What’s going on with K2 Gold Corporation?
K2 Gold Corp. (KTGDF) stock rose after the Canadian company signed an option agreement to potentially acquire 100% interest in the Cerro Gordo Gold Project, located next to the company-owned Mojave Project in Inyo County, Calif.
The property has been explored since the mid-1800s by several senior, mid-tier and junior companies including Asamera, Coeur, Phelps Dodge and Newgold and is believed to have “strong potential to host potentially economic polymetallic gold, silver-base metal” and copper mineralization, according to K2. The property has had two resource estimates completed in the mid-1990s.
KTGDF shares gained 4.35% to $0.24 per share on Wednesday morning.
What does this mean for KTGDF?
The financial terms of the deal allow K2 to stake a 100% interest in the Cerro Gordo Project by paying an aggregate of $625,000 over a five-year period, while contract language allows the company to terminate the deal at any time during the option period.
K2 will spend a minimum of $25,000 annually on exploration, development, and mining work on the Cerro Gordo claims, for an aggregate amount of at least $100,000 over a four-year period. K2 has granted the vendor a 3% net smelter returns royalty (NSR) with respect to all minerals produced from the Cerro Gordo Project and can repurchase half of the NSR for $1 million.
"The addition of the Cerro Gordo Project complements the work we are doing at Mojave and provides K2 with a road accessible property,” said Steve Swatton, president and CEO of K2. “As we continue to define additional copper and gold targets at Mojave in anticipation of receipt of the Phase II drill permit, the Company can work in parallel on defining drill targets for immediate access at Cerro Gordo and build on our understanding of the mineral controls of the entire project area."
KTGDF has a Short-Term Technical Rank of 20. Find out what this means to you and get the rest of the rankings on KTGDF!
K2 Gold Corp is a well-financed gold exploration company with projects in SW USA and the Yukon. The company is focused on the Mojave property in California, a 5,830-hectare oxide gold project with base metal targets. The location of Mojave enables the company to have year-round news flow on multiple previously recognized surface gold targets that have been successfully drilled in the past by majors BHP and Newmont. Besides affording immediate drill targets based on the company's soil data integrated with LiDAR and Worldview3 data, the property also has undrilled locations with gold enriched historical trench results including one at the Flores zone which recorded 8.4 g/t gold over 25.6m.
