K2 Gold’s Mojave drilling puts the next ounces to the test

Cashu Research has initiated coverage of K2 Gold Corporation with a Speculative Buy rating and a C$1.25 price target. The report is commissioned and paid for by K2 Gold Corporation, which paid for its preparation and distribution. Cashu Research rates the stock at C$0.84, the verified close on 14 September 2026, and sees approximately 49% upside over a 12-month horizon. This is the research house’s view, not Cashu Finance advice.

The investment case centres on Mojave, a 100%-owned oxide-gold project in Inyo County, California. K2 has mapped a mineralised corridor of more than 6.5 kilometres along the Eastside Gold Trend. At Dragonfly, one of Mojave’s targets, mineralisation has been confirmed over 400 metres of drilled strike and remains open along strike and at depth.

The project’s permitting is an important part of the story. The Bureau of Land Management issued a Record of Decision authorising exploration drilling from up to 22 sites under a Plan of Operations. That authorisation covers exploration drilling, not mine construction or operation. The programme was built on years of baseline work and includes Tribal monitoring at active drill sites.

The geological appeal is the combination of grade, oxidation and proximity to surface. Cashu Research says Dragonfly gold begins within metres of the collar and is completely oxidised through the high-grade interval. The analyst view is that relatively small tonnages could be economic, although K2 has not published an economic study or metallurgical testwork.

The initial Dragonfly results have been strong. In three holes reported on 18 August 2026, DF26-020 returned 39.62 metres at 5.35 g/t gold, including 25.91 metres at 7.14 g/t. DF26-019 returned 10.67 metres at 7.75 g/t, while DF26-018 returned 18.29 metres at 3.77 g/t, including 7.62 metres at 7.48 g/t.

Four further holes from a second pad followed on 9 September 2026. DF26-023 returned 27.43 metres at 4.08 g/t, including 15.24 metres at 5.30 g/t. DF26-024 delivered a higher-grade interval of 3.05 metres at 17.55 g/t, followed by 28.95 metres at 2.03 g/t. DF26-021 and DF26-022 returned 32.01 metres at 2.02 g/t and 33.53 metres at 1.63 g/t, respectively.

Cashu Research also highlights the consistency within DF26-020. Of 26 consecutive 1.52-metre samples across the 39.62-metre interval, 23 exceeded 1 g/t, 16 exceeded 5 g/t and seven exceeded 7 g/t, with a peak of 14.9 g/t. These are drilled widths; true widths remain unknown, an important qualification for any estimate of future tonnes.

The programme is still at an early stage. K2 has completed 23 holes for 4,182 metres from a planned 14,000-metre campaign, with 16 holes pending assay. Eight pending holes are from Dragonfly pads DF-G, DF-M and DF-A, while eight are from the Newmont Zone. The rig has moved to Newmont, where an earlier hole, NM20-011, returned 1.64 g/t over 41.15 metres.

Mojave has no mineral resource estimate, so Cashu Research values the project using conceptual scenarios rather than a conventional resource-based valuation. Its base case assumes Dragonfly plus three repeats along the broader trend, producing a scenario of 2.0Moz at C$150 per ounce. On 263.3 million fully diluted shares, that produces C$327 million of equity value, or C$1.24 per share, rounded to the C$1.25 target.

The report stresses that these ounce figures are Cashu Research assumptions, not K2 disclosures, and that the valuation has no explicit probability weighting. At K2’s C$0.84 share price, the report estimates that the market is already paying for approximately 1.2Moz. The central question is therefore whether the Eastside Gold Trend can deliver more than that implied amount.

The scenario range is wide. Cashu Research’s bear case is C$0.48 per share on 1.0Moz at C$100 per ounce. Its bull case reaches C$2.10 per share on 3.0Moz at C$175 per ounce. Those outcomes depend on exploration success, not on an established reserve or resource.

K2 reported more than C$27 million of cash as at 18 August 2026 against a C$9.8 million company-wide 2026 exploration budget. The company reported no warrants outstanding, while the fully diluted share count includes approximately 21.1 million options alongside 242.2 million shares on issue. Cashu Research says the current burn rate funds the company through 2027 and describes the 14,000-metre programme as fully permitted and fully funded.

The report also assigns no value to K2’s other projects, including Si2, Wels and Wolf. These assets could provide additional exploration optionality, but the valuation rests on the Eastside Gold Trend rather than giving credit for those projects.

The main risk is that seven successful holes do not yet constitute a deposit. True widths are unknown, and steeply dipping structures drilled at angles between −50° and −85° could make reported widths look wider than their actual thickness. Grade may also weaken away from the discovery area, leaving the 400 metres of drilled strike short of the ounce count required by the base case.

Metallurgy is another unresolved issue. Oxidation may support a heap-leach development concept, but no recovery data or processing route has been disclosed. Oxide gold is not automatically heap-leachable, and clays, carbonate and preg-robbing carbon could affect recoveries. In addition, an exploration permit is not a mine permit, and future development in California could face further cultural, biological and permitting constraints.

The next results should clarify whether the grade extends beyond the two initial pads. The 16 pending holes, particularly the first Newmont assays, are the immediate test of the trend. Metallurgical work, a maiden resource estimate and evidence that Dragonfly-style grades repeat along the corridor would strengthen the valuation. Conversely, weaker assays, poor recoveries or a sustained fall in gold prices would challenge the C$1.25 scenario. Cashu Research concludes with a Speculative Buy rating because the programme is funded and permitted, while recognising the absence of a resource, unknown true widths and untested metallurgy.