Kodiak Exploration Limited

Kodiak Exploration Limited

August 09, 2007 18:22 ET

Kodiak Commences Drilling/Increases Land Holdings in Beardmore-Geraldton Gold Belt

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 9, 2007) - Kodiak Exploration Limited (the "Company" or "Kodiak") (TSX VENTURE:KXL) is pleased to announce that it has secured a major land position in the prolific Beardmore-Geraldton greenstone belt in south central Ontario. Following on its discoveries at the Hercules property, Kodiak has entered into two new option agreements and has staked in excess of an additional 15,000 hectares (15 square kilometres) covering areas considered to have significant geologic potential. Kodiak now controls a key land position totaling approximately 300 square kilometres along this historically recognized trend. These activities have been maintained confidential pending completion of the consolidation and this announcement.

The Beardmore-Geraldton mineral belt has produced 4.1 million ounces of gold from several deposits located along its 84 kilometre east-west extent, and is up to 21 kilometres wide. Favourable Archean metasedimentary and metavolcanic formations within the belt have been intruded by younger igneous stocks that are thought to have remobilized metals into favorable greenstone and intrusive hosted shear zones and associated quartz veins. Kodiak's Hercules project, located near the center of the belt, has concentrated on one of these intrusive centers. Kodiak geologists believe this entire area is under explored and contains significant geologic potential for the discovery of additional economic gold, silver, and base metal deposits. Kodiak has initiated an extensive and systematic exploration program of the entire Beardmore-Geraldton belt that will evolve over the next year, and is continuing to pursue potential acquisitions to further increase Kodiak's land position in the belt.

The Cote-Archie Option

Pursuant to an agreement (the "Cote-Archie Agreement") made as of July 18, 2007 with Alto Ventures Ltd. ("Alto"), Kodiak was granted an option to acquire up to a 70% interest in 167 units comprised in 21 mineral claims located approximately 6 kilometres north of the town of Beardmore (the "Cote-Archie Property").

"Kodiak is pleased to join with Alto in the exploration of this highly prospective property, located on strike to areas of previous gold production," commented Brian J. Maher, Kodiak's Vice President of Exploration. "Kodiak believes that the Beardmore-Geraldton gold belt is one of the most under explored greenstone belts in Canada, and we are pursuing an aggressive strategy to ramp up our exploration activities in an area with great potential for new gold discoveries."

Initial exploration by Alto has identified at least two gold occurrences, including an east-northeast trending shear zone, up to 12 metres wide, believed by Alto to represent the on-strike projection of the structure that hosts gold mineralization at the Leitch mine, located approximately 5 kilometres to the west. The zone has been exposed in two trenches, 200 metres apart, with quartz and quartz-carbonate-sulphide veins from which grab samples contain up to 10.2 grams per tonne gold. The original Cote gold showing, located 600 metres to the north, has reported gold mineralization of up to 0.79 ounces per ton (27 grams per tonne) gold. Further trenching by Alto in this vicinity has traced a series of shear-hosted quartz veins that strike in a north-northwest trending direction. Grab samples from veins in these trenches contain gold mineralization up to 17.3 grams per tonne gold. More information about the results of Alto's work can be found on Alto's web site: www.altoventures.com.

Kodiak plans an aggressive exploration program consisting of mapping, sampling, stripping and eventually drilling the most prospective portions of the shear zones identified by Alto. Kodiak will also conduct detailed reconnaissance on the remainder of the property, seeking to locate additional shear-hosted gold mineralization.

Under the Cote-Archie Agreement, Kodiak has the option (the "Initial Option") to acquire, first, an undivided 51% interest in and to and, subject to the exercise of the Initial Option, an additional option (the "Additional Option") to acquire an additional 19% interest in and to the Cote-Archie Property, subject to a 2% net smelter returns royalty (the "Cote-Archie NSR") in favour of the original owners. Kodiak has agreed to pay $25,000 in cash or shares and to incur exploration expenses of at least $200,000 within one year of the "Effective Date" of the Cote-Archie Agreement to acquire the Cote-Archie Option and the Additional Option. The "Effective Date" of the Cote-Archie Agreement is stipulated to be the fifth business day following the day on which Kodiak receives written notice from the TSX Venture Exchange (the "Exchange") of its acceptance of all filings required to be made with the Exchange in respect of the Cote-Archie Agreement.

The Cote-Archie Option may be exercised by Kodiak paying an additional $25,000 to Alto in cash or in shares on each of the first three anniversaries of the "Effective Date" of the Cote-Archie Agreement, incurring exploration expenses of at least $500,000 (including the $200,000 referred to above) not later than the second anniversary of the Effective Date and incurring exploration expenses of at least $1,000,000 (including the $500,000 referred to above) not later than the third anniversary of the Effective Date, for a total of $100,000 in cash or shares and $1,000,000 in exploration expenses.

The Additional Option may be exercised by Kodiak delivering to Alto, within 180 days after the third anniversary of the Effective Date, written notice of Kodiak's intention to fund the completion of a feasibility study in respect of the Property or part thereof, and by funding and completing a Positive Feasibility Study within three years after the third anniversary of the Effective Date.

A joint venture will be formed at the time of exercise of the Option or, if the Additional Option is exercised, at the time of exercise of the Additional Option; provided that Alto will have the right for a period of 90 days to elect to transfer its remaining interest in the Property to Kodiak in exchange for a 2.5% net smelter returns royalty.

If Alto exercises its right to purchase one-half of the Cote-Archie NSR (i.e. 1%), Kodiak will have the option to purchase one-quarter of the Cote-Archie NSR (i.e. 0.5%) by paying $500,000 to Alto.

The Eva Property Option

Pursuant to an agreement (the "Eva Agreement") made as of July 25, 2007 between Kodiak and Ms. Shirley Lafontaine, Kodiak was granted an option (the "Eva Option") to acquire an undivided 100% interest in and to five units comprised in 18 mineral claims in the Beardmore-Geraldton area of Ontario (the "Eva Property"), subject to a 3% net smelter returns royalty (the "Eva NSR") in favour of Ms. Lafontaine. Kodiak agreed to and did pay $10,000 in cash on signing, and may exercise the Eva Option by making the following payments in cash or in shares: $20,000 on the first anniversary of the Eva Agreement, $40,000 on the second anniversary, $60,000 on the third anniversary and $80,000 on the fourth anniversary. Kodiak may purchase one-third (i.e. 1%) of the Eva NSR for $500,000 at any time.

The referenced transactions will be subject to acceptance by the Exchange. Any shares issued in connection with the exercise of the Eva Option will be priced at the time of issue and will be subject to a four month hold period.

Drilling Commences at Hercules

Kodiak has commenced its 2007 diamond drilling program at its Hercules Project. The program, which will total approximately 3000 metres in 30 drill holes, has been planned to test at depth the newly discovered quartz veins and shear zones reported in Kodiak's news release dated July 16, 2007.

Previous drilling in the Wilkinson Lake Gold Zone (WLGZ) intersected significant gold grades within a zone that is 8 metres wide, 200 metres along strike and open at depth. Surface sampling carried out over the past month has revealed significant additional mineralized quartz veining in the area. Drill holes planned for the current program are designed to explore the WLGZ at depth and test 4 newly discovered and previously undrilled veins that have been named Amede, Penelton, 7-9, and Marino.

The recently exposed Amede vein has been sampled and partially mapped for approximately 750 metres along strike, and displays several zones of quartz veining up to 3.5 metres wide for 380 metres of strike length. Similarly the Penelton, 7-9, and Marino veins are 350, 250, and 180 metres in length respectively, with vein widths of 1-3 metres and significant gold values from surface sampling. Wider quartz veins along these exposures typically display higher gold values and represent the current drill targets.

Trenching, detailed geologic mapping and channel sampling will continue into the fall on geologic contacts along the Elmhirst Lake Intrusive and geophysical targets, where additional drill targets are expected. Future drilling will test newly developed targets as assay and geologic information is received.

Located 30 kilometres northeast of Beardmore, Ontario, the Hercules Project is 100% controlled by Kodiak.

Ongoing Work at Caribou Lake

The Company's summer program at Caribou Lake is ongoing and is expected to continue until late August. The drill is currently on Hole #15, which is a new target selected from magnetic flow imaging done during July using new software acquired by the Company. The Company looks forward to reporting on the results of the balance of the Phase 2 drilling program when those results are available.

The geological information contained in this news release has been reviewed and approved by Robert B. Hawkins, Kodiak's Chief Geologist, who is a qualified person for the Cote-Archie and Hercules projects under the definitions established by National Instrument 43-101.

Kodiak is a mineral exploration company with properties located in Canada. Maps, photographs, geological details and additional information may be reviewed on its Web site at www.kodiakexp.com.

This release has been prepared by management - This document contains certain forward looking statements which involve known and unknown risks, delays, and uncertainties not under the Company's control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or expectation implied by these forward looking statements.

TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

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