For a stencil, I used chipboard letters (for scrapbooking).
Trace your letter with a dark pen or thin marker (so you can see it).
Next, get your utility knife. I would recommend using a small one like I have shown, it makes it easier to cut the little spaces. Also, be sure you are VERY careful with this step. Don't be overzealous or you might seriously hurt yourself. The cork can be a little tough and difficult to cut through, but take your time and BE CAREFUL!
Once you've cut out your shape, take an exacto knife or a toothpick and poke out where your want your key ring to go. Don't make the hole too close to the edge or your it may split your cork.
Then, get your mod podge and apply a thick layer over your letter.
To save time, I applied the mod podge to both sides, then stuck the toothpick in halfway and propped it up to dry.
Once dry, add another heavy coat to both sides. (You could do 3 or 4 coats if you aren't planning on applying a clear coat).
I then sprayed both sides with a polyurethane spray paint to give it extra durability.
Once it's dry, you can place it on your key ring and you can gift away!
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