan. I look forward to following up.

The preceding sponsored content Q&A is paid for by K2 Gold and was produced in collaboration with The Northern Miner. For more information visit https://k2gold.com/.