Kivalliq Energy Corporation
TSX VENTURE : KIV

Kivalliq Energy Corporation

August 27, 2012 16:53 ET

Kivalliq Energy Corporation: Assays Confirm High Grade Uranium at J4 Zone; Strike Length Extended to 600 Metres

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 27, 2012) - Kivalliq Energy Corporation (TSX VENTURE:KIV) ("Kivalliq") today announced initial 2012 assay results from J4 Zone drilling, and the extension of this zone to 600 metres of strike length. Drilling at Kivalliq's 252,830 acre Angilak Property in Nunavut Territory is now focused on resource delineation drilling at the recently discovered, high grade J4 and Ray discoveries; both located within three kilometres of the Lac Cinquante Deposit. This news release summarizes the 2012 drill program to date, and also includes assay results from drilling within the 10 kilometre long "Lac Cinquante Trend", comprised of the Lac Cinquante Deposit and the Ray, Flare, J2, Southwest, Pulse Zones.

Key Point Summary:

  • Highlight assay results from the first three holes at the J4 Zone include:
    • 1.91% U3O8, 0.55% Mo, 79.8 g/t Ag over 1.1 metres in Hole 12-J4-003
    • 3.76% U3O8, 0.32% Mo, 22.5 g/t Ag over 0.3 metres in Hole 12-J4-003
  • Drilling at the J4 Zone has now intersected significant radiation in 39 of 46 holes, extending the drilled strike length of mineralization to 600 metres
  • Deepest radioactive interval on the Angilak Property to-date intersected at 371 vertical metres at J4 Zone
  • Three diamond drills and a reverse circulation ("RC") rig are now focused on J4 and Ray Zones

"Aggressive drilling since July 1, 2012 at J4 Zone has rapidly outlined a significant zone of continuous uranium mineralization located within 2.3 kilometres of the Lac Cinquante Deposit. This clearly demonstrates the potential to convert targets within the Lac Cinquante Trend into significant discoveries in a single season," stated CEO Jim Paterson.

2012 Angilak Property Exploration Program

Drilling on the 252,830 acre Angilak Property as part of the 2012 exploration program now totals 27,350 metres in 129 diamond drill holes, plus an additional 4,990 metres in 36 exploratory holes using an RC drill rig. Drilling to date has focused on evaluating linear EM conductors occurring within three kilometres of the Lac Cinquante Deposit. Kivalliq is now primarily focussed on resource delineation drilling at the recently discovered J4 and Ray zones.

In addition to exploration and resource development drilling, prospecting, mapping and ground geophysical surveying are ongoing and will continue to advance targets near Lac Cinquante and property wide.

J4 Zone

Significant uranium mineralization or radioactivity has been intersected in 39 of 46 holes drilled from 18 sites along 600 metres of strike length at the J4 Zone. Assay results are presented in the table below. J4 Zone is outlined by an EM conductor located roughly 2.3 kilometres east of the Lac Cinquante Deposit and about 300 metres north of the Ray Zone.

J4 uranium mineralization is hosted by one or two sub-parallel mineralized horizons, 10 to 45 metres apart, referred to as the J4 Upper Zone and the J4 Lower Zone. The J4 has been intersected at depths between 35 and 371 vertical metres. Radioactivity occurs in quartz-carbonate veins hosted by sheared sulphidic, graphitic tuff within a larger sequence of basalt. Radioactive readings between 170 and a peak of 60,200 counts per second ("cps") were measured over drill core lengths between 0.3 to 6.1 metres.

J4 Zone Assay Results

2012 J4 Zone Diamond Drill Hole Weighted Assay Results*
DDH From (m) To (m) Interval (m) True Width (m) U3O8 (%) Cu (%) Mo (%) Ag (g/t) Description
12-J4-001 70.7 71.8 1.1 1.1 0.11 0.18 0.44 51.7 J4 Upper Zone
12-J4-001 92.0 92.3 0.3 NA 0.45 0.02 0.14 10.8 Qtz Carb Vein
12-J4-001 95.6 95.9 0.3 0.3 1.33 0.10 1.22 72.6 J4 Lower Zone
12-J4-001 99.8 100.1 0.3 NA 1.85 0.07 0.07 16.8 Qtz Carb Vein
12-J4-002 73.5 75.2 1.7 1.6 0.23 0.33 0.46 51.2 J4 Upper Zone
12-J4-002 99.5 99.8 0.3 0.3 1.66 0.05 0.15 13.0 J4 Lower Zone
12-J4-002 127.4 127.7 0.3 NA 0.23 0.04 0.05 1.7 Qtz Carb Vein
12-J4-003 87.7 89.1 1.3 1.1 1.91 0.30 0.55 79.8 J4 Upper Zone
12-J4-003 118.8 119.2 0.4 0.3 3.76 0.06 0.32 22.5 J4 Lower Zone
12-J4-003 122.3 124.0 1.7 NA 0.19 0.05 0.03 1.8 Qtz Carb Vein

*All samples are subjected to ICP1 Analysis by Saskatchewan Research Council Geoanalytical Laboratories "SRC" in Saskatoon, Canada. ICP1 results >1,000 ppm U are subjected to SRC U3O8 Assay; ICP1 results for Cu, Mo and Ag are reported by SRC in parts per million (ppm). 1 ppm = 1gm/t, 10,000 ppm = 1%; Intervals include ICP U analysis in ppm converted to U3O8%. Conversion to U3O8% = ppm x 0.01179.

For J4 Zone cross sections with assays and drill plan maps, visit http://www.corebox.net/properties/angilak/.

Lac Cinquante Trend

Assay results from five zones, within the Lac Cinquante Trend and located less than three kilometres from the Lac Cinquante Deposit, are presented in the table below. For descriptions of these zones (Southwest, Pulse, Flare, Ray, J2, in addition to the Lac Cinquante Deposit) please reference Kivalliq news releases from June 25, July 11, and July 25, 2012.

Lac Cinquante Trend Assay Results

All 2012 assay results have now been reported from the Lac Cinquante Deposit and the Southwest, Pulse, Flare, and J2 Zones.

2012 Lac Cinquante Trend Diamond Drill Hole Weighted Assay Results*
DDH From (m) To (m) Interval (m) True Width (m) U3O8 (%) Cu (%) Mo (%) Ag (g/t) Description
12-774-001 74.3 74.7 0.4 0.4 0.51 0.07 0.75 96.0 Ray Zone
12-774-002 84.3 84.6 0.3 NA 0.14 0.02 0.02 0.4 Qtz Carb Vein
12-774-002 87.5 88.5 1.0 0.8 0.21 0.07 0.09 13.7 Ray Zone
12-774-002 101.4 101.9 0.5 NA 0.48 0.02 0.07 2.3 Qtz Carb Vein
12-774-003 113.4 114.0 0.6 0.4 0.20 0.05 0.15 21.9 Ray Zone
12-774-004 100.4 100.7 0.3 NA 0.10 0.02 0.01 0.0 Qtz Carb Vein
12-774-004 144.3 144.9 0.6 0.3 0.01 0.10 0.09 13.1 Ray Zone
12-774-006 29.9 31.0 1.1 NA 0.00 0.03 0.00 100.4 Qtz Carb Vein
12-774-006 77.7 79.4 1.7 1.7 0.22 0.27 0.12 37.5 Ray Zone
12-774-007 92.5 94.4 1.9 1.6 0.35 0.09 0.35 15.3 Ray Zone
12-774-008 116.0 116.7 0.8 NA 0.048 0.007 0.002 0.9 Qtz Carb Vein
12-774-009 57.1 57.5 0.4 NA 0.28 0.022 0.002 0.6 Qtz Carb Vein
12-BZ4-001 84.0 87.9 3.9 3.8 0.02 2.22 0.01 6.5 Flare Zone
12-BZ4-002 103.2 106.2 3.0 2.5 0.00 0.88 0.00 4.3 Flare Zone
12-BZ4-002 127.1 128.5 1.4 NA 0.06 0.31 0.00 1.3 Qtz Carb Vein
12-BZ4-003 104.1 105.4 1.3 1.3 0.00 0.56 0.04 8.0 Flare Zone
12-BZ4-004 114.4 116.0 1.6 1.4 0.00 0.21 0.00 1.8 Flare Zone
12-BZ4-005 55.6 60.2 4.6 3.9 0.09 0.69 0.00 2.2 Flare Zone
12-BZ4-006 83.0 83.8 0.8 0.5 0.01 1.02 0.00 1.9 Flare Zone
12-BZ4-007 72.7 73.5 0.8 0.7 0.00 1.27 0.02 9.1 Flare Zone
12-J2E-001 80.1 83.5 3.4 3.3 0.01 0.27 0.04 7.9 J2E Zone
12-J2E-002 10.0 11.0 1.0 NA 0.53 0.07 0.11 23.7 Qtz Carb Vein
12-J2E-002 101.3 101.8 0.5 0.4 0.02 0.34 0.09 13.2 J2E Zone
12-LC-008 297.9 299.7 1.8 NA 0.52 0.34 0.02 20.9 Qtz Carb Vein
12-LC-013 73.9 76.2 2.3 1.8 0.13 0.92 0.02 12.4 Southwest Zone
12-LC-013 143.3 143.6 0.3 NA 0.84 0.02 0.02 4.4 Qtz Carb Vein
12-LCSW-001 93.7 94.4 0.7 0.4 0.35 0.16 0.03 13.9 Southwest Zone
12-LCSW-002 40.3 41.0 0.7 NA 0.20 0.13 0.03 6.7 Qtz Carb Vein
12-LCSW-002 146.1 149.1 3.0 1.2 0.80 0.45 0.09 32.5 Southwest Zone
12-LCSW-002 153.0 154.0 1.0 NA 0.04 0.01 0.04 7.4 Qtz Carb Vein
12-LCSW-004 82.7 83.7 1.0 0.9 0.12 0.02 0.02 3.9 Southwest Zone
12-LCSW-005 100.8 101.2 0.4 0.3 0.15 0.04 0.00 0.4 Southwest Zone
12-LCSW-006 24.6 25.7 1.1 NA 0.08 0.04 0.04 7.3 Qtz Carb Vein
12-LCSW-006 96.4 97.1 0.7 NA 0.15 0.00 0.03 4.1 Qtz Carb Vein
12-LCSW-007 133.0 137.0 4.0 0.4 0.00 0.14 0.00 1.0 Southwest Zone
12-LCSW-008 23.7 24.1 0.4 NA 0.07 0.19 0.12 15.1 Qtz Carb Vein
12-LCSW-008 91.3 92.3 1.0 1.0 0.16 0.02 0.05 2.8 Southwest Zone
12-LCSW-009 39.6 40.9 1.3 NA 0.01 0.34 0.10 11.5 Qtz Carb Vein
12-LCSW-009 84.7 87.4 2.7 NA 0.08 0.33 0.38 61.9 Qtz Carb Vein
12-LCSW-010 34.2 43.1 8.9 NA 0.00 0.30 0.00 6.9 Qtz Carb Vein
12-LCSW-011 118.2 119.2 0.9 0.6 0.03 0.14 0.00 1.1 Southwest Zone
12-PL-008 89.6 93.6 4.0 2.2 0.02 1.93 0.02 3.7 Pulse Zone
12-PL-010 60.0 60.3 0.3 0.2 0.32 0.29 0.00 4.6 Pulse Zone
12-PL-011 38.6 39.3 0.7 NA 0.62 0.05 0.01 9.3 Qtz Carb Vein
12-PL-011 125.8 126.2 0.4 0.2 0.04 0.49 0.18 45.6 Pulse Zone
12-PL-013 172.8 173.4 0.6 0.3 0.27 0.12 0.06 11.6 Pulse Zone
12-PL-014 64.1 65.1 1.0 0.7 0.39 1.16 0.01 0.6 Pulse Zone
12-PL-015 123.3 124.1 0.8 0.3 0.03 0.20 0.02 8.1 Pulse Zone
12-PL-015 139.6 143.2 3.6 1.4 0.00 0.27 0.01 3.9 Shear Zone
12-PL-016 157.5 158.0 0.5 0.2 0.07 0.02 0.10 13.0 Pulse Zone
12-PL-017 64.2 64.7 0.5 NA 0.01 1.06 0.00 0.0 Qtz Carb Vein
12-PL-018 82.7 83.1 0.4 NA 0.02 0.96 0.00 0.7 Qtz Carb Vein
12-PL-018 125.0 125.5 0.5 0.5 0.01 0.77 0.17 25.2 Pulse Zone
12-PL-019 136.2 136.7 0.5 NA 0.01 0.42 0.08 18.5 Qtz Carb Vein
12-PL-019 153.4 154.7 1.3 1.3 0.02 0.23 0.08 12.6 Pulse Zone
12-PL-020 69.7 70.0 0.3 0.3 0.15 0.14 0.00 1.1 Pulse Zone
12-PL-021 71.2 72.0 0.8 0.7 0.01 0.06 0.03 8.9 Pulse Zone upper
12-PL-021 75.5 81.6 6.1 4.7 0.02 0.43 0.00 0.5 Pulse Zone lower
12-PL-022 106.4 109.9 3.5 2.2 0.15 0.31 0.01 2.3 Pulse Zone
12-PL-023 140.9 141.8 0.9 0.4 0.18 1.19 0.06 3.1 Pulse Zone
12-PL-027 101.3 101.9 0.6 0.4 0.15 0.34 0.00 2.9 Fault Zone
12-PL-027 109.2 110.0 0.8 0.6 0.02 0.21 0.00 6.6 Pulse Zone
12-LCM-002 59.4 65.8 6.5 4.8 0.01 0.43 0.02 7.2 South Zone
12-LCM-002 245.0 246.1 1.1 1.0 0.11 0.03 0.17 8.0 Main Zone
12-LCM-003 192.7 197.0 4.3 NA 0.10 0.02 0.02 2.1 Qtz Carb Vein
12-LCM-003 335.5 335.8 0.3 0.3 0.32 0.03 0.08 0.6 Main Zone
12-LCM-004 114.8 119.0 4.2 NA 0.38 0.04 0.02 74.9 Qtz Carb Vein
12-LCM-004 123.2 124.0 0.8 NA 0.03 0.13 0.27 44.9 Qtz Carb Vein
12-LCM-010 32.7 35.4 2.7 NA 0.06 0.59 0.00 7.8 Qtz Carb Vein
12-LCM-010 125.5 126.1 0.6 NA 0.27 0.01 0.02 3.2 Qtz Carb Vein

*All samples are subjected to ICP1 Analysis by Saskatchewan Research Council Geoanalytical Laboratories "SRC" in Saskatoon, Canada. ICP1 results >1,000 ppm U are subjected to SRC U3O8 Assay; ICP1 results for Cu, Mo and Ag are reported by SRC in parts per million (ppm). 1 ppm = 1gm/t, 10,000 ppm = 1%; Intervals include ICP U analysis in ppm converted to U3O8%. Conversion to U3O8% = ppm x 0.01179.

Ten drill holes; 12-J2E-003, 12-LC-009, 12-LC-012, 12-LCSW-003, 12-PL-009, 12-PL-024, 12-PL-025, 12-PL-026, 12-OHM-001 & 12-OHM-002 intersected no significant mineralization. Drill holes 12-774-005, 12-PL-012, 12-LCM-001 were not completed due to poor drilling conditions.

All holes were drilled to the northeast with azimuths bearing 26 or 35 degrees, at inclinations between minus 45 and 90 degrees. For cross sections with assays and drill plan maps, please visit http://www.corebox.net/properties/angilak/ or www.kivalliqenergy.com/projects/angilak/program_images.

QA/QC

Natural gamma radiation in drill core was measured in cps using a hand-held Radiation Solutions Inc. RS-121 scintillometer or RS-230 spectrometer. Kivalliq cautions that scintillometer readings are not directly related to uranium grade and are only used to indicate zones of radioactive material.

Half-spilt NQ core samples from Angilak Property drill holes, having anomalous radioactivity levels above 200 cps have been sent to Saskatchewan Research Council Geoanalytical Laboratories ("SRC") for analysis. All samples were analyzed for U3O8 and a multi-element suite. The SRC facility operates in accordance with ISO/IEC 17025:2005 (CAN-P-4E), General Requirements for the Competence of Mineral Testing and Calibration laboratories and is accredited by the Standards Council of Canada. The samples are first analyzed by SRC's ICP-OES multi-element Uranium exploration ICP1 method. The method analyzes for multi-elements including Ag, Mo, Cu, Pb, Zn and a suite of rare earth elements. ICP results U>1,000 parts per million (ppm) are analyzed using SRC's ISO/IEC 17025:2005-accredited U3O8 Assay method. Laboratory quality control (QC) includes a repeat analysis on every 20th sample. Repeat samples had good reproducibility. Kivalliq's quality assurance and quality control procedures include the systematic insertion of blanks and standards into the drill core sample string. All QA/QC results were within expectations.

Jeff Ward, P.Geo., and President of Kivalliq, is a Qualified Person as defined under National Instrument 43-101, and has reviewed and approved the scientific and technical information contained in this news release.

About Kivalliq Energy Corporation

Kivalliq Energy Corporation is the first uranium exploration and development company in Canada to sign a comprehensive agreement to explore for uranium on Inuit Owned Lands in Nunavut.

Since acquiring the 252,830 acre Angilak Property in 2008, Kivalliq has invested approximately CDN$40 million conducting systematic exploration, including ground and airborne geophysics, geological mapping, prospecting and approximately 80,000 metres of RC and diamond drilling. This aggressive exploration has resulted in the expansion of the high-grade Lac Cinquante Deposit, along with the discovery of multiple highly-prospective target areas. With a NI 43-101 Inferred Mineral Resource of 1,779,000 tonnes grading 0.69% U3O8, totalling 27.13 million pounds U3O8, (15.2 pounds U3O8/tonne) at a 0.2% U3O8 cut-off grade, the Lac Cinquante Deposit is Canada's highest grade uranium deposit outside of Saskatchewan's Athabasca Basin.

On behalf of the Board of Directors

James R. Paterson, CEO

Kivalliq Energy Corporation

Kivalliq Energy Corporation is a member of the Aurora Resource Group of companies. For further information about Kivalliq Energy Corporation or this news release, please visit our websites at www.kivalliqenergy.com and www.auroraresource.com.

Certain disclosures in this release, including the 2012 Angilak exploration program and future exploration programs, 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 market price of Kivalliq's securities and the market for securities of resource exploration companies in general; commodity prices and, in particular, the price of uranium and the completion of Kivalliq's 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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