Kivalliq Completes $20 million Exploration Program;
Over 38,000 Metres Drilled and Four New Zones Discovered

Vancouver, British Columbia

Kivalliq Energy Corporation (“Kivalliq”, TSX-V:KIV) today announced the successful completion of the field component of the 2012 exploration program at the 252,830 acre Angilak Property in Nunavut, Canada.

2012 Exploration Program: Field Component Highlights

• Discovery of the J4,  Ray,  Flare and Southwest  Zones
• 38,856 metres of core and reverse circulation (“RC”) drilling focused on adding inferred resources and testing new mineralized target areas within the Lac 50 Trend
• 930 line kilometres of ground magnetic, VLF electromagnetic, gravity and seismic surveys
• Prospecting, mapping and RC drilling to test new target areas property-wide
• Ongoing geological, metallurgical, environmental and archeological studies
• Emphasis on community consultation including property visits by community leaders

“2012 was another year of discovery on the Angilak Property, particularly within the Lac 50 Trend, at zones like J4 and Ray. Kivalliq’s exploration team demonstrated great perseverance and skill to execute another successful program on budget,” stated CEO Jim Paterson. “We are confident that our pending drill results will add significant value to this project.”

To view cross sections, figures and maps from the 2012 exploration program please visit: http://kivalliqenergy.com/projects/angilak/program_images/  

A Season of Discovery
On February 22, 2012, Kivalliq announced an aggressive $20 million exploration program, which proposed 35,000 metres of diamond and RC drilling. The completed program exceeded total metres proposed by 11% and succeeded at converting targets into significant discoveries within the Lac 50 Trend.

The Lac 50 Trend is a three kilometre wide by 15 kilometre long southeast striking structural trend within Archean volcanic rocks adjacent to an unconformity with Proterozoic sediments of the Angikuni sub-basin. In addition to the Lac Cinquante Uranium Deposit, the Lac 50 Trend is host to nine significant uranium occurrences discovered by Kivalliq since 2010. 

From April 13 to September 15, 2012, Kivalliq drilled 33,583 metres of NQ core in 173 holes with three diamond drill rigs. Drilling in 2012 tested the extent of uranium mineralization at the Lac Cinquante Deposit down-dip and along the Lac 50 Trend.  On July 1, 2012, Kivalliq discovered the J4 Zone, approximately 2.5 kilometres east of the Lac Cinquante Deposit, and since then, drilling has extended the strike length of the J4 zone to 800 metres. Mineralization at J4 was intersected at a vertical depth of 383 metres, the deepest intercept on the Angilak Property to-date.  At season’s end, the J4 Zone still remains open along strike and at depth.

To date in 2012, Kivalliq has released assay results from 80 holes, including three holes from drilling at the J4 Zone (See news release August 27, 2012). Assay results from an additional 93 drill holes will be released, pending receipt and review, prior to the end of the year. Kivalliq aims to incorporate results from this new drilling within the Lac 50 Trend, specifically the J4 and Ray zones, into a 43-101 inferred resource estimate by the end of Q1, 2013.

Kivalliq also undertook an aggressive RC drilling campaign this season, completing  5,273 metres in 38 exploratory holes. 22 of these RC holes generated samples having anomalous radioactivity greater than 500 counts per second (“cps”). 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 kilometres of ground magnetic, VLF electromagnetic, gravity and seismic geophysical surveys combined with prospecting and mapping programs.

The fourth quarter of 2012 will be dedicated to initial metallurgical and engineering studies, technical analysis and resource modeling with the goal of identifying new target areas and updating the NI 43-101 mineral resource by the end of Q1, 2013.

QA/QC

Natural gamma radiation in drill core and RC chips 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 were sent to the 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 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$50 million conducting systematic exploration, including ground and airborne geophysics, geological mapping, prospecting and approximately 87,500 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. Having 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 Mineral 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 timing of assay results and an updated NI 43-101 resource estimate, 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.

FOR FURTHER INFORMATION PLEASE CONTACT:

Kivalliq Energy Corporation, James R. Paterson CEO 604.646.4527 or Toll Free:

1.888.331.2269 [email protected]  www.kivalliqenergy.com