The BarkerLetter

December 5, 2007

I promised readers some background on Kodiak Exploration (KXL.TSX-V) which is currently drilling some intriguing holes over in Ontario’s Geraldton Gold Camp.

Off the hop I’d say I like the company’s wholly -owned portfolio or properties. They have 226,000 acres in Canada including Caribou Lake (copper, nickel, cobalt PGMs) in the north and the 36,684 acre Hercules properties, which host the Golden Mile workings.  They’ve discovered a new shear zone over there, where stripping has revealed gold in quartz veins. 

Others:

• uranium mineral claims over 105,906 acres in the Otish Basin area of Quebec.
• 17,544 acre Nighthawk Nickel property adjoining Golden Chalice Resources  (which hit 1.14 % Ni over 72.5 m) near Timmins, Ontario.

So they’re well set up.

Kodiak has a market capitalization of almost $300 million Cdn, rather high for a junior explorer without an economically viable (as of this date) mineral project. The stock price is up 387% over the past 12 months, and currently trades around $4 Cdn per share.

What gets discovered gets overvalued, that’s for certain. As a company’s market cap expands, the demands and/or  expectations by shareholders increases exponentially. Of course a hundred percentile increase in the stock price is meaningless if Kodiak has another Hemlo gold in the making, since such a discovery would result in a multi-thousand-fold increase in the company’s value. However, the odds of that happening are extremely remote.

Does Kodiak have a reasonably good chance of having another Hemlo at it’s Golden Mile project? Good question. Tune in tomorrow and I’ll endeavour to answer it.

Careful out there.

Kb