K2 Gold (TSX-V: KTO) Stephen Swatton on Game Changing Re-Interpretation of the Wels Project and the Search to Add Another Big Project
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is President and CEO of K2 Gold (TSX-V: KTO)(OTC: KTGDF), Mr. Stephen Swatton. Stephen, how are you?
Stephen Swatton: I'm great, thank you very much. Nice to be back on your show here.
Gerardo Del Real: It's good to have you back on the show, Stephen. It's been quite a few months of, frankly, a lot of behind the scenes activity that I want to get into today, but not a lot publicly. You had a news release yesterday that really caught my eye, and the headline reads, “K2 Gold Provides a Technical Update of the Wels Property, Expands the Footprint of the Gold System.” It was a well put together news release, the details were great. But you didn't just expand the footprint of the gold system, you actually re-interpreted the entire project. It now looks like you have a Kaminak-like style system. Is that accurate, Stephen?
Stephen Swatton: Absolutely accurate, Gerardo. It's a game changer for us. What's actually happened here is that right at the end of last season, I think on the last time that I spoke to you, we talked about some samples which were high grade which were in different rock types. They weren't quite fitting into the model that we had before. This is very common when you're dealing with geological situations. I've been in this business 30 years, and it's not uncommon that you start on a project, and by the end of it, it looks completely different. Obviously the rocks haven't really changed, it's just your interpretation changes.
What's happened here is that we realized we have what's called an orogenic style deposit, which is very similar to the 4.5 million ounce Kaminak deposit. That makes my life a lot easier, because a lot of deposits in the Tintina belt, which is sort of a 30 to 40 million ounces plus deposit, are very similar to what we have now. What I was trying to do before was trying to explain something that was a little unusual, and was maybe more like another type deposit, whereas now this makes a lot more sense to us. Actually, the footprint as a result of the antimony and arsenic is much larger than it was before. It's now almost 3 kilometers by 2 kilometers. Down on the southern end, where we haven't even scratched the surface yet, we've taken a few samples, we know what those samples have, but we have to peel away the top layer of vegetation and have a look underneath. I'm really excited about the prospect, the size of it is quite phenomenal. So yep, it's a game changer for us.
Now, the guy who did the re-interpretation, he's 27 years with BHP, 6 years with Gold Fields. He used to be a colleague of mine at BHP, and he was our Senior Geochemist. He has a reputation for actually, if you like, knocking projects. And where you thought you might have something, you end up being a little more disappointed. In our situation, he turned it on its head, and said actually it's larger than you think, and this is what it is. It's really exciting me, Gerardo.
Gerardo Del Real: Now, you're a part of the Discovery Group of companies, right? Frankly, K2 has underperformed share price-wise. You have a market cap right now of approximately $5.2 million dollars Canadian, which to me, I mean, frankly with the team that you have in place seems ... Let's just say there's a compelling risk/reward proposition with K2 Gold at this point.
Stephen Swatton I hear you. Yeah. Absolutely.
Gerardo Del Real: What is the plan moving forward for 2018 to start unlocking some of that value? What do you got planned for this year?
Stephen Swatton: Yeah. What we got to do is we got to get in on the ground on the Wels project, and carry out a geophysics and a soil sampling program with rock sampling. Then later on in the season, once we've got a much better handle on what's going on there, we're going to do a drilling program. But behind the scenes, you're absolutely right. We've been looking at various projects around the world, and I've been flying to a few different continents. Interestingly, one of the better opportunities has landed on our lap as the results of some discussions with a group, a very significant group in Alaska. I don't really want to say too much more about it. We're in discussions with them, and I'm optimistic that we're going to get a result. Myself and the VP of Exploration, we're going to be flying up to northern Alaska in a couple of weeks’ time to follow up further discussions.
But you're right, Gerardo. I'm in a stable of companies: Fireweed, Dunnedin, Bluestone, Northern Empire. With these companies, this time last year, let's face it, they were just another shell type company. Well, this year, they're doing extremely well. What's happened to K2 is we found Wels property's been great, but the feeling is that we have to find something a lot bigger and better to actually project the company to the next level. I think we've stumbled across this. Not stumbled, they pursued us, and we pursued them in Alaska, and hopefully this is going to be the answer. Alongside Wels, I think we've got a good strategy going here forward.
Gerardo Del Real: Excellent. Well, Stephen, it sounds like 2018 is going to be a pivotal year for the company. I can't wait to hear details once, and if, a deal is finalized with this group out of Alaska. Is there anything else that you'd like to add, Stephen? Of course, I'm looking forward to having you back on.
Stephen Swatton: No, I think that's it. You will be seeing quite a bit of news flow over the next few weeks as we explain in more detail what we're up to. But bottom line is we haven't been sitting on our hands and doing nothing. We've certainly been looking for that big project out there, and hopefully this new situation that's occurring in Alaska will pique the shareholders’ interest. Thanks very much, Gerardo.
Gerardo Del Real: Well, you have a team in place that's familiar with the Yukon, familiar with Alaska, and has a track record of serial success, so should be an exciting year, Stephen. Thank you again for your time today.
Stephen Swatton: Thank you very much, Gerardo.