SOURCE: Kivalliq Energy Corporation

Kivalliq Energy Corporation

January 16, 2017 07:00 ET

Kivalliq Announces $3 Million Financing Package; Sandstorm Makes Equity Investment and Payment for Royalty Portfolio

VANCOUVER, BC--(Marketwired - January 16, 2017) -

Not For Distribution To United States Newswire Services Or For Dissemination In The United States

Kivalliq Energy Corporation (TSX VENTURE: KIV) ("Kivalliq") today announced a CDN$3 million financing package, comprised of a non-brokered private placement financing to raise gross proceeds of CDN$2.074 Million, and a CDN$1.0 Million payment from Sandstorm Gold Ltd. ("Sandstorm"), subject to certain conditions, in return for Kivalliq granting to Sandstorm a royalty portfolio on certain Kivalliq projects, principally a 1% net smelter returns ("NSR") royalty payable on all mineral products produced from the Angilak Property uranium project in Nunavut Territory, Canada. Net proceeds will be used to fund exploration and property costs at Kivalliq's projects in Canada, as well as for general corporate purposes.

Kivalliq will receive CDN$2,074,000 by issuing up to an aggregate of 25,925,000 units ("Units"), at the price of CAD$0.08 per Unit (the "Offering"). Each Unit consists of one common share and one-half of one transferrable, common share purchase warrant (a "Warrant"). Each whole Warrant will be exercisable into a common share of Kivalliq (a "Warrant Share") for a period of 60 months from the Closing Date at an exercise price of $0.15 per Warrant Share. Sandstorm Gold Ltd. has subscribed to 16,250,000 Units for a total investment of C$1.3 million in this private placement.

Sandstorm Royalty Package

As part of the total financing package, Kivalliq will receive a CDN$1.0 Million payment from Sandstorm, subject to certain conditions, in return for Kivalliq granting to Sandstorm a royalty portfolio on certain Kivalliq projects, principally a 1% NSR royalty payable on all mineral products produced from the Angilak Property in Nunavut Territory, Canada.

With respect to Kivalliq's Hatchet Lake Property, Kivalliq has transferred and assigned to Sandstorm Kivalliq's buy back right (See Kivalliq news release of February 10, 2015). Upon Sandstorm's exercise of this royalty buy back right, Kivalliq has agreed to grant to Sandstorm a 0.5% NSR royalty payable on all mineral products produced from the Hatchet Lake Property uranium project in Saskatchewan, Canada.

"This financing package puts Kivalliq in a strong position to start 2017, just as interest in our sector seems to be heating up," stated Kivalliq CEO, Jim Paterson. "We welcome the Sandstorm team as new cornerstone investors and financial partners; adding to a shareholder registry that has continued to support us over the lifetime of the Company. We take great pride in knowing that a group with Sandstorm's technical expertise, financial acumen, and excellent reputation in our industry has chosen to support Kivalliq Energy based upon the merits of our team and project portfolio."

The securities issued by Kivalliq in connection with the Offering are subject to a four month "hold period" expiring on May 17, 2017 as prescribed by the Exchange and applicable securities laws. Finders' fees of $124,440 cash and 1,555,550 warrants will be paid in connection with the Financing.

The Offering is being made pursuant to prospectus exemptions in all provinces of Canada and in other jurisdictions as may be determined by Kivalliq. The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Kivalliq Energy Corporation

Kivalliq Energy Corporation (TSX VENTURE: KIV) is a Vancouver-based company with a portfolio of high-quality uranium exploration projects in Canada. Kivalliq holds Canada's highest-grade uranium resource outside of Saskatchewan. The Company's flagship project, the 89,852 hectare Angilak Property in Nunavut Territory, hosts the Lac 50 Trend with a NI 43-101 Inferred Resource of 2,831,000 tonnes grading 0.69% U3O8, totaling 43.3 million pounds U3O8. Kivalliq's comprehensive exploration programs continue to demonstrate the "District Scale" potential of the Angilak Property. For disclosure related to the inferred resource for the Lac 50 Trend uranium deposits, please refer to Kivalliq's news release of March 1, 2013.

In Saskatchewan, Kivalliq holds a 100% interest in the 13,711 hectare Hatchet Lake Property adjacent to the north-eastern margin of the highly prolific uranium-producing Athabasca Basin. Compilation of results from previous exploration by Hathor Exploration Limited and Rio Tinto have identified multiple, priority unconformity-related basement targets at Hatchet Lake that were followed up in 2015.

Kivalliq also holds a 100% interest in the 200,909 hectare Genesis Property located northeast of Saskatchewan's Athabasca Basin, with Roughrider Exploration Limited funding the current exploration program pursuant to an option to acquire up to an 85% interest in the property. This highly prospective project is located along the Wollaston-Mudjatik trend and extends 90 km northeast from Wollaston Lake to the Manitoba border.

Kivalliq's team of northern exploration specialists has forged strong relationships with sophisticated resource sector investors and Angilak Property partner Nunavut Tunngavik Inc. (NTI). Kivalliq was the first company to sign a comprehensive agreement to explore for uranium on Inuit Owned Lands in Nunavut Territory, Canada and is committed to building shareholder value while adhering to high levels of environmental and safety standards and proactive local community engagement.

On behalf of the Board of Directors

"Jim Paterson"

James R. Paterson, CEO

Kivalliq Energy Corporation is a member of the Discovery Group of Companies, for more information please visit www.discoverygroup.ca.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Certain disclosures in this release constitute forward-looking statements that are subject to numerous risks, uncertainties and other factors relating to Kivalliq's operations as a mineral exploration company that may cause future results to differ materially from those expressed or implied in such forward-looking statements, including risks as to the completion of the plans and projects. Readers are cautioned not to place undue reliance on forward-looking statements. Other than as required by applicable securities legislation, Kivalliq expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

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