Kapa Gold Announces Private Placement

• Kapa Gold Inc. announced a non-brokered private placement on May 28, 2026.
• The offering seeks gross proceeds of up to CAD$2,000,000.
• Units are priced at CAD$0.15 each, consisting of one common share and one transferable warrant.
• Warrants have an exercise price of CAD$0.25 and expire in 24 months from closing.
• An acceleration clause exists if the TSXV closing price exceeds C$0.30 for 20 consecutive trading days.
• Proceeds are designated for the next drill program at the Blackhawk Gold property (Lucerne Valley, California) and general working capital.
• Insiders of the Company will subscribe to Units under the Private Placement.
• Securities are subject to a statutory hold period of 4 months plus one day from Closing Date.
• Regulatory approval from the TSX Venture Exchange is required for closing.

• Dilution Risk: The issuance of approximately 13,333,333 units represents significant dilution relative to a small-cap structure typical of junior miners.
• Discount Pricing: The offering price of CAD$0.15 is below the recent market trading range (CAD$0.16-$0.19 in May 2026), indicating management cannot raise capital at current market levels without discounting. This typically exerts downward pressure on share price as arbitrageurs sell into the offering.
• Cash Flow Necessity: The need for CAD$2M suggests ongoing cash burn associated with exploration activities, confirming the company is in a funding-dependent phase rather than production or revenue-generating phase.
• Insider Participation: While insider subscription is a positive signal of confidence, it does not offset the dilution impact on public shareholders.
• Warrant Overhang: The 24-month warrant term with a $0.25 strike price creates future supply pressure if the stock rallies above current levels, capping upside potential until warrants are exercised or expire.
• Market Context: The financing occurs during a downtrend (stock fell from $0.31 in Jan to $0.16 in May), reinforcing negative sentiment regarding valuation support.

• Company Name: Kapa Gold Inc.
• Flagship Project: Blackhawk Gold property located in Lucerne Valley, California.
• Project Status: Exploration phase; proceeds are explicitly allocated for the "next drill program."
• Operational Focus: The 2022 presentation highlights safety and ethical frameworks but lacks specific project technical details or production guidance.
• Asset Details: No royalty information provided in available data; properties appear to be exploration-stage without disclosed royalty structures.