Kivalliq Energy Corporation
TSX VENTURE : KIV

Kivalliq Energy Corporation

August 17, 2011 08:00 ET

Kivalliq Energy Corporation: Discoveries Continue Along Lac Cinquante Trend; Mineralization Confirmed Over 2.3 km

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 17, 2011) - Kivalliq Energy Corporation (TSX VENTURE:KIV) (the "Company" or "Kivalliq") today provided an update on diamond drilling near the high grade Lac Cinquante Uranium Deposit, located within the Angilak Property in Nunavut, Canada. Recent drilling successfully discovered a mineralized zone, the "Western Extension", located to the west and along strike from the 1.35 kilometre long Lac Cinquante deposit. In addition, two diamond drills are now delineating a new zone, the "Eastern Extension", discovered 450 metres east of the inferred resource area. Highly radioactive readings from diamond drilling along the Lac Cinquante structure have now extended the known strike extent of uranium mineralization to at least 2.3 kilometres.

  • Western Extension strike length extended to 550 metres; zone remains open to depth

  • Two diamond drill rigs currently testing newly discovered Eastern Extension

  • Assays are pending from Lac Cinquante, Western Extension and Eastern Extension zones

"The discovery of both the Western and Eastern Extension zones underscores the growing significance of the Lac Cinquante structural trend," stated CEO Jim Paterson. "We are also very pleased that recent targeting by the RC rig led to the discovery of the Eastern Extension zone, demonstrating that a combined RC and diamond drilling program is highly effective when exploring the Angilak Property."

2011 Angilak Property Exploration Program

The ongoing 2011 drill program at Angilak now totals 15,820 metres in 106 diamond drill holes and an additional 4,775 metres in 65 exploratory holes using the reverse circulation (RC) drill rig. Diamond drilling to date has largely focused on resource expansion east and west of the high grade Lac Cinquante deposit and exploratory drilling at the Blaze Zone. The Kivalliq team considers both the Western Extension and Eastern Extension zones to be part of the same northwest–southeast trending geological structure which hosts the high grade Lac Cinquante uranium resource.

Airborne and ground geophysical crews, as well as a prospecting crew, are currently working on the project to advance target areas defined by the 2010 program and generate new targets across the Angilak Property.

For maps and drill plan images, please visit www.kivalliqenergy.com.

Western Extension

Drilling at the Western Extension targeted a northwest trending VLF EM conductor which exhibited a response similar to that of the Lac Cinquante deposit. 6,705 metres in 45 diamond drill holes have now tested this zone, along 15 fences spaced at 50 metres and to depths of up to 250 metres. Recent drilling has significantly increased the known strike of the Western Extension to 550 metres, so that it now encompasses anomalous hole 10 LC-013 drilled last year (See June 24, 2010 news release). Based on recent drilling, the zone of radioactivity that makes up the Western Extension now starts 450 metres to the west and along strike of the Lac Cinquante main zone.

Mineralization is similar to that found at Lac Cinquante, but is structurally hosted in altered basalt rather than a tuffaceous unit. Radioactive intervals are associated with sheared, chlorite-carbonate altered basalt with minor brecciation and sulphides. Hematized quartz-carbonate veining is common in this zone.

All holes were drilled to the northeast with azimuths bearing 26 degrees, at inclinations between minus 45 and 90 degrees. This work has identified a highly radioactive shear zone between 0.3 and 2.7 metres estimated true width, and dipping roughly 65 degrees to the southwest. 37 of 46 holes have intersected anomalous radioactivity between 30 and 250 metres vertical depth. Radiation in excess of 10,000 counts per second (CPS) was measured in the deepest intervals on 6 drill set-ups, demonstrating the zone is open at depth and warrants further drilling. Assays from Western Extension are pending.

Eastern Extension

The discovery of the Eastern Extension zone was initially made by testing a northwest trending linear VLF EM conductor similar to Lac Cinquante, using 6 reverse circulation (RC) holes drilled from three set-ups. Currently, two diamond drills are delineating the Eastern Extension, which starts approximately 450 metres east of the Lac Cinquante inferred resource area.

Mineralization is very similar to that found at Lac Cinquante, primarily hosted in the same hematite-carbonate-chlorite-graphite altered tuff unit. Radioactivity is associated with quartz-carbonate veining, breccia and sulphides within the sheared host rock.

1,525 metres in 11 diamond drill holes have now tested the Eastern Extension zone from three set-ups spaced 50 and 350 metres apart respectively. All holes were drilled to the northeast with azimuths bearing 26 degrees, at inclinations between minus 45 and 89 degrees. Eight holes have intersected anomalous radioactivity along 400 metres strike length, and between 35 and 255 metres vertical depth. The RC and core holes have confirmed the continuation of the Lac Cinquante structure eastward with highly radioactive intercepts up to 2.0 metres wide in a zone dipping 70 degrees to the southwest. Drilling will continue at the Eastern Extension and assays will be released upon receipt and review.

QA/QC

Half-spilt core samples from holes drilled at the Western Extension and Eastern Extension zones, with anomalous radioactivity levels between 250 and 56,000 CPS measured to date, will be sent to Saskatchewan Research Council Geoanalytical Laboratories (SRC) for analysis. 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. Chemical assay results from this drill program will be reported by Kivalliq upon receipt.

Natural gamma radiation in drill core was measured in counts per second (CPS) using a hand-held Radiation Solutions Inc. RS-121 scintillometer. The Company cautions that scintillometer readings are not directly related to uranium grade and are only used to indicate zones of radioactive material.

Disclosure of a technical nature contained in this release has been reviewed and approved by Kivalliq's president, Jeff Ward, P.Geo. Mr. Ward is the Qualified Person for the purposes of National Instrument 43-101.

About Kivalliq Energy Corporation

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

With an NI 43-101 compliant Inferred Mineral Resource of 810,000 tonnes grading 0.79% U3O8, totaling 14.15 million lbs U3O8 (17.5 lbs U3O8/tonne) at a 0.2% U3O8 cut-off grade, the Lac Cinquante Deposit is Canada's highest grade uranium deposit, outside of the Athabasca Basin. Kivalliq's flagship project, the 225,000 acre Angilak Property in Nunavut, hosts the high-grade Lac Cinquante deposit, along with nine additional high priority target areas. Since acquiring the Angilak Property in 2008, the Company has invested approximately $17 million conducting systematic exploration.

On behalf of the Board of Directors

James Paterson, CEO

Kivalliq Energy Corporation

Kivalliq Energy Corporation is a member of the Discovery Group of companies, for more information on the group visit www.discoveryexp.com.

Certain disclosures in this release, including management's assessment of plans and projects and intentions with respect to 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 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.

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.

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