North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Kivalliq Energy Corp. recently completed a successful uranium exploration season at its Angilak Property located 225 kilometers (140 miles) southwest of Baker Lake, Nunavut and reported plans to resume work on the project in 2013.

"We had one of the largest uranium exploration programs on the globe in our peer group," said Kivalliq CEO James Paterson in a September update. "And our 2012 program came in on time and under our budget of C$20 million."

Describing 2011 as a "bumpy ride" in the uranium sector, Paterson said Kivalliq outlined in February plans for what has become "a year of growth through new discoveries" for the Vancouver, B.C.-based junior.

Kivalliq Dec. 3 reported the latest results from 38,856 meters of NQ diamond and reverse circulation drill holes completed in 2012, noting that six mineralized zones were discovered during the season at Angilak. Since 2010 Kivalliq has discovered 10 significant uranium occurrences on the property, which also hosts the Lac Cinquante Uranium Deposit discovered in the 1970s.

The latest results come from the Nine Iron Trend, a mineralized area located some 10 kilometers (six miles) southeast of the Lac Cinquante deposit and five kilometers (three miles) southwest of Kivalliq's Nutaaq camp.

The trend is outlined by a distinct, nine-kilometer- (5.6 miles) long magnetic geophysical anomaly extending below the contact or "unconformity" with the Angikuni Basin.

Drilling in 2012 at the east end of Nine Iron Trend intersected anomalous uranium in five holes over a strike length of 100 meters, and to a vertical depth of 154 meters.

Significant uranium mineralization was intersected in three of five diamond drill holes, including 0.45 percent U3O8 over core interval of 0.9 meters in hole 12-BIF-001; 0.28 percent U3O8 over core interval of 1.3 meters in hole 12-BIF-002; and 0.24 percent U3O8 over core interval of 2.1 meters in hole 12-BIF-003.

In addition, prospecting samples taken in 2011 along three kilometers of the Nine Iron Trend returned high-grade uranium assays, including 13 of 25 grab samples exceeding 1 percent U3O8 and five samples exceeding 15 percent U3O8.

The sample results prompted ground geophysical surveying and geological mapping which revealed a southwest-trending magnetic anomaly that coincided with both prospecting results and a 10-kilometer by one-kilometer (6 miles by 0.62 miles) belt of Archean-aged metasedimentary rocks. The magnetic trend and host rocks sit on the southeastern flank of the Yathkyed Greenstone Belt and trend westward below an unconformable contact with the Proterozoic age Angikuni Basin.

"The Nine Iron Trend is located five kilometers (three miles) from any previously known mineralization and is a completely new target area within the Angilak Property. This trend combines significant uranium in drill core with highly mineralized surface samples, along a sizable geophysical signature that strikes beneath the Angikuni Basin unconformity," said Kivalliq President Jeff Ward. "We consider Nine Iron to be more evidence of the district-scale potential of the Angilak Property, and a high-priority unconformity-related target for 2013."

History of prospectivity

Angilak has been viewed as a highly prospective property since it was discovered in the 1970s. Pan Ocean, one of numerous companies that explored the property since the 1960s, discovered the Lac Cinquante deposit between 1975 and 1981, but very little data is publicly available for historic work completed on the deposit, according to Kivalliq.

In a technical report and resource update released in March, Kivalliq said exploration for uranium ceased abruptly at Lac Cinquante and the surrounding area when Pan Ocean divested its uranium projects in 1982 in the wake of nuclear accidents at the Three Mile Island Nuclear Power plant in 1979 and Chernobyl in 1986, combined with a decrease in oil prices in the mid-1980s. These events negatively affected uranium consumption resulting in depressed uranium prices throughout the '80s.

Kivalliq, a spinout from Kaminak Gold Corp., became the first company in Canada to sign a comprehensive agreement with Nunavut Tunngavik Inc. to explore for uranium on Inuit Owned Land in Nunavut. In 2008, the junior acquired a 100 percent interest in the acreage that hosts the Lac Cinquante deposit in an agreement with the Inuit landowner that encourages uranium exploration.

Today, Kivalliq controls 137,705 hectares (340,268 acres) in its flagship Angilak Property, including 35,386 hectares (87,438 acres) in 38 strategic claims staked in 2012. The company has invested some C$50 million in the project, conducting systematic exploration, including: ground and airborne geophysics, geological mapping; prospecting, and over 87,500 meters of diamond and reverse circulation drilling.

Kivalliq spent about C$17 million on exploration of Angilak in 2011, discovering the Western Extension and Eastern Extension of the Lac Cinquante deposit along with four other mineralized zones - Pulse, Spark, BIF and AG. The work enabled the company to nearly double (92 percent) the inferred mineral resource estimate for the Lac Cinquante deposit to its current level in early 2012.

Year of discovery

In February, Kivalliq unveiled plans for a two-phase, C$20 million exploration program with 35,000 meters of core and RC drilling at Angilak designed to advance the uranium discoveries made in 2011 and increase its NI 43-101 inferred resource estimate of 27.13 million pounds U3O8 in 1.8 million metric tons averaging 0.69 percent U3O8 (at 0.2 percent cut off) for the Lac Cinquante deposit, currently Canada's highest-grade uranium deposit outside of the Athabasca Basin.

By comparison, Areva's Kiggavik Project located about 225 kilometers (140 miles) to the north near Baker Lake, Nunavut, which is currently undergoing environmental assessment, has a resource of 133 million pounds (51,000 metric tons) grading about 0.46 percent U3O8. Based on existing resources, Kiggavik's mine life is estimated at 14 years of operation after three to four years construction.

After a busy spring and summer, Kivalliq reported completion of its field program Sept. 24, including discovery of the J4, Ray, Hot, Flare and Southwest zones. Drilling throughout the season focused on adding inferred resources and testing new mineralized target areas within the Lac 50 Trend, a 15-kilometer-long by three kilometer-wide (10 miles by 2 miles) southeast striking structural trend within Archean volcanic rocks adjacent to an unconformity with Proterozoic sediments of the Angikuni sub-basin.

An unconformity represents time during which no sediments were preserved in a region, but the term is used to describe any break in the sedimentary geologic record. Unconformity-type uranium deposits host high grades relative to other uranium deposits and include some of the largest and richest deposits known.

During the 2012 season, Kivalliq also conducted 930 line kilometers of ground magnetic, VLF electromagnetic, gravity and seismic surveys; prospecting, mapping and RC drilling to test new target areas property-wide as well as ongoing geological, metallurgical, environmental and archeological studies.

The company further emphasized community consultation, including hosting property visits by local community leaders.

From April 13 to Sept. 15, Kivalliq Energy drilled 33,583 meters of NQ core in 173 holes with three diamond drill rigs. The drilling tested the extent of uranium mineralization at the Lac Cinquante deposit down-dip and along the Lac 50 Trend.

Significant deposit in J4 Zone

On July 1, Kivalliq discovered the J4 Zone located about 2.5 kilometers (1.5 miles) east of Lac Cinquante, and since then, drilling has extended the strike length of the J4 zone to 800 meters. The J4 zone is defined by an electromagnetic conductor located 1.8 kilometers southeast of Lac Cinquante's Eastern Extension and about 300 meters north of the Ray zone.

Uranium mineralization at J4 is hosted by two sub-parallel mineralized horizons, 10- 45 meters apart, referred to as the J4 Upper Zone and the J4 Lower Zone. These zones have been intersected at vertical depths of between 35 and 383 meters, the deepest uranium interval drilled on the Angilak Property to date. Mineralization occurs in quartz-carbonate veins, having estimated true widths between 0.2 and 24.1 meters, hosted by a sheared sulphidic, graphitic tuff within a larger sequence of basalt.

Significant uranium mineralization has now been intersected in 49 of 63 holes drilled from 24 sites at the J4 zone. At season's end, the J4 zone remained open along strike and at depth.

By late November, Kivalliq had released assay results from 160 holes, including high-grade uranium assays from the J4 zone. Highlights of the latest assay results from the J4 zone include:

•2.42 percent U3O8, 0.25 percent copper, and 137.4 grams-per-metric-ton silver over 3.8 meters in hole 12-J4-029;

•2.86 percent U3O8 and 29.2 g/t silver over 1.5 meters in hole 12-J4-038;

•3.91 percent U3O8 and 18.3 g/t silver over 0.9 meters in hole 12-J4-028;

•2.85 percent U3O8, 0.66 percent copper and 20.6 g/t silver over 1.1 meters in hole 12-J4-062; and,

•0.30 percent U3O8 and 10.1 g/t silver over 24.1 meters in hole 12-J4-050.

The intervals are estimated true widths.

Tables of all the assay results are available at:

http://kivalliqenergy.com/projects/angilak/program_images/

Ward said drilling at the J4 zone this year "returned assay results with both high grades, and now with Hole J4-12-050, broad intervals of uranium mineralization."

The Ray zone is expressed by a subtle EM conductor parallel to J4 and located two kilometers along strike and southeast of Lac Cinquante's Eastern Extension.
In 2012, a total of 2,796 meters were drilled at the Ray zone from five sites along 310 meters of strike length and uranium mineralization was intersected in 10 of 16 holes drilled at vertical depths between 25 and 129 meters. This mineralization occurs in a narrow sulphidic, graphitic tuff horizon similar to mineralization at Lac Cinquante. The estimated true width of the zone varies between 0.4 and 1.8 meters, with the best result to date being 0.66 percent U3O8 over an interval of 1.2 meters.

Drilling at the Main Zone of the Lac Cinquante deposit tested for mineralization below the current resource using 14 wide-spaced holes, while drilling at the Eastern Extension tested the gap between the Eastern Extension and the Main zone with four holes.


Limited drilling at the Main Zone below the current resource along 1.3 kilometers of strike intersected weak uranium mineralization in four holes, with the best result being 0.43 percent U3O8 over 0.3 meters estimated true width at 300 meters vertical depth (hole 12-LCM-006).

At the Eastern Extension, two of four holes extended known mineralization by 50 meters westward, with the best result being 0.44 percent U3O8 over 0.8 meters estimated true width at 82 meters vertical depth (hole 12-LCE-001).

All holes at the J4, Ray and Main zones and the Eastern Extension were drilled northeast with azimuths of 026 degrees at inclinations ranging from -45 degrees and -90 degrees.

Kivalliq aims to incorporate results from this new drilling within the Lac 50 Trend, specifically the J4 and Ray zones, into a NI 43-101 inferred resource estimate by the end of the first quarter of 2013.

More discoveries

In early November, Kivalliq reported significant assay results from six of seven diamond drill holes at the newly-discovered Hot Zone at Angilak. The Hot zone is located on a 2-kilometer- (1.24 miles) long geophysical target within the Lac 50 Trend, drilled late in the season.

Highlights of the assay results from the HOT Zone include 0.6 meters of 0.37 percent U3O8, 0.70 percent molybdenum and 88.4 g/t silver in HOT-12-003; 3.0 meters of 0.85 percent U3O8, 0.53 percent moly and 56.2 g/t silver in HOT-12-004; and 0.6 meters of 0.53 percent U3O8, 0.21 percent moly and 87.9 g/t silver in HOT -12-005.

Kivalliq completed 1,292 meters of core drilling in seven holes and intersected significant uranium over 150 metres of strike length. The Hot EM geophysical anomaly is located parallel to, and 1.8 kilometers (1.1 miles) northeast of the Lac Cinquante deposit. The Hot zone remains open along strike in both directions and at depth.

Kivalliq also undertook an aggressive RC drilling campaign this season, completing 5,273 meters in 38 exploratory holes. Some 22 of these RC holes generated samples having anomalous radioactivity greater than 500 counts per second. These holes served to prioritize target areas for subsequent diamond drilling and resulted in the discovery of the Flare zone. Additional targets advanced by the RC rig will be tested by diamond drilling in 2013.

Results and interpretation are also pending from 930 line kilometers of ground magnetic, VLF electromagnetic, gravity and seismic geophysical surveys combined with prospecting and mapping programs.

Kivalliq said the fourth quarter of 2012 would be dedicated to initial metallurgical and engineering studies, technical analysis and resource modeling with the goal of identifying new target areas and updating the project's mineral resource in early 2013.