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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

Commission File No. 0-23042

MK GOLD COMPANY
(Exact name of registrant as specified in charter)

        Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        On November 8, 2002, there were 37,395,649 outstanding shares of the registrant's common stock, par value $.01 per share.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

        You should read the following unaudited interim consolidated financial statements and the accompanying notes together with our Annual Report on Form 10-K for the year ended December 31, 2001. Our 2001 Annual Report contains information that may be helpful in analyzing the financial information contained in this report and in comparing our results of operations for the three and nine month periods ended September 30, 2002 with the same periods in 2001.

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MK GOLD COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Thousands of dollars except per share data)

The accompanying notes are an integral part of the consolidated financial statements.

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MK GOLD COMPANY
CONSOLIDATED BALANCE SHEETS
(Thousands of dollars except per share data)

The accompanying notes are an integral part of the consolidated financial statements.

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MK GOLD COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Thousands of dollars)

The accompanying notes are an integral part of the consolidated financial statements.

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MK GOLD COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
For the nine months ended September 30, 2002 and 2001
(Thousands of dollars except per share data)

The accompanying notes are an integral part of the consolidated financial statements.

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MK GOLD COMPANY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(All dollar amounts in thousands)

1.    UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

        The interim financial information included herein is unaudited; however, the information reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for the fair presentation of the consolidated financial position, results of operations and cash flows for the interim periods. The consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2001, which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2001 ("2001 10-K"). The results of operations for the nine months ended September 30, 2002 are not necessarily indicative of the results to be expected for the full year. The consolidated balance sheet at December 31, 2001 was extracted from the audited consolidated financial statements contained in the 2001 10-K and does not include all disclosures required by generally accepted accounting principles for annual consolidated financial statements.

2.    MINING JOINT VENTURE

        The Company owns a 25% undivided interest in the Castle Mountain Venture ("CMV"), which prior to May 2001 operated a gold mine in San Bernardino County, California. During the second quarter of 2001, gold reserves at the mine were exhausted, mining operations ceased, and mine closure and reclamation activities began. Mine closure and reclamation activities continued during the third quarter of 2002. The results for the CMV have been proportionally reflected in the accompanying consolidated financial statements.

        Gold production at the Castle Mountain Mine continued during the third quarter of 2002 as residual gold was recovered from the leach pads during the closure and reclamation phase. Residual gold production is expected to continue at least through the end of 2003.

3.    UNCONSOLIDATED AFFILIATE

        In July 2000, the Company acquired 20 of 39 limited partner units of Peru Exploration Venture LLLP, an Arizona limited liability limited partnership. The partnership was formed in June 2000 with Bear Creek Mining Company, an Arizona corporation, as the general partner. The principal objective of the partnership is to acquire precious and base metal properties in Peru. The Company's commitment to the partnership was $1 million over a two-year period, which it had fully funded as of December 31, 2001.

        The Company's share of loss from the partnership for the three and nine month periods ended September 30, 2002 was $21 and $301, respectively. The Company's share of loss from the partnership for the three and nine month periods ended September 30, 2001 was $210 and $442, respectively.

        On May 29, 2002, the partnership entered into a letter agreement with EVEolution Ventures, Inc., a Canadian-based company, pursuant to which EVEolution Ventures agreed to acquire all outstanding limited partnership interests and all outstanding shares of Bear Creek Mining Company in exchange for shares of EVEolution. If this transaction is completed, the Company will be a minority shareholder of EVEolution.

4.    PROJECT DEVELOPMENT

        The Company, through its wholly owned subsidiary Cobre Las Cruces, S.A., owns the exploration and mineral rights to the Las Cruces project, a development stage copper project in the Pyrite Belt of Spain. The Las Cruces project was acquired by the Company on September 1, 1999 when the Company

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acquired Cobre Las Cruces, formerly known as Riomin Exploraciones, S.A., from Rio Tinto plc. All development costs since the date of acquisition, including interest and costs for the feasibility study, have been capitalized. The principal source of funding for project development has been the Company's credit facility with Leucadia National Corporation.

        In May 2002, the Department of Environment of the Regional Government of Andalusia, Spain issued a positive Declaration of Environmental Impact for the Las Cruces project. Receipt of the positive declaration is a key milestone in the project's permitting process and indicates the government's environmental approval of the project. The positive declaration is also a prerequisite for the regional government to issue a mining concession and allows the regional water authority to finalize the processing of the water permit applications. The mining concession will give the Company the mining rights and access to all the necessary utilities required to develop the project.

        In connection with its review of the Company's mining concession application, the Regional Government of Andalusia has requested the Company to undertake a program of additional geotechnical studies to supplement the information contained in the feasibility study. This work will delay the granting of the mining concession. The Company expects all necessary operating permits to be granted by mid 2003.

        Mining at the Las Cruces project will be subject to permitting, obtaining financing, engineering and construction. Although the Company believes necessary permitting for the project will be obtained, the Company cannot guarantee that such will be the case, and no assurance can be given that the Company will obtain financing for the project. Further, there may be other political and economic circumstances that could prevent the Company from completing development of the project.

5.    INDUSTRY SEGMENT INFORMATION

        The Company is not economically dependent on a limited number of customers for the sale of its gold because gold commodity markets are well-developed worldwide. The Company operates primarily in two industry segments, gold sales and copper project. The Company operated in a third industry segment, mining services, through the second quarter of 2001, when mining operations ceased at the Castle Mountain Mine. All of the Company's mining service revenues were derived from the CMV. During 1999, the Company acquired the Las Cruces project, which is a copper project in the development stage.

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6.    RELATED PARTY TRANSACTIONS

        Effective September 30, 2002, the Company's credit facility with Leucadia National Corporation (the "Credit Facility") was amended to increase the amount of the facility to $40,000 and to extend the expiration to January 2, 2004. Interest and commitment fees paid to Leucadia under the Credit Facility for the three and nine month periods ended September 30, 2002 were approximately $370 and $1,080, respectively, compared to $456 and $1,477 for the same periods in 2001. Capitalized interest relating to the Las Cruces project for the three and nine month periods ended September 30, 2002 was approximately $365 and $1,065 respectively, compared to $454 and $1,466 for the same periods in 2001. At September 30, 2002, the Company had outstanding borrowings under the Credit Facility of $30,900. Loans outstanding under the Credit Facility bear interest equal to the prime rate and interest and commitment fees are payable quarterly. The prime rate at September 30, 2002 was 4.75%.

7.    LEGAL CONTINGENCIES

        The Company is subject to various litigation which arises in the course of its business. Based on discussions with counsel, management is of the opinion that such litigation will have no material adverse effect on the consolidated financial position of the Company, its consolidated results of operations or liquidity.

8.    INCOME TAX PROVISION

        Due to past net operating losses, the Company has recorded a gross deferred tax asset of approximately $18,600 as of September 30, 2002. The Company has also recorded a valuation allowance against a substantial portion of this asset, resulting in a net deferred tax asset of $1,600. Deferred tax liabilities are partly offset by this deferred tax asset, resulting in a net deferred tax liability of $3,967. A portion of the net operating losses was used to offset income generated during the nine months ended September 30, 2002.

9.    BANKRUPTCY RECOVERY

        As part of a court approved bankruptcy settlement, unsecured creditors of Washington Group International, Inc. ("Washington Group") will receive 15% of the common stock of Washington Group. As an unsecured creditor, in the second quarter of 2002, the Company received an initial distribution of 13,889 shares and warrants to purchase an additional 23,667 shares of Washington Group, with a combined market value of $298. The Company recorded this amount as income in the second quarter. In the third quarter of 2002, the Company received an additional distribution of 4,845 shares and warrants to purchase an additional 8,257 shares of Washington Group, with a combined market value of $67. The Company recorded this amount, net of related legal expenses, as income in the third quarter. The securities are classified as available for sale and any unrealized gains and losses are reflected as a component of other comprehensive income.

10.  GAIN (LOSS) ON DISPOSAL OF ASSETS

        As part of closure activities at the Castle Mountain Mine, mining equipment and assets were disposed of during the nine months ended September 30, 2002, resulting in a gain of $566. Proceeds from asset sales have increased the balances in restricted cash and investment securities since year end.

        During the third quarter of 2002, the Company decided not to renew a purchase option on a portion of the land needed to develop the Las Cruces project. Management believes that the purchase price of the option is significantly above the market value of the land and that the Company will be able to acquire the land either through negotiations with the landowner or through expropriation. The Company wrote off the book value of the purchase option as a loss on disposal of assets of $884 in the third quarter.

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11.  ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

        The following is a summary of accumulated other comprehensive income (loss) at September 30, 2002 and December 31, 2001:

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        This section discusses our consolidated financial condition, liquidity and capital resources and results of operations. You should read this analysis in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2001. This section also contains certain forward-looking statements that involve risks and uncertainties, including statements regarding our plans, objectives, goals, strategies and financial performance. Our actual results could differ materially from the results anticipated in these forward-looking statements as a result of factors set forth under "Cautionary Statement for Forward-Looking Information" below.

General

        On September 1, 1999, we acquired the entire share capital and subordinated debt of Riomin Exploraciones, S.A., from Rio Tinto plc. After this acquisition, we changed the name of Riomin Exploraciones, S.A., to Cobre Las Cruces, S.A. Cobre Las Cruces has permits to investigate four contiguous areas in southwestern Spain, one of which contains the Las Cruces copper deposit. Las Cruces is 20 kilometers northwest of Seville, in an area with a well-developed infrastructure that will support the project's needs for water, power and transportation.

        We forecast that the Las Cruces project will be a low cost producer, with an operating cash cost per pound of copper produced estimated to average $0.33, based on the feasibility study relating to the project. Based on an assumed copper price of $0.80 per pound, we believe the Las Cruces project will have the potential for strong margins and after-tax internal rate of return, assuming that we fund 70% of the project's capital expenditures through debt financing. As of November 8, 2002, the spot price for copper was approximately $0.70 per pound. However, based on historical fluctuations in copper prices, which have ranged from a high of $1.60 in 1989 to a low of $0.59 in 2001, we believe $0.80 per pound is a reasonable price for purposes of estimating the internal rate of return of the project.

        Our forecasts regarding the Las Cruces project are subject to a number of risks and uncertainties. Actual results could differ materially from our forecasts as a result of our need for financing, potential delays in development of the Las Cruces project, the imprecision of estimates, the uncertainty of government subsidies, uncertainties associated with closure guarantees or other requirements that may be imposed by the Spanish government, volatility of copper prices and other factors, including those set forth under "Management's Discussion and Analysis of Financial Condition and Results of Operations—Cautionary Statement for Forward Looking Information."

        In June and July 2001, we submitted subsidy applications to central and regional governments in Spain. Upon completing their review of the applications, these governments will indicate the amount of subsidies they will recommend for grant, if any. If the total subsidies recommended for grant exceed 50 million euros, or approximately $49 million, the subsidies must be approved by a commission of the European Union.

        We submitted a water permit application in December 2000 to the regional water authority of the Spanish central government. In March 2001, we submitted to the government of Andalusia a mining concession application accompanied by environmental impact and project feasibility studies. We submitted additional water permit applications in April and May 2001, including a permit application for effluent discharge. We have had frequent and responsive interaction with local, regional and central governments in Spain to resolve technical issues and to facilitate the permitting process.

        In May 2002, the Department of Environment of the Regional Government of Andalusia, Spain issued a positive Declaration of Environmental Impact for the Las Cruces project. Receipt of the positive declaration is a key milestone in the project's permitting process and indicates the

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government's environmental approval of the project. The positive declaration is also a prerequisite for the regional government to issue a mining concession and allows the regional water authority to finalize the processing of the water permit applications. The mining concession will give us the mining rights and access to all the necessary utilities required to develop the project. In connection with its review of the mining concession application, the Regional Government of Andalusia has requested us to undertake a program of additional geotechnical studies to supplement the information contained in the feasibility study. This work will delay the granting of the mining concession. Nevertheless, we expect all necessary operating permits to be granted by mid 2003. While we believe that we will receive the necessary permits, we could encounter unexpected difficulties or delays. Therefore, we cannot assure you that we will receive them on a timely basis or at all.

        We need to purchase 1,174 hectares, or approximately 4.5 square kilometers, of land and associated rights-of-way to complete the final processing of certain of our water permit applications. If negotiations with landowners are unsuccessful, we will initiate proceedings to cause the regional government to expropriate the land. Expropriation is commonly used in Spain, in accordance with government laws. Land acquisition activities are expected to begin once the necessary permits are granted and to take approximately nine months to complete. Construction and mine development can begin before all land acquisitions are finalized.

        Bechtel International, Inc., an international engineering and construction company, completed the feasibility study for the Las Cruces project in 2001. The feasibility study incorporated the results of an environmental impact study completed by FRASA Ingenieros Consultores, a team of national and international environmental engineering experts based in Madrid.

        Since our acquisition of the Las Cruces project, we have focused our efforts primarily on developing the project into a low cost, environmentally responsible copper mine. We have given environmental considerations high priority in project design and development at the Las Cruces project. Waste dumps will be continually contoured and reclaimed to enhance the appearance of the Las Cruces project. Protection of the area's water resources affected by the mine has been carefully studied and planned. Water Management Consultants, a hydrological engineering and design company, developed the water management plan, including the extraction system for dewatering the overlying sandstone aquifer and re-injection into the aquifer. Water needed to process the ore will be pumped 15 kilometers from a sewage processing plant and treated before use.

        Funding for the development and advancement of the Las Cruces project has principally come from our operating cash flows, cash reserves and credit facility with Leucadia National Corporation. We estimate that the total capital costs to bring the Las Cruces project into commercial production are approximately $290 million, including working capital, land purchases and contingencies, but excluding interest and other financing costs. Our current cash resources will not be sufficient to cover all projected expenses necessary to bring the Las Cruces project into commercial production.

        We are evaluating various financing alternatives for projected costs and expenses associated with the Las Cruces project. We will not be able to fund the project solely from debt financing. We will need to raise a significant amount of the funds from equity investors, which we are considering doing through a subscription rights offering to our existing stockholders. In such a rights offering, our stockholders would receive the right to purchase additional shares of our common stock on a pro rata basis. We believe that a rights offering is an excellent way to raise equity capital because it provides our stockholders with the opportunity to avoid dilution by participating in the issuance of shares of our common stock on a pro rata basis. Although we believe that a rights offering is a viable option, we cannot assure you that we will actually commence a rights offering or that, if commenced, such a rights offering will be successful. If we commence a rights offering, we do not expect to do so until the key water permits have been obtained for the Las Cruces project.

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        We are also considering other sources of financing, including product off-take agreements, which are a type of product sales agreement, supplier financing and equipment leasing. We plan to secure debt financing for approximately 70% of the project's capital requirements. We expect debt financing to be primarily funded through a syndicated project financing facility using a lead international bank experienced in mining project financing.

        While we believe that we will be able to obtain financing for the Las Cruces project, we cannot assure you that we will be able to obtain financing on favorable terms or at all. If we are unable to obtain financing when needed, the development of the Las Cruces project could be delayed significantly. Any significant delay could increase the costs of developing the Las Cruces project or prohibit us from completing development of the project.

Results of Operations

        Gold Production.    Our attributable share of gold production from the Castle Mountain Venture for the three and nine month periods ended September 30, 2002 was 3,456 ounces and 12,268 ounces, respectively, compared to 3,298 ounces and 15,097 ounces for the three and nine month periods ended September 30, 2001. This represents an increase in production of 5% for the three month period and a decrease in production of 19% for the nine month period, compared to the same periods in 2001. The decrease in production for the nine month period is due to the completion of mining activities at the Castle Mountain Mine in May 2001. Future gold production will continue to decline as residual gold is recovered from the leach pads during the closing and reclamation phase at the mine. Residual gold production is expected to continue at least through the end of 2003.

        Sales Activity.    Product sales revenue for the three and nine month periods ended September 30, 2002 was $1.5 million and $4.1 million, respectively, compared to $1.3 million and $5.1 million, respectively, for the same periods in 2001. The increase in revenue for the three month period is primarily due to higher realized gold prices. The decrease in revenue for the nine month period is due to declining gold production, partially offset by higher realized gold prices. Product sales revenue for the three and nine month periods ended September 30, 2001 includes the recognition of $0.2 million and $0.5 million of deferred revenue. Future product sales revenue will decline as residual gold production decreases during the reclamation and closure phase at the Castle Mountain Mine.

        During the three and nine month periods ended September 30, 2002, no ounces of gold were sold under forward sales contracts and 4,770 and 13,240 ounces of gold, respectively, were sold on the spot market. During the three and nine month periods ended September 30, 2001, 4,300 and 7,200 ounces of gold, respectively, were sold under forward sales contracts and 9,700 ounces of gold were sold on the spot market during the nine month period. We had no ounces of gold sold under forward sales contracts as of September 30, 2002. While we have used forward sales contracts in the past, we expect that our gold sales from residual production at the Castle Mountain Mine will be made primarily at spot prices.

        For the nine month period ended September 30, 2002, the average price realized per ounce of gold was $306, compared to $276 per ounce for the nine months ended September 30, 2001. The average spot price for the nine month period ended September 30, 2002 was $306 per ounce.

        There was no revenue from mining services for the nine month period ended September 30, 2002, compared to $1.3 million for the nine month period ended September 30, 2001. As a result of the completion of mining activities at the Castle Mountain Mine in May 2001, there will be no future mining services revenue from the mine.

        Gross Profit.    We recognized a gross profit from product sales for the three and nine month periods ended September 30, 2002 of $1.0 million and $2.0 million, respectively, compared to a gross profit of $0.1 million and $0.3 million, respectively, for the same periods in 2001. The higher gross

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profit in 2002 is due to higher realized gold prices and lower production costs. Future gross profit will decline as residual gold production decreases at the Castle Mountain Mine.

        There was no gross profit from contract mining operations for the three and nine month periods ended September 30, 2002, compared to gross losses from contract mining operations of $0.04 million and $0.06 million for the same periods in 2001. Mining operations were completed at the Castle Mountain Mine in 2001.

        Exploration Costs.    Exploration costs for the three and nine month periods ended September 30, 2002 were $0.2 million and $0.5 million, respectively, compared to $0.2 million and $0.6 million, respectively, for the three and nine month periods ended September 30, 2001. The decrease in expenditures is due to fewer properties being evaluated. During the nine months ended September 30, 2002, we focused our exploration efforts on exploration programs in Nevada and Spain.

        General and Administrative Expenses.    General and administrative expenses decreased 31% and 32%, respectively, for the three and nine month periods ended September 30, 2002, compared to the same periods in 2001. The lower expenses in the three and nine month periods ended September 30, 2002 were due to higher legal and non-recurring payroll related costs in the 2001 periods.

        Gain (Loss) on Disposal of Assets.    As part of closure activities at the Castle Mountain Mine, mining equipment and other assets were disposed of during the nine months ended September 30, 2002, resulting in a gain of $0.6 million. Proceeds from asset sales have increased the balances in restricted cash and investment securities since year end.

        During the third quarter of 2002, we decided not to renew a purchase option on a portion of the land needed to develop the Las Cruces project. Our management believes that the purchase price of the option is significantly above the market value of the land and that we will be able to acquire the land either through negotiations with the landowner or through expropriation. We wrote off the book value of the purchase option as a loss on disposal of assets of $0.9 million in the third quarter.

        Unconsolidated Affiliate.    In July 2000, we became a limited partner in Peru Exploration Venture LLLP. The general partner is Bear Creek Mining Company. The principal objective of the partnership is to acquire precious and base metal properties in Peru. We account for this investment using the equity method of accounting. Our commitment to the partnership is $1.0 million over a two-year period, which we fully funded as of December 31, 2001. Our share of loss from the partnership for the three and nine month periods ended September 30, 2002 was $0.02 million and $0.3 million, respectively. Our share of loss from the partnership for the three and nine month periods ended September 30, 2001 was $0.2 million and $0.4 million, respectively.

        On May 29, 2002, the partnership entered into a letter agreement with EVEolution Ventures, Inc., a Canadian-based company, pursuant to which EVEolution Ventures agreed to acquire all outstanding limited partnership interests and all outstanding shares of Bear Creek Mining Company in exchange for shares of EVEolution. If this transaction is completed, we will be a minority shareholder of EVEolution.

        Litigation Settlement.    During the nine month period ended September 30, 2001, we recognized a gain on litigation settlement, with Washington Group International, Inc. (formerly known as Morrison Knudsen Corporation), of $0.6 million after deducting related legal expenses.

        Bankruptcy Recovery.    As part of a court approved bankruptcy settlement, unsecured creditors of Washington Group International, Inc. will receive 15% of the common stock of Washington Group. As an unsecured creditor, in the second quarter of 2002, we received an initial distribution of 13,889 shares and warrants to purchase an additional 23,667 shares of Washington Group, with a combined market value of $0.3 million. We recorded this amount as income in the second quarter. In the third

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quarter of 2002, we received an additional distribution of 4,845 shares and warrants to purchase an additional 8,257 shares of Washington Group, with a combined market value of $0.1 million. We recorded this amount, net of related legal expenses, as income in the third quarter. The securities are classified as available for sale and any unrealized gains and losses are reflected as a component of other comprehensive income.

        Income Tax Provision.    Due to past net operating losses, we have recorded a gross deferred tax asset of approximately $18.6 million as of September 30, 2002. We have also recorded a valuation allowance against a substantial portion of this asset, resulting in a net deferred tax asset of $1.6 million. Deferred tax liabilities are partly offset by this deferred tax asset, resulting in a net deferred tax liability of $4.0 million. A portion of the net operating losses was used to offset income generated during the nine months ended September 30, 2002.

Liquidity and Capital Resources

        Our principal sources of funds are our cash and cash equivalents, cash generated from residual gold production at the Castle Mountain Mine and our credit facility. At September 30, 2002, we had cash and cash equivalents of $1.4 million and gold bullion of $0.1 million, representing a decrease in cash and cash equivalents and gold bullion of $0.3 million from December 31, 2001. We expect that our cash and cash equivalents and available borrowings under our credit facility will be sufficient to cover operating expenses through 2003. However, we will need additional funding for development costs at the Las Cruces project, including land acquisition and basic engineering costs. We estimate that the capital cost will be approximately $290 million to bring the Las Cruces project into production.

        Until May 2001, our revenues came from two sources: contract mining at the Castle Mountain Mine and the sale of gold from the mine. Since the completion of mining activities at the Castle Mountain Mine in May 2001, our only source of revenue has been sales of residual gold recovered from the leach pads during the closure and reclamation phase at the mine. Based on our current operations, expected overhead expenses and exploration costs, we will not have significant positive cash flow from operations until production of refined copper begins at the Las Cruces project.

        Net cash provided by operating activities was $1.1 million for the nine months ended September 30, 2002 compared to net cash used of $0.8 million for the same period in 2001. The increase in cash from operations during the first nine months of 2002 compared to the same period in 2001 is due primarily to higher realized gold prices, lower production costs and decreased exploration and general and administrative expenditures. We expect that our cash and cash equivalents, operating cash flows and available borrowings on our credit agreement will be sufficient to cover operating expenses through 2003. However, our cash resources will not be sufficient to cover all projected costs and expenses necessary to commence mining at the Las Cruces project. Basic engineering and land acquisition activities are scheduled to begin at the project once the required permits have been granted. We will require financing in order to proceed with basic engineering and land acquisition activities.

        In March 1998, we entered into a $20 million credit facility with Leucadia National Corporation. Effective March 1, 2000, the credit facility was amended to increase the amount of the facility to $30 million. Effective April 1, 2001, the credit facility was amended to extend the expiration to July 1, 2002. Effective July 1, 2001, the credit facility was amended to increase the amount of the facility to $35 million and to extend the expiration to January 2, 2003. Effective September 30, 2002, the credit facility was amended to increase the amount of the facility to $40 million and to extend the expiration to January 2, 2004. Leucadia may terminate the credit facility on December 15 of any year, provided Leucadia notifies us of the termination prior to September 15 of that year. At September 30, 2002, we had outstanding borrowings under the credit facility of $30.9 million. Loans outstanding under the credit facility bear interest equal to the prime rate and interest and commitment fees are payable quarterly. The prime rate at September 30, 2002 was 4.75%. Interest paid to Leucadia under the credit

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facility for the three and nine month periods ended September 30, 2002 was approximately $0.4 million and $1.1 million, respectively. A substantial portion of these interest payments relates to financing for the Las Cruces project. Interest related to the Las Cruces project is capitalized and is not reflected as interest expense in our consolidated statements of operations. Instead, capitalized interest is added to mining properties, plant and mine development on our consolidated balance sheets.

        We are exploring various financing alternatives for projected costs and expenses associated with the Las Cruces project. In addition, we will need to repay our credit facility. We will not be able to fund the project and repay the credit facility solely from debt financing. We will need to raise a significant amount of the funds from equity investors, which we are considering doing through a subscription rights offering to our existing stockholders. Although we believe that a rights offering is a viable option, we cannot assure you that we will actually commence a rights offering or that, if commenced, such a rights offering will be successful. If we commence a rights offering, we do not expect to do so until the key water permits have been obtained for the Las Cruces project.

        We are also considering other sources of financing, including product off-take agreements, which are a type of product sales agreement, supplier financing and equipment leasing. We plan to secure debt financing for approximately 70% of the project's capital requirements. We expect debt financing to be primarily funded through a syndicated project financing facility using a lead international bank experienced in mining project financing. While we believe that we will be able to obtain financing for the Las Cruces project, we cannot assure you that we will be able to obtain financing on favorable terms or at all. If we are unable to obtain financing when needed, the development of the Las Cruces project could be delayed significantly. Any significant delay could increase the costs of developing the Las Cruces project or prohibit us from completing development of the project.

        Our sources of funds available to fund new mining projects are limited. We used a significant portion of our existing sources of funds to acquire the Las Cruces project for $42 million in September 1999. Accordingly, our ability to begin new mining projects depends on our ability to obtain additional sources of funds to finance these mining projects. While we believe that we may be able to obtain financing for new mining projects through project financing or otherwise, we cannot assure you that we will be able to obtain financing on favorable terms or at all.

        Additions to mining properties, plant and mine development totaled $2.7 million for the nine months ended September 30, 2002, compared to $3.7 million for the same period in 2001. For all periods presented, additions to mining properties, plant and mine development consisted of: (1) mine development expenditures; (2) construction expenditures for buildings, machinery, plant and equipment; (3) expenditures for mobile mining service equipment; and (4) capitalized interest. Development costs incurred at the Las Cruces project, including interest and the costs of a feasibility study, are capitalized and are reflected as investing activities in our consolidated statements of cash flows. The principal source of funds that we used to fund project development at the Las Cruces project was our credit facility with Leucadia.

        Upon completion of production at a mine, we must make expenditures for reclamation and closure of the mine. We provide for future reclamation and mine closure liabilities on a units-of-production basis. At September 30, 2002, we had accrued $1.9 million for these costs, including $1.8 million for the Castle Mountain Mine. In addition to the accruals, we and Viceroy Resource Corporation, the owner of the remaining 75% interest in the Castle Mountain Venture, have deposited cash, including proceeds from the sale of plant and equipment, in a separate fund to cover future reclamation costs at the venture properties. Our contributions to this fund totaled $2.0 million at September 30, 2002. We review the adequacy of our reclamation and mine closure liabilities in light of current laws and regulations and adjust our liabilities as necessary.

        In October 1998, we announced a share repurchase program. Our board of directors authorized the repurchase of up to 2 million shares. As of November 8, 2002, we had repurchased 173,700 shares

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under the repurchase program. We did not repurchase any shares during the nine months ended September 30, 2002.

Cautionary Statement for Forward Looking Information

        Certain information set forth in this report contains "forward-looking statements" within the meaning of federal securities laws. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, exploration efforts, financing needs, plans or intentions relating to acquisitions by us and other information that is not historical information. When used in this report, the words "estimates," "expects," "anticipates," "forecasts," "plans," "intends," "believes" and variations of such words or similar expressions are intended to identify forward-looking statements. Additional forward-looking statements may be made by us from time to time. All such subsequent forward-looking statements, whether written or oral and whether made by or on behalf of us, are also expressly qualified by these cautionary statements.

        Our forward-looking statements are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and are believed by us to have a reasonable basis, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties, but there can be no assurance that management's expectations, beliefs and projections will result or be achieved or accomplished. Our forward-looking statements apply only as of the date made. Except as required by law, we undertake no obligation to publicly update or revise forward-looking statements which may be made to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.

        There are a number of risks and uncertainties that could cause actual results to differ materially from those set forth in, contemplated by or underlying the forward-looking statements contained in this report. These risks include, but are not limited to, dependence on a single mining project, our need for financing, potential delays in development of the Las Cruces project, imprecision of estimates, uncertainty of government subsidies, volatility of copper prices, currency fluctuations, significant indebtedness, risks associated with mining activities, risks of development in foreign countries, environmental and other laws and regulations, competition, reliance upon key executives and having a controlling shareholder. Each of these risks and certain other uncertainties are discussed in more detail in our Annual Report on Form 10-K for the year ended December 31, 2001. There may also be other factors, including those discussed elsewhere in this report, that may cause our actual results to differ materially from the forward-looking statements. Any forward-looking statements made by or on our behalf should be considered in light of these factors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        See note 1 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2001 for additional information regarding forward sales activities and our adoption of Statement of Financial Accounting Standard No. 133, "Accounting for Derivative Instruments and Hedging Activities."

Copper Price Risk

        Our future profitability and long-term viability will depend, in large part, on the market price of copper. Market prices for copper are volatile and are affected by numerous factors beyond our control, including expectations regarding inflation, global and regional demand, speculative activities, political and economic conditions, and production costs in major copper producing regions. The aggregate effect of these factors on copper prices is impossible for us to predict. A decrease in copper prices could

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adversely affect our ability to finance the development of the Las Cruces project, which would have a material adverse affect on our results of operations and financial condition.

        From time to time, we may seek to mitigate the risk of fluctuations in copper prices through periodic forward sales. Forward sales transactions result in a reduction in possible revenue if the contract price is less than the market price at the time of settlement. Additional risks associated with forward sales activities could result if we are unable to meet the delivery requirements of forward sales contracts or to extend delivery dates if necessary. The relative risks and benefits of engaging in forward sales activities depend on prevailing market conditions.

Gold Price Risk

        The results of our operations from residual gold production at the Castle Mountain Mine are affected significantly by the market price of gold. Gold prices are influenced by numerous factors over which we have no control, including expectations with respect to the rate of inflation, the relative strength of the United States dollar and other currencies, interest rates, global or regional political or economic crises, demand for gold for jewelry and industrial products and sales by holders and producers of gold in response to these factors. In the past we have entered into option contracts and forward sales contracts to establish a minimum selling price on some of the ounces of gold that we produce. We do not enter into option or sales contracts for the purpose of speculative trading. Our current policy provides for the use of forward sales contracts for up to 80% of the remaining residual production at the Castle Mountain Mine. However, we expect to sell the remaining production primarily at spot prices at various times. At September 30, 2002, we had no ounces of gold sold under forward sales contracts.

Foreign Currency Exchange Rate Risk

        Portions of our activities are located in Spain and Peru. We also conduct exploration activities in other countries from time to time. Our future profitability could be impacted by fluctuations in foreign currencies relative to the United States dollar. We have not entered into any foreign currency contracts or other derivatives to establish a foreign currency protection program.

Interest Rate Risk

        At September 30, 2002, we had borrowed $30.9 million under our credit facility with Leucadia National Corporation. The credit facility carries a variable interest rate equal to the prime rate. At September 30, 2002, the prime rate was 4.75%. The credit facility will expire on January 2, 2004, unless terminated earlier. Leucadia may terminate the credit facility on December 15 of any year, provided Leucadia notifies us of the termination before September 15 of that year. We have not undertaken any hedging activities with respect to the credit facility.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

        We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. This information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, including our principal executive officer and our principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

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        Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures within 90 days of the filing date of this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in alerting them on a timely basis to material information required to be disclosed in our periodic filings.

Changes in Internal Controls

        There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referenced in the foregoing paragraph.

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PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)

The following exhibits are filed with this report:

(b)

No report on Form 8-K was filed during the quarter for which this report is filed.

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SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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CERTIFICATIONS

I, G. Frank Joklik, Chairman of the Board and Chief Executive Officer, certify that:

        1.    I have reviewed this quarterly report on Form 10-Q of MK Gold Company;

        2.    Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

        3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

        4.    The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

        a)    designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

        b)    evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

        c)    presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

        5.    The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

        a)    all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

        b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

        6.    The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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I, John C. Farmer, Chief Financial Officer and Secretary, certify that:

        1.    I have reviewed this quarterly report on Form 10-Q of MK Gold Company;

        2.    Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

        3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

        4.    The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

        a)    designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

        b)    evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

        c)    presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

        5.    The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

        a)    all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

        b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

        6.    The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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INDEX TO EXHIBITS

Exhibits

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QuickLinks

ITEM 1. FINANCIAL STATEMENTS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 4. CONTROLS AND PROCEDURES

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K