Central Golden Mile Long Section – A Description
The Golden Mile long section illustrates the distribution of Kodiak drill holes in the western portion of the Golden Mile vein
system. A long section is a view of the vein as if the vein has been tilted up on edge, allowing the viewer to see the vein from the side.
This vantage point clearly shows where each drill hole has “cut” or intercepted the vein and provides an undistorted view of various
geologic features. In the case of the attached long section, the overall gold abundance, as determined by drill holes, is shown. This
type of section is called a grade-thickness section and is created by multiplying the thickness of a given drill hole intercept times the
gold grade in grams per ton. This number provides a very accurate indication of the strength or abundance of gold mineralization.
For each drill hole, the grade-thickness value is plotted and the data are then contoured, revealing patterns in the distribution of gold
and the overall geometry of the gold mineralization. These patterns seen are very important because high grade gold mineralization
typically has a distinct form or shape within the vein system and by identifying its orientation, a geologist can accurately target the
higher grade portion of the vein system. A geologist typically requires multiple evenly-spaced drill holes in order to accurately model
gold grade distribution. This includes “step-out” drilling adjacent to high grade gold intercepts. The “step-out” drill holes often
outline an envelope of lower grade gold mineralization that forms a halo around the higher grade portion of the gold deposit. These
lower grade envelopes are used by the geologist to define drill targets and aid in the discovery of additional high grade ore shoots.
In the western portion of the Golden Mile vein system, Kodiak has completed 45 drill holes which are defining multiple high
grade ore shoots. The grade-thickness value for each of the drill holes has been contoured using intervals of 3 gram-meters (yellow),
10 gram-meters (green) and 20 gram-meters (red). The lowest contour interval, 3 gram-meters, is actually one of the most important
contour intervals because it outlines the extent of significant gold mineralization and reveals the size and shape of the envelope of
lower grade gold mineralization that typically surrounds the higher grade ore shoots. In the case of the Golden Mile, the western
portion of the vein system is almost continuously mineralized over its entire 850 meter length. A 3 gram-meter envelope of lower
grade gold mineralization is well-developed and forms a very distinct halo around the higher grade gold mineralization shown by the
10 and 20 gram-meter contours (red). The higher grade mineralization has a clear plunge or “rake” towards the lower left corner of
the section (northwesterly). Of particular importance is that the same plunge occurs in lower grade areas, mimicking the high grade
shoots, and potentially outlining new high grade ore shoots with the same pattern of gold distribution seen in the known high grade
areas. Examination of the long section shows that there at least six distinct northwest plunging zones of gold mineralization that
occur in a regular, repeating pattern, in this section of the Golden Mile. All of these plunging gold zones are open at depth and are the
focus of Kodiak’s ongoing drill program. Because ore shoots in this geologic environment can extend 1,000 to 2,000 meters below
the surface, these drill targets provide an excellent opportunity to expand the size of the Golden Mile resource. If this pattern persists

to the southeast from this section into the undrilled portion of the Golden Mile, the potential for multiple high grade ore shoots is
obvious.
The long section shows that 30 of the 45 drill holes in the western portion of the Golden Mile have intercepted gold
mineralization grading greater than 3 gm-meters. This “hit-ratio” of two in three drill holes in the exploratory drilling phase is very
high for an Archean vein system; by comparison advanced drilling in a typical mine environment like Val d’ Or or Red Lake, a hit
ratio of one in ten or one in five is common. At the Golden Mile, even the drill holes with less than a 3 gram-meter intercept are gold
mineralized, indicative of the strength of the system.
The volume of higher grade gold mineralization within the western portion of the Golden Mile is also impressive. Sixteen drill
holes define the area of plus 10 gram-meters, these drill holes have an average gram-meter value of 149 gram-meters; cutting the three
highest grade drill intercepts to 3 opt gold yields an average of 37 gram-meters, a conservative value well over one ounce per ton.
While these values do not constitute a resource grade, they indicate that high grade gold mineralization is widespread and of very high
tenor. This range in gold grades is typical of the very highest grade Archean vein systems.
Gold mineralization persists to the southeast from the long section for more than one kilometer. This portion of the Golden
Mile is undrilled and the potential for multiple high grade ore shoots is excellent. This is indicative of the tremendous tonnage and
ounce potential of the Golden Mile, Yellow Brick Road and many other newly discovered gold bearing veins at Hercules. This system
now contains over 5 km of exposed gold veins and many kilometers of geophysically indicated parallel structures that remain to be
explored, confirming the strong exploration potential of the 30 square kilometer Elmhurst Lake intrusion.