Kodiak down 23% on Caribou Lake results

Vancouver — Despite hitting additional intervals of nickel and copper sulphides, recent drill results from Kodiak Exploration’s (KXL-V, KXLAF-O) Caribou Lake layered ultramafic intrusive project near Yellowknife, N.W.T., returned grades that fell below investor expectations, pushing the company’s stock price down by 23%.

Drilling is targeting structural depressions along the base of the intrusive body with two holes collared almost 1 km apart in the northern part of the intrusion, both intersecting magmatic sulphides.

Hole CL-07-05, drilled more than 600 metres deep, intersected a number of sulphide-mineralized bands. The highest-grade intersection was at 479.6 metres depth, returning 1.1 metres of 0.21% nickel and 0.31% copper. Other bands graded 0.06-0.12% nickel and 0.1-0.14% copper. The second hole, CL-07-06, intersected 0.1% nickel and 0.15% copper over 5 metres from 392 metres down-hole.

Mineralization occurs as both coarse and fine-grained magmatic sulphides within the layered ultramafics that the company notes as have a tholeiitic composition similar to the Duluth Intrusive Complex in Minnesota. Better grades are hosted in coarse- to very coarse-grained gabbro and pyroxenite units.

Kodiak had been pushing initial exploration results that indicated the presence of several massive sulphide bodies at Caribou Lake, which is located immediately north of Great Slave Lake. In September 2005, Kodiak announced that grab sample assays combined with aeromagnetic data and geological observations indicated a gabbro layer containing massive and net-textured magmatic sulphides containing up to 1.41% copper, 0.62% nickel, and anomalous levels of platinum, palladium, gold and cobalt.

A VTEM survey conducted a few months later also indicated the presence of massive sulphide bodies with a collective strike length of 3.3 km. Last spring, assay results from the first diamond holes returned 0.5% copper, 0.36% nickel and 0.05% cobalt over 5.4 metres including 1.41 metres of 1.11% copper, 0.9% nickel and 0.12% cobalt.

The company’s share price had been on the rise in expectation of strong nickel and copper grades at Caribou Lake, having climbed to over $1.00 by March 2007 from 40 in mid-2006. The share price fell 20 on the first drill results in late March. At presstime, the second set of drill results had created the same effect, with Kodiak’s share price slipping 18 to 61.

Besides its Caribou Lake property, Kodiak holds two gold prospects — the Hercules and Knucklethumb properties — northeast of Thunder Bay, in Ontario, as well as 10 uranium properties in the Otish basin area of Quebec.