Caribou Lake Cu-Ni-Co-PGE Property

Phase II Drilling Continues  - Focused on Discovery

Kodiak’s 83,459 acre Caribou Lake Ni-Cu-Co-PGE property is located immediately north of Great Slave Lake, 90 kilometres southeast of Yellowknife. The property is 100% controlled, and has direct deep water access to the Mackenzie Highway and the transcontinental railhead at Hay River. The nearest nickel smelter is Sherritt International Corporation’s Metals Refinery, 1100 kilometres to the south at Fort Saskatchewan, Alberta

At Caribou Lake, nickel, copper and cobalt sulphides occur in a layered mafic intrusion with an overall gabbroic composition similar to Noril’sk and Duluth. In 2006, significant amounts of nickel, copper and cobalt sulphides were found in thirty-four of fifty shallow drill holes which tested the intrusion along a strike length of nine kilometres. Results from the shallow drilling included long intersections of disseminated and net-textured sulphides (53.5 m grading 0.12% Ni and 0.16% Cu in hole CL-06-16) and several holes intersected semi-massive and massive sulphide, including hole CL-06-01 which intersected 0.78 m grading 1.02% Ni, 1.38% Cu. Highlights of the Phase I drilling are summarized in the table below.

Please click here for results from Kodiak’s Phase I drill program at Caribou Lake.

Petrographic and field studies by nickel specialist Dr. Walter Peredery, P. Geo., show that the Caribou Lake intrusion consists of an Upper Series of rocks dominated by anorthositic gabbro, an iron-rich, mafic-ultramafic Middle Series, and a Lower Series consisting of magnesium-rich ultramafic layer of peridotite and olivine pyroxenite. These layered series rocks appear to have been injected in several pulses. Middle Series rocks show clear rhythmic layering in several drill holes on a scale of about 20 metres, and host the largest concentrations of nickel discovered to date. Lower Series rocks are poorly exposed on surface, but their distribution roughly coincides with a 6 x 4 kilometre gravity anomaly mapped by the Geological Survey of Canada, centered immediately east of Caribou Lake. All of the rocks are magnetic, and are easily distinguished from non-magnetic greywacke, amygdaloidal basalt and granite that form the footwall of the Caribou Lake intrusion.

Granules of pentlandite, an important nickel mineral, have been positively identified by Dr. Peredery in samples from the marginal, middle and lower parts of the intrusion. This is considered to be evidence of a nickel-rich system, and demonstrates that the Caribou Lake intrusion has excellent potential to contain economic concentrations of nickel, copper, and cobalt at depth.

Microprobe analyses have shown that olivine grains from the marginal gabbro, and from magnetite peridotite and pyroxenite of the Middle Layered Series, are strongly depleted in nickel. These results indicate that the system of nickel extraction from olivine into sulphides at Caribou Lake has been very efficient, and compares favourably with nickel depletion seen in olivines from Noril’sk and Voisey’s Bay. The pentlandite grains mentioned above confirm that extraction of nickel into the sulphide fraction has taken place

Microprobe analyses also show that the nickel content of olivine increases downward in the intrusion, as does the magnesium content. Platinum group elements also increase downward. The highest concentrations of magnesium-rich olivine, nickel and PGE are expected to occur at the base of the intrusion, where significant concentrations of sulphides are considered likely to have pooled in structurally low areas due to gravitational settling.

Assays of disseminated and net-textured mineralization normalized to 100% sulphide allow comparison of sulphides between layers within an intrusion, as well as between deposits. A sample of disseminated mineralization from the Lower Series rocks at Caribou Lake, recalculated in terms of massive sulphide, returned normalized values of 3.5% Cu, 5.6% Ni, 0.9% Co, 2.5 g/t Pt and 3.5 g/t Pd. These values are comparable to massive sulphides from nickel deposits worldwide, and also indicate a relatively high PGE content, comparable to that at Noril’sk.

During its Phase II drill program, which commenced in January, 2007, Kodiak completed 15 holes ranging in length from 188 to 966 metres. This drill program did not intersect high grade Ni-Cu mineralization, but drill holes CL-07-01, CL-07-02, CL-07-03, CL-07-04, CL-07-05, CL-07-06 and CL-07-14 intersected significant fine to coarse grained interstitial mineralization, including an intersection of 0.31% Cu and 0.22% Ni over 1.11 metres in hole CL-06-05, and 587 metres with 1 to 10% sulphides containing anomalous levels of Ni and Cu in Hole CL-07-03. Even though these drill holes did not encounter economic quantities of nickel, clouds of disseminated mineralization similar to those intersected in the Phase I and Phase II drill holes frequently form lateral extensions or haloes around massive sulphide bodies. These results continue to demonstrate that a large Ni and Cu bearing sulfide system is present in the Caribou Lake mafic complex, which has the potential to host a significant Ni and Cu ore body. Geologic and drill hole data are being compiled and interpreted in preparation for the next phase of exploration at Caribou.

The information contained on this page has been reviewed and approved by Trevor Bremner, P. Geo., who is the qualified person for the Caribou Lake project under the definitions established by National Instrument 43-101. Mr. Bremner is an independent consultant to Kodiak.

Drill Hole CL-06-39: 69.71 metre intersection grading 0.21% Ni/Cu	Drill Hole CL-06-16: 53.5 metre intersection grading 0.28% Ni/Cu
Drill Hole CL-06-12: 19.0 metre intersection grading 0.26% Ni/Cu	Drill Hole CL-06-40: 8.15 metre intersection grading 0.38% Ni/Cu

Drillhole CL-06-16, 10 m intersection of net-textured sulphides containing pyrrhotite and chalcopyrite within a 53.5 m intersection of disseminated sulphide mineralization grading 0.277% Ni & Cu combined, including a 6.6 m intersection grading 0.38% Ni, 0.56% Cu and 0.047% Co.  This mineralization was intersected in the shallow upper part of the intrusion, indicating that the Caribou Lake intrusion was saturated with nickel, copper and cobalt when it formed.

Hole CL-06-01   MASSIVE SULPHIDE MINERALIZATION WITH VISIBLE PYRRHOTITE AND CHALCOPYRITE FROM STRONGLY DISSEMINATED TO MASSIVE SULPHIDE MINERALIZATION OVER 3.25 METRES. 1) 1.375% Cu, 1.02% Ni and 0.13% Co over 0.78 metres From 24 to 24.78 metres downhole 2) 1.11% Cu, 0.9% Ni and 0.12% Co over 1.41 metres From 23.37-24.78 metres downhole 3) 0.7% Cu, 0.53% Ni and 0.07% Co over 3.18 metres From 21.6-24.78 metres downhole Hole CL-06-03 Third hole picture from Caribou Lake Winter Drill Program CLICK TO ENLARGE Drill hole CL-06-03, drilled directly below CL-01-01 from the same location, intersected 1.40 m of massive pyrrhotite and chalcopyrite (above). This massive sulphide section extended from 35.2 to 36.6 m downhole and assayed 0.925% Ni, 1.0% Cu and 0.12% Co. An additional 4.65 metres of net-textured sulphide between 26.85 and 31.50 metres downhole assayed 0.18% Ni, 0.20% Cu and 0.029% Co. Hole CL-06-05  CLICK TO ENLARGE Drillhole CL-06-05 also tested Anomaly 1. It cut 1.20 metres of massive sulphide containing 1.123% Ni, 1.083% Cu and 0.125% Co over 1.20 metres from 80.7 to 81.9 metres downhole, within an 8.40 metre intersection grading 0.27% Ni, 0.34% Cu and 0.125% Co between 75.0 and 83.4 metres. Hole CL-06-16   Massive sulphides containing pyrrhotite and chalcopyrite in hole CL-06-16