Kodiak hitting gold

Vancouver – The Golden Mile project is starting to outgrow its name: Kodiak Exploration (KXL-V) has traced its rich quartz vein gold system near Thunder Bay, Ontario, along eight km strike and to more than a kilometer depth.

The Golden Mile is the main target at Kodiak’s Hercules project, which is part of Ontario’s Beardmore-Geraldton gold belt. The company has been extremely busy in 2008, completing more than 65,000 metres of drilling at Hercules, and has been rewarded for its efforts.

The Golden Mile mineralized quartz vein system has been drill-tested for more than 3 km along strike; it has been traced on surface for 8 km. And now a drill has intersected quartz with sulphide veining, quartz-carbonate stockwork, and sheared gabbro over an 8-metres interval at a downhole depth of 1,027 metres. Assays are pending.

Hole 297 was drilled to test the depth extension of one of the high-grade shoots previously identified in what’s known as Area 51, in the centre of the Golden Mile. Earlier, hole 192 hit that western shoot higher and returned a 0.4-metre intercept grading 75.3 grams gold per tonne and 231 metres depth. Kodiak now plans to wedge off hole 297 to further probe the depth extent of the zone.

Another mineralized shoot in Area 51, the eastern shoot, also carries high gold grades: hole 231 cut 0.4 metres grading 29.5 grams gold from 453 metres depth. And hole 252 returned 15.14 grams gold over 0.7 metres from 361 metres downhole, possibly from a third high-grade zone.

An 8-km strike length for the Golden Mile is also a new achievement for Kodiak. The company added 5 km to the identified strike by finding gold and quartz showings to the west of Area 51 extending right to Kodiak’s property boundary. The company is planning a drill program to test this considerable strike extension.

Kodiak’s team believes that Golden Mile mineralized rock should be amenable to conventional milling and gold-recovery techniques, based on observed mineralogy. The company is now embarking on a series of metallurgical tests to verify that assumption and to move the project forward.

Kodiak has at least six other targets within its 1,400-sq. km land holding in the Beardmore-Geraldton gold belt that have seen drill testing or channel sampling in 2008, with promising results.

At West Geraldton, some 50 km east of Hercules, drilling under a high-grade surface showing known as the Big Bonanza zone. The showing has produced 24 grab samples grading 4.97 grams gold to 118.6 grams gold as well as a 2.3-metre channel grading 12.2 grams gold. Early results from drilling include 5.7 metres grading 5.61 grams gold from 105 metres down hole 6. Big Bonanza is part of the Portage shaer zone, a regional structure that extends for more than 40 km parallel to the Bankfield-Tombill fault zone that hosts eight gold mines.

West Geraldton is also home to the Golden Boomerang zone, which sits 5.5 km east of Big Bonanza and is also on the Portage shear zone. As Golden Boomerang the best drill intercept to date came from hole 18, which cut 12.3 metres grading 0.68 gram gold from 14 metres depth. Additional assays are pending.

Kodiak also conducted reconnaissance exploration and first-pass drilling at Sturgeon Bridge, a discrete project 20 km southeast of Hercules. Drills hit multiple areas of mineralization, including a 0.6-metre intercept grading 66.7 grams gold from 125 metres depth in hole 13.

Over at East Leitch, which sits 33 km southwest of Hercules, drills are probing the Leitch mine system. The system has produced almost 850,000 oz. gold at an average grade of 31.5 grams gold from a mine 2 km distant from the East Leitch property. For Kodiak the area has so far returned 0.8 metres grading 19.3 grams gold from 11 metres down hole 1.

And Kodiak is also drilling at Maki Kidas, another project 20 km southwest of Hercules. The company has identified a zone on the site 1 km long where grab and channel samples grade up to 17 grams gold.

Kodiak management says the company still has some $40 million on hand, leaving it with a strong cash position to continue to explore its large and prospective land-holding through uncertain economic times. The company closed a $54-million financing in late 2007, selling close to 2.5 million flow-through shares at $4.80 a piece and over 11 million non-flow-through shares at $3.80 each.

Of late Kodiak’s share price has hovered near 60. The company has 89 million shares issued. National Bank Financial analysts rate the company as “Outperform” and have maintained a target share price of $4.