MANAGEMENT DISCUSSION AND ANALYSIS

(FORM 51 – 102F1)

For the Year Ended December 31, 2008

KODIAK EXPLORATION LIMITED ANNUAL REPORT 2008 9

Properties

Gold Division

Hercules-Golden Mile Property

Kodiak’s Hercules Property is located approximately 120 kilometres northeast of Thunder Bay, in Ontario’s historic Beardmore-Geraldton Gold Camp (4.1 million ounces production to date). The property is road accessible and close to infrastructure. Past producers in the area include the high grade Leitch Mine, 30 kilometres to the southwest, which produced 1 million tons of ore at an average grade of 31.54 grams per tonne (0.92 opt) gold.

At Hercules, high grade gold has been found in multiple veins that cut through the 31 square kilometre Elmhirst Lake Intrusion and adjacent metavolcanic rocks. Surface stripping since 2006 has exposed several massive goldbearing structures consisting of vein and stockwork systems that have a combined strike length of more than 6 kilometres. Individual veins are up to 3 kilometres long and 9 metres wide, enclosed within a envelope of intensely sheared and altered wall rock. The gold-mineralized structures remain open in all directions, and display many of the characteristics of other Archean gold deposits, which together account for two thirds of Canada’s gold production.

The Golden Mile, the principal vein at Kodiak’s Hercules Project, is a large quartz vein system with visible gold and sulphides exposed on surface along a three kilometre strike that remains open. Continuous gold mineralization was initially traced on surface for more than 400 metres, and channel samples taken every 20 metres along this zone had an average grade of 20.2 gpt Au over an average width of 3.8 metres. Systematic resource delineation drilling has so far outlined at least seven parallel high grade zones with a northwest plunge, within an envelope of lower grade gold mineralization.

The high grade zone that forms the central part of the Golden Mile has returned intersections as high as 515.98 gpt Au over 2.5 metres, including 63.67 gpt Au over 0.3 metres in HR08-51, and a high grade zone to the east returned 16.98 gpt Au over 1.3 m, including 63.67 gpt Au over 3 m in hole HR08-171. The continuity of gold mineralization has now been confirmed to a downhole depth of almost 1,000 metres, and the vein remains open below that.

Recent infill drilling continues to intersect high grades and strong gold mineralizaton, including HR09-322 with 0.9 m grading 16.5 gpt Au including 0.4 m grading 31.3 gpt Au, and HR09-328 with 2.4 m grading 11.18 gpt Au including 0.4 m grading 45.4 gpt Au. Drilling at the east end of the Golden Mile has discovered a very large body of weak gold mineralization that is open to depth. All zones remain open to depth.

Recent step-out drilling and trenching have discovered an extension of the Golden Mile 1 km along strike to the northwest, on the other side of a lake recently named the Golden Pond. This zone confirms a 50% increase in the strike length of the Golden Mile since the last report, and the system remains open for another four km to Kodiak's claim boundary. Trenching and mapping is complete. A high grade vein discovered by Sage Gold on trend with the Golden Mile structural zone further to the northwest indicates that the Golden Mile structural zone extends for at least nine km, over nine km of which remain undrilled. These results indicate good exploration potential extending to the northwest towards the Sage discovery along the same structural trend as the Golden Mile zone.

In addition to the Golden Mile, other strong veins, including the parallel Marino, Seven of Nine, Yellow Brick Road and WL veins about 1 km northeast of the Golden Mile, have been uncovered by trenching over a collective strike length of 3 kilometres. These veins also frequently contain visible gold and sulphides. Significant drill intersections include 38.47 gpt Au over a downhole width of 1.6 metres at Marino (HR07-16), 12.85 gpt Au over 1.1 m including 0.3 m grading 53.24 gpt Au at Seven of Nine (HR08-113) and 15.59 gpt Au over a true width of 9.7 metres (including 51.65 gpt Au over 2.83 metres) at WL (HR07-03). Drill hole HR08-145 was successful in extending the high grade WL zone down plunge, where it intersected 3.3 m grading 22.26 gpt Au, including 0.8 m grading 90 gpt Au.

The Lucky Strike vein was discovered 200 m west of the Golden Mile vein during the course of step-back drilling along the central part of the Golden Mile. It was intersected at a depth of 38.5 metres and contains visible gold within a two metre vein width in drill core. Further drilling on this structure has outlined a broad zone of gold mineralization that graded 1.2 gpt Au over 41 metres in hole HR08-137. The Lucky Strike and Golden Mile structures appear to converge at depth, suggesting a potential high grade target where they intersect, and a wedgeshaped region of shallow, bulk-mineable mineralization above.

All of these veins remain open, and other newly discovered veins within the 30 square kilometre Elmhirst Lake intrusion remain to be drill tested. Within the Elmhirst Lake intrusion, which hosts these mineralized veins, 30 kilometres of multiple parallel structures remain largely unexplored. Results to date demonstrate that the intrusion has strong potential to host additional new gold discoveries.

Subsequent events

Between January 1 and December 31 Kodiak drilled 243 holes totaling 67,236 metres on the Hercules property and 112 holes totaling 20,295 metres on other properties in the Beardmore-Geraldton area. Deep drilling at Hercules continues to intersect mineralized quartz veins, which display wide haloes of sericite-chlorite-carbonate alteration, silicification, as well as hematite "soaking" in the footwall and hanging wall to the main structure. These zones of alteration can be up to 35 metres in thickness. Gold continues to be intersected to a downhole depth of 1,000 metres. Drilling by Kodiak has defined at least seven distinct shoots of gold mineralization. These shoots have a regular geometry and periodicity, i.e. higher grade zones appear to occur at regular intervals along strike. This information helps guide further drilling and targeting of high grade gold mineralization.

After a brief hiatus to compile data drilling resumed in February to test for continuity of mineralization within known mineralized zones and to probe for extensions of these zones at depth along the Golden Mile. The Golden Mile structural zone makes a slight turn, or change in strike direction, under the lake and this is believed to be an area with high potential for new gold mineralization. Drilling will also continue to follow the Golden Mile vein to depth as these types of vein systems can extend to over 2,500 metres in depth and Kodiak has only explored the upper 600 metres of the system, thus there is an opportunity to expand the system four-fold at depth.

Trenching in the area of the northwest extension of the Golden Mile has uncovered shear zones up to 6 metres wide, within a broad envelope of strongly mineralized wall rock, with 20 metres of quartz veins and alteration containing sulphides in the most northwesterly drill holes. Ground exploration and geophysical studies show that the Golden Mile structural zone now extends at least an additional five kilometres, more than doubling the potential strike length.

Exploration adjacent to the Golden Mile has also accelerated at Hercules. A new target area between the Golden Mile and the Marino vein system has returned up to 37.1 gpt Au and is being followed up with advanced exploration, trenching and drilling.

Beardmore-Geraldton Land Acquisition and Reconnaissance

In addition to the Hercules project area, Kodiak has established itself as the dominant land holder in this underexplored greenstone belt, located between the prolific Red Lake (19.7 million ounce) and Timmins (65 million ounce) gold camps. Kodiak’s land holdings now cover approximately 2,000 square kilometres of favourable stratigraphy and structure in an area measuring approximately 150 kilometres long and up to 40 kilometres wide.

These properties comprise a mixture of Kodiak 100% owned claims and option agreements, and include the Gold Rush, Golden Boomerang, Kaby Lake, Sturgeon Bridge, East Leitch, and Maki Midas properties.

Magnetic-gradiometer-VLF surveys have been flown over the Hercules property and a large part of Kodiak's regional claim block, and VTEM surveys have been flown over selected blocks, with radiometric surveys to identify alteration patterns. Nine of approximately 30 gold prospects are currently being evaluated, including the seven mentioned above.

Of particular note is Kodiak’s West Geraldton prospect, just west of the town of Geraldton, where a number of historic gold mines produced 3 million ounces of gold. Kodiak has identified multiple untested targets along the 40 kilometre Portage Shear Zone. The Goldstrike and Golden Boomerang zones are 500 m apart, and have each been exposed by stripping over a strike length of 300 metres and remain open. These structures are characterized by quartz veining with arsenopyrite over broad widths where historic grab samples have graded up to 129.5 gpt Au. A historic drill hole on the Goldstrike zone intersected 2.04 metres grading 328 gpt Au, and recent drilling on the Golden Boomerang zone has intersected a very strongly mineralized structure 12 metres wide, including a total of 5.5 metres of quartz-carbonate veins with visible gold, and 20% sulphides that include arsenopyrite, galena, sphalerite, pyrite and chalcopyrite.

To the west of the Golden Boomerang zone, a third zone has recently been discovered. This target area, focused on the Portage shear, has recently been stripped. Channel sampling and mapping of the newly stripped area has defined several excellent high-quality targets that are currently being drilled. Given the strike length of the Portage shear, the width of the mineralized system and the high grades reported in historic drilling and sampling campaigns, the entire West Geraldton area is considered to be a priority target and will be evaluated to test its untapped economic potential. The Gold Rush zone (Kaby Lake) is similar to the Golden Mile. Gold is associated with quartz veins pervasive silicification, potassium metasomatism, and sulphides in broad northwest-striking shear zones up to 150 metres wide that cut granite of the Kaby Lake intrusion, which is the same age as the Elmhirst Lake intrusion that hosts the Golden Mile. Trenching, mapping and sampling show broad shear zones up to 150 metres wide, with strong alteration and quartz veining. Magnetic data show these structures continue for several kilometers.

An initial 6-hole drilling program completed late in 2008 has intersected strongly anomalous gold mineralization up to 50 metres wide associated with shearing and alteration. The proximity to the Golden Mile and the nearly identical geologic setting highlight the tremendous potential of this target area.

Sturgeon Bridge-Caviar is an east-west structure where trenching, mapping and sampling show broad parallel shear zones up to 100 metres wide along a strike length of 1.5 km that remains open along strike and to depth.

Nine drill holes completed during the fall of 2008 have intersected a wide shear zone with strong alteration, felsic intrusives, and gold anomalous gold values as high as 66 gpt. Shearing up to 100 metres wide has been found in drill cores, and blind, strongly mineralized shears and stockwork have been found in deeper drill holes. The broad zones of shearing suggest both low-grade bulk minable drill targets are present as well as higher grade targets associated with sulfide and quartz veining, in a geologic setting similar to the Brookbank deposit located 27kilometres to the west along the same regional shear zone.

At the Maki Midas project, historic drilling intersected 555.43 gpt Au over 1.2 metres, and 26.74 gpt (0.78 opt) Au over 2.81 metres in the best two of 27 gold-mineralized drill holes. Stripping has exposed the Maki structure over a 1,000 metre distance, uncovering a sheared banded iron formation with massive arsenopyrite and quartz veining in sheared metavolcanic rocks over a width 1-6 metres. There has been no modern drilling or exploration on this property due to very poor access, but VTEM and magnetic data indicate the structures continue for tens of kilometres. Regional exploration has traced the structure at Maki over five kilometres underscoring the impressive size of this very large gold-mineralized system. Channel sampling, mapping and with initial wide-spaced drilling has intersected anomalous gold over 1.5 meters of strike in 10 drill holes completed late in 2008.

Subsequent events

Kodiak is continuing to add properties of merit to its land package, these properties are located along more than 300 kilometres of major gold producing breaks or structures that have a striking resemblance to the Cadillac Break in Val d'Or and the Porcupine-Destor Fault Zone, and are entirely controlled by Kodiak. Kodiak geologists believe this underexplored gold belt, which has hosted 14 producing mines in the past, has tremendous untapped potential for the discovery of new economic gold deposits in an Archean terrain that is similar to gold camps such as Timmins, Val d Or, and Noranda.

Knucklethumb Property

The 100% controlled Knucklethumb gold prospect is a separate property located 40 kilometres north of Golden Mile, in the northern part of the same Archean greenstone belt. The property covers 4,176 hectares, has excellent road access, and is located approximately 210 kilometres northeast of Thunder Bay, Ontario.

The Knucklethumb Vent Zone was discovered in 2004, following a regional compilation. It consists of a large area of gold-sulphide mineralization within a zone of intensely silicified and sericitized quartz porphyry and hydrothermal crackle breccia. The alteration zone measures approximately 3 kilometres long by over half a kilometre wide, making it one of the largest known alteration systems in Northwest Ontario. Kodiak’s surface trenching in the Vent area exposed a gold-mineralized area 230 m long and up to 12 metres wide, with an average width of 7 metres.

Surface channel samples have assayed up to 2.20 gpt Au and 12.89 gpt Ag over 6.10 m, including 7.17 gpt Au and 20.90 gpt Ag over 1.70 m.

Shallow diamond drilling on the property in 2005 (33 holes – 4,415 m) and a second phase of deeper drilling (7 holes – 1611 m) in 2006 included 29 holes in the Vent area, where a Titan 24" deep IP-Resistivity-Magnetotelluric survey outlined large areas of moderate to high chargeability, coincident with moderately low resistivity. The IP anomalies coincide with several lenses of disseminated to semi-massive pyrite with strike lengths ranging from 200 to 600 metres, associated with multi-element soil geochemical anomalies. The sulphide lenses are parallel and have a north-south orientation.

Hole KL05-04 intersected widespread gold mineralization averaging 0.19 gpt Au/108.90 m from 25.60-134.5 m down hole, including 0.33 gpt Au/29.05 m from 37.0- 66.05 m, including 0.46 gpt Au/15.33 m from 37.0-52.33 m.

Hole KL06-01 intersected 0.29 gpt Au over 10 m true width, and showed that the gold mineralization extends to a vertical depth of at least 390 m.

The size of this gold-bearing hydrothermal system, a lack of drilling at deeper levels, and the existence of multiple priority targets that remain untested, all suggest that this property has strong potential for a significant new gold discovery.

Energy Division

West Millenium Property

Kodiak has been granted an option by Geomode Minerals Ltd. to acquire the West Millenium property in

Saskatchewan’s Athabasca Basin. This world class sedimentary basin contains the world’s richest high grade uranium deposits and accounts for nearly one third of global uranium supply.

Kodiak's 100% controlled property measures a total of 13 kilometres north-south by 19 kilometres east-west, and consists of 12 mineral claims covering 213.3 square kilometres. It lies within the Key Lake - MacArthur River – Cigar Lake - Midwest Lake structural corridor, one of the most prolific uranium mining districts in the world, and is located on a parallel conductor trend only 3 km west of Cameco's Millenium deposit (56.5 million lb grading 3.81% U3O8).

Giant unconformity-type uranium deposits like Millenium, as well as past-producer Key Lake (183 million lb U3O8 grading 1.98%) 30 kilometres southeast of Kodiak's property, and Cameco's McArthur River mine (367.0 million lb U3O8 grading 20.6%), located 40 km to the north, are generally found at or below the sediment-basement contact and at the intersection of faults with conductive graphitic horizons. Deposits of this type are known to be some of the largest and richest in the world.

Airborne geophysical surveys have confirmed the presence of extensive conductors on Kodiak’s property that replicate the geometry seen at Cameco’s Millenium property located on a similar conductive trend only 3,000 metres to the east. Ground geophysics employed to follow-up these anomalies were instrumental in defining the specific drill targets which would ultimately lead to the Millenium discovery. The Millenium uranium deposit occurs in basement rocks just below the unconformity where highly altered graphitic conductors found within a north-south structure are key indicators of uranium mineralization. Strongly fractured, desilicified and clay-altered sandstone above the deposit led Cameco to identify the target area.

UTEM ground EM surveys conducted in the 1980s outlined four large basement conductive trends extending over 14 kilometres, and an additional 60 line-kilometres of clay-altered resistivity low features identified within the overlying sandstone. Anomalies of this type have been clearly identified at Cameco’s Millenium Deposit.

Kodiak's property remains virtually unexplored, with only one recorded drill hole testing the basement unconformity.

Hole CX-011 was drilled by Cameco in 1988 on the D-1 conductive trend. It intersected a 35 m wide radioactive structural zone characterized by anomolous uranium mineralization within a strong graphite-pyrite conductive unit containing grey clay alteration and abundant slickensides hosted within a highly prospective pelitic unit. This setting strongly resembles lithologic and structural features commonly associated with world class unconformity-type uranium deposits found in the Athabasca Basin. In a 1989 project summary report Cameco recommended further drill testing of the favourable D-1 conductor trend now located on Kodiak’s property.

Kodiak’s winter exploration program consists of 3,000m of drilling in four holes and 33 line kms of moving loop TDEM surveys. Three drill holes have been completed for a total of 2,241m. Hole WM-09-01 tested the D-1 conductor. The unconformity target was intersected at 676m with a total depth of 720m. A five-meter wide strongly altered graphitic pelite occurs from 676m to 681m within a 28m thick highly altered zone from 776m to 704m. Grids ML-1 and ML-2 are surveyed for a total of 18 line kms. Linecutting is underway on grid ML-3 and surveying there will begin shortly. These surveys have been very effective in delineating additional, previously undetected conductive features which Kodiak considers to be priority drill targets.

Kodiak’s West Millenium winter 2009 exploration program of deep EM surveys and drill testing of conductor targets has clearly defined altered and faulted litho-structural graphitic pelitic trends which can be traced for several kilometers across the property. These targets represent high-potential uranium host-rock lithologies. Kodiak is very encouraged by these early stage exploration results.

Otish Uranium Properties

Kodiak holds ten 100% controlled uranium properties (733 claims) covering 42,859 hectares in Québec’s Otish Basin, which is often compared to the Athabasca Basin in terms of its uranium potential, according to the Ministry of Natural Resources and Wildlife. Like the Athabasca Basin, the Otish Basin hosts many uranium showings above, at, or below the unconformity separating basinal sediments from the Archean basement rocks.

Kodiak’s properties cover a wide range of geological settings, target types, showings, and geochemical anomalies, on ground formerly held by Uranerz, within and near the margins of the Otish and the adjacent Paskwati basins.

Kodiak's summer field program in 2008 resulted in the discovery of outcropping uranium on its the UR East and 308 West properties. In addition, two new high-grade mineralized boulders and two anomalous radioactive outcrops were found on the UR property.

On the UR East property (10,922 hectares), the newly discovered Big Bang outcrop returned multiple readings of 66,000 counts per second (equivalent to more than 10,000 ppm U or 1.18% U3O8) from a uranium-rich shear zone at least three metres wide that occurs near a major structural intersection. These readings of 66,000 cps are the maximum levels detectable by the RS-125 spectrometer used for the program. The RS-125 spectrometer is selfcalibrating, and adjusts automatically to changing levels of background radiation. A grab sample taken from this zone assayed 8,130 ppm U (0.96% U3O8).

The Big Bang outcrop is located on a northeast-trending magnetic lineament 10 km long that is open in both directions and has been identified as a gabbro dyke similar to those associated with Strateco's Matoush uranium deposit (16.8 million pounds of U3O8), where drill intersections have assayed as high as 2.13% U3O8 over 15.2 metres. The outcrop consists of sheared, biotite and chlorite-altered amphibolite, most likely metagabbro, and is cut by felsic veins. The whole outcrop is uranium mineralized, and the surface is stained with yellow uranophane over its entire width. The mineralization was traced for a further 15 metres in hand pits, and another radioactive outcrop was found 1,100 metres along strike to the east-northeast of the initial discovery site, demonstrating impressive potential for a large, well mineralized system.

A total of six radioactive outcrops were identified within a 1 km radius of the discovery area, and more more than 15 priority targets were identified for follow-up. Analysis of geophysical and field data is ongoing, and more than 90 km of major magnetic structures and numerous radiometric lineaments remain to be investigated on the property. Wet chemical analysis is pending, and drilling is planned to test the economic potential of this significant new discovery.

The Big Bang discovery is located at the base of the outcrop in an erosional outlier of sandstone east of the Otish Basin. The discovery of the Big Bang mineralization confirms that this is an excellent environment for the discovery of shallow, unconformity-style uranium deposits.

The second discovery, Kodiak's Big Yellow outcrop, is located on the 100% controlled 308 West property (1,872 hectares), at the north end of the Pakwaskasati Basin, a large outlier south of the Otish Basin. The Big Yellow is a radioactive 30 x 30 metre outcrop of flat-lying rusty conglomeratic sandstone that gave scintillometer readings up to 10,000 cps. This outcrop is located close to the intersection of two magnetic structures striking NE and NNW, measuring about 7 and 8.5 km long respectively. A NE-trending gabbro dyke was found near the discovery outcrop, confirming the magnetic interpretation, and indicating a geologic setting very similar to Matoush. The Big Yellow discovery lies on the same NNW structure as the historic Yvon showing, a thin pitchblende-pyrite vein 15 m long that was discovered by Uranerz 1.5 km south of Big Yellow. Over 90 km of prospective magnetic structures remain to be explored on this property.

Kodiak's UR prospect covers 17,382 acres (7,034 hectares) on the northeast rim of the Otish Basin, including a 3 kilometre x 2 kilometre area with more than 100 radioactive boulders discovered by Uranerz. The boulders consist of angular hematized granite, suggesting a local bedrock source. An 11,000 line kilometre airborne magnetic, radiometric and VLF-EM survey flown last fall identified a large, highly radioactive anomaly up to 3500 cps, that coincides with the area of mineralized boulders. VLF conductors at the apex of the anomaly indicate a potential mineralized structure with a similar exploration setting to Matoush, and anomalous uranium was found in two outcrops along this structure by the 2008 prospecting team, who also discovered two new high-grade radioactive boulders at the south end of the boulder train.

Kodiak’s Mat I, II and III claim blocks (2,230 acres/902 hectares) are in the western part of the Otish Basin.

Kodiak’s Mat I claim block lies on the western rim of the basin, adjoining the northern edge of Strateco’s claims in an area that appears most prospective for shallow unconformity-style uranium mineralization. The Mat II block is located between Strateco’s ground and Cameco’s claims to the south. The Mat III block is located to the west of Strateco’s Matoush discovery. The Mat II and Mat III claims are prospective for both perched and unconformity style uranium mineralization. Kodiak’s RIM 1 through RIM 3 properties (37,010 acres/14,978 hectares) are located along the east rim of the Otish Basin, where the highest concentrations of uranium showings and anomalies are found. Many of these showings and anomalies are located along or near faults that cross-cut the basinal sediments, making these properties highly prospective for unconformity and perched-style uranium mineralization.

The RIM 1 prospect is crosscut by two north-northeast trending faults, as well as the projected westward extension of the Kerveso Fault. Several radioactive sandstone boulders up to 11,000 cps have been documented on this property, along with gabbro outcrops that are believed to be contemporaneous with the uranium mineralization.

The RIM 2 prospect covers a possible source area for a 500-metre train of radioactive boulders containing up to 0.153% U3O8, located on the adjoining Golden Valley Mines property.

The RIM 3 prospect covers an elongated 24 kilometre lake sediment anomaly, and includes four lakes along the surface trace of the Kerveso Fault, sediments from which returned values between 20 and 50 ppm U. For radioactive boulders containing up to 134 ppm U have been documented within the area of the lake sediment anomaly.

The 308 East claim block covers 2,513 (1070 hectares), and like the 308 West property, lies at the north end of the Paskwasati Basin. It includes a cluster of historic uranium geochemical anomalies and mineralized boulders that follow the northern extension of a north-south gabbro dyke similar to the one associated with the uranium-bearing Matoush structure. The root zone of an unconformity deposit at the west contact of the gabbro dyke could be a possible source for these anomalies.

Like the 308 West property, the 308 East property straddles the unconformity, and has potential for deep

unconformity deposits, as well as classic unconformity-style uranium mineralization both below and above the unconformity surface. A historic hole drilled by Phelps Dodge 5.3 kilometres south of Kodiak's 308 East block intersected 1.8 metres grading 0.15% U3O8 in metasedimentary rocks immediately overlying the unconformity.

Kodiak's 2008 field program is planned to be followed up by a drill program to test the economic potential of the new Big Bang and Big Yellow discoveries.

Base Metals Division

Caribou Lake Property

Kodiak’s 83,459 acre Caribou Lake Ni-Cu-Co-PGE property is located on the north shore 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 34 of 50 shallow drill holes (totalling 7,345 m) that 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 within a 5.40 m interval grading 0.36% Ni and 0.50% Cu.

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.

Pentlandite granules found in samples from the marginal, middle and lower parts of the intrusion are considered to be evidence of a nickel-rich system, and demonstrate 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 and magnesium content of olivine increases downward in the intrusion. 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 in 2007, Kodiak completed 15 deeper drill holes totalling 8786.88 m. These holes ranged from 188 to 966 metres in length. Seven of the holes intersected fine to coarse grained interstitial sulphides, including an intersection of 0.31% Cu and 0.22% Ni over 1.11 metres in hole CL-07-05, and 587 metres of 1-10% sulphide 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 like that intersected in the Phase I and II drill holes frequently form lateral extensions or haloes around massive sulphide bodies.

These results are evidence that a large nickel and copper bearing sulphide system is present in the Caribou Lake intrusive 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.

Sleeping Giant Property

Sleeping Giant is a significant new zone of nickel-copper mineralization on Kodiak’s 100% controlled claims in the Beardmore-Geraldton Gold Camp. It has direct all weather road access and is close to infrastructure. Drill hole HR07-01 intersected 27.1 metres grading 0.49% Ni and 0.0.24% Cu (50.2-77.3 m), including 5.3 metres grading 1.51% Ni and 0.44% Cu. These intersections include encouraging precious metal mineralization of 0.5 m grading 1.40 g/t Au, 0.85 g/t Pt and 0.17 g/t Pd, and 1.2 m grading 0.15 g/t Pt and 0.10 g/t Pd. The significant width and grade of mineralization at the Sleeping Giant, combined with large geophysical anomalies, suggest it is part of a much larger base metal system.

The Sleeping Giant zone extends for at least 200 metres along strike and is open in all directions. The mineralized zone is associated with a series of geophysical anomalies that extend for a strike length of at least three kilometres, indicating the system is much more extensive. Mineralization occurs in a gabbroic komatiite body that hosts disseminated, semi-massive and massive sulphides consisting of pyrrhotite, chalcopyrite, and pyrite, with possible chromite.

Sleeping Giant was discovered as the result of a surface exploration program consisting of ground geophysics, compilation of data from previous shallow drilling, and follow-up reconnaissance drilling. This Ni-Cu zone remains open along strike and to depth. Kodiak has now completed 60 km of ground UTEM and 63 km of magnetic surveys to outline the full extent of conductors that could indicate sulphide targets, in preparation for additional drilling.

Nighthawk Nickel property

Kodiak’s Nighthawk claims near Timmins, Ontario, were staked in May, 2007, after Golden Chalice Resources announced the discovery of a significant new nickel discovery (1.14% Ni over 72.5 metres). Kodiak’s claims cover an area of more than 17,544 acres (7100 hectares) adjacent to Golden Chalice’s ground, and are located approximately 20 kilometres south-southeast of the Kidd Creek Metallurgical Complex, which recently added a circuit to process nickel sulphide.

Kodiak is currently compiling drilling records, district files and additional geological and geophysical data in order to prioritize areas for detailed evaluation, and is planning to follow up with a ground program to assess the potential of these claims. Kodiak continues to investigate this and other nickel opportunities, as part of a recently initiated strategic growth plan recently initiated by the Company.

Roy property

The Roy claims were staked in November, 2006 as part of Kodiak’s ongoing acquisition program, but are not currently considered a material or principal property of the Company. The claims cover a porphyry copper-gold target in the Chibougamau district of Quebec. Between 1954 and 1995, this district produced 47.8 million tonnes at an average grade of 1.82% Cu and 2.2 g/t Au.

The Roy claims are located directly between past producers Grandroy to the east (8.7 million pounds Cu and 7,600 ounces Au produced from 1967-1969 and 1974-75), and Bruneau (1.9 million pounds Cu and 123 ounces Au produced in 1965-1966) to the west. The Portage mine (203 million pounds Cu and 643,000 ounces Au produced from 1960 to 1994) is located 3 kilometres southeast of the Roy property, and the Copper Rand mine (535 million pounds Cu and 1.3 million ounces Au produced from 1959 to 1994) is located 5 kilometres to the west.

Although poorly exposed at surface, drilling and geophysical surveys have shown that part of the Chibougamau pluton, which hosted the Grandroy ore body, extends onto the southeast part of the Roy claims, where it is cut by northeast and east-trending shear zones. The tonalite is altered and mineralized along these shear zones, and is associated with a well defined IP chargeability anomaly extending southwest from the Grandroy property.

The Roy property was first explored by Grandines Mines in the early 1950s, at the time of the initial Chibougamau staking rush. In 1952, Grandines explored the Machin Bay area, in the southeast part of the Roy claim block, as part of its work on the adjacent Grandroy property. Several holes were reported to have intersected significant shearing, alteration and chalcopyrite mineralization in felsic volcanic and intrusive rocks. The best reported intersection was 1.2% Cu and 2.8 g/t Au over 4.8 metres, and another hole, drilled 60 metres south of the present claim boundary, intersected 1.19% Cu over 5.0 metres. A surface showing in this area was stripped and sampled by Ran-Lux Mines in 1966. The best grab sample assayed 21% Cu and 2.0 g/t Au, and another surface grab sample is reported to have contained 7.8 g/t Au.

Previous shallow drilling is thought to have been inadequate to fully evaluate the potential for a classic Porphyry style deposit in the southeast part of the Roy claim block, and Kodiak’s consultants have recommended a program of deeper drilling in the Machin Bay area to test the system at depth.

The northwest corner of the property lies only a few hundred metres from the Bruneau mine portal, where pyritepyrrhotite-chalcopyrite mineralization is contained in a network of quartz-carbonate veins. These mineralized veins are controlled by north-trending shears in the same silicified and propylitically altered mafic volcanic that underlie much of the Roy claim group. It is concluded that the Roy claims have the potential to host both Grandroy and Bruneau-type mineralization.

The qualified person for the Company's projects, under the definitions established by National Instrument 43-101, is Trevor Bremner, P.Geo., who has reviewed and approved the contents of this report.