2010 Prospecting Program at Angilak Identifies 9 High Priority Target Areas;

Assay Highlights Include Multiple Grab Samples In Excess of 25% U3O8

Vancouver, B.C. – Kivalliq Energy Corporation (KIV: TSX-V) (the “Company” or “Kivalliq”) today announced assay results from the 2010 summer prospecting program at the 225,000 acre Angilak Property in Nunavut, Canada. Nine priority areas were identified based upon results, including assays from 290 grab samples collected from in-situ rock sources and glacial float material, over an eight week period from July through September 2010. Of the samples collected, 17% returned values in excess of 1% U308. In addition, several samples returned high grade values in silver, molybdenum, copper and gold.

“The 2010 prospecting program continued to demonstrate the potential of the Angilak Property,” stated Kivalliq’s President, Jeff Ward, P. Geo. “This year’s prospecting program has already led to the discovery of Lac Ciquante style mineralization in drill hole 10-NE001 and will provide us with the basis for an aggressive 2011 exploration program.”

Prospecting Program Highlights

• 9 new priority areas identified
• 51 samples assayed over 1% U308
• High grade silver, molybdenum, copper and gold mineralization identified in several showings

High-Grade Sample Highlights

 Sample ID # - Grades by Metal

• Sample 14968 - 47.8% U3O8, 1.58% Mo, 1.74% Cu, 16.5% Pb, and 740 g/t Ag
   
• Sample 14639 - 42.1% U3O8, 0.431% Cu, 11.8% Pb and 197 g/t Ag 
   
• Sample 14568 - 35.4% U3O8 and 683 g/t Ag
   
• Sample 14876 - 30.7% U308 and 690 g/t Ag
   
• Sample 14771 - 30.1% U308 and 341 g/t Ag

For geological maps identifying key samples and areas from Kivalliq’s 2010 prospecting program and a table of key results , please visit www.kivalliqenergy.com/projects/index.php?&content_id=79#section120

Background

The 225,000 acre Angilak Property hosts more than 150 historic mineralized showings discovered in the late 1970’s and early 1980’s by several companies formerly active in the region, including Pan Ocean Oil, Noranda Resources Inc. and Urangesellschaft of Canada Ltd. For the 2010 prospecting campaign, historic occurrences were ranked and prioritized based on geological setting and past results. Of these, 38 areas were selected for follow-up. These areas were then used as focal points for initial follow-up, expanding exploration to cover favourable trends and geology.

2010 Prospecting Program

A helicopter supported four man prospecting crew explored the Angilak property for approximately eight weeks during July, August and September.  In addition to expanding historic areas of interest identified by previous operators, several new radioactive showings were identified in 2010.

Prospecting and mapping identified 9 high priority areas based upon results from a total of 290 grab samples.  Of these samples, 151 are considered to represent insitu source rocks, including samples collected from historic trenches, mineralized outcrops and subcropping exposures. The remaining 139 samples represent glacial float material, such as cobbles and boulders, frost heaved clasts and glacial till.

A high proportion of these samples collected during the program returned high grade uranium, copper, molybdenum, lead , silver and gold values. Results to date have identified at least 9 areas that display significant potential for uranium and other mineralization in bedrock. These are considered high priority areas, with 51 samples returning U3O8 results in excess of 1%, as shown on the prospecting map that accompanies this release and also summarized below.

Joule Trend

The Joule trend is a 1.75 kilometre long, southeast striking area scoured by glacial outwash, hosting  sheared and faulted volcanics, with vein controlled mineralization. The trend coincides with a 4.5 kilometre long geophysical conductor, analogous to the Lac Cinquante Main Zone which is located five kilometres west. Historic work includes the discovery of a 12 pound pitchblende boulder four short drill holes within the trend. Most of the 2010 work encountered narrow widths of very radioactive mineralization (<50 cm), however mineralization styles and grades show similarities to Lac Cinquante. The trend is also situated just 2.5 kilometres west of Kivalliq’s main “Nutaaq  Camp” site.

Highlight samples from the Joule Trend:

• Sample 14968 - 47.8% U3O8, 1.58% Mo, 1.74% Cu, 16.5% Pb, and 740 g/t Ag from float material collected near the western extent of the anomalous trend
   
• Sample 14795 - 22.6% U3O8, 0.45% Mo, 0.616% Cu, 7.90% Pb and 314 g/t Ag from a strongly altered hematitic brittle fracture set in a gabbro outcrop, 140m along strike to the southeast from 14968
   
• Sample # 14771 - 35.4% U3O8 and 683 g/t Ag; Sample # 14773 - 30.1% U308 and 341 g/t Ag; Sample #14568 - 25.3% U308 and 280 g/t Ag from cobbles collected centrally within the Joule trend 
   
• Sample 14639 - 42.1% U3O8, 0.431% Cu, 11.8% Pb and 197 g/t Ag  from a narrow 5 cm wide pitchblende/limonite vein,  1.4 kilometres southeast  of the high counts returned by sample 14968 and 14795 on the eastern end of the Joule trend
   
• Sample 14561 - 6.65% U3O8, 1.23% Mo, 3.2% Pb and 315 g/t Ag from an outcrop on a parallel southeast trending linear, located 800m north

Numerous additional outcrop and float samples within the Joule trend returned strongly anomalous values that corroborate high grade values shown above and demonstrate the prevalence of uranium along the entire trend. The Company has identified multiple high-priority targets to test in this area during the 2011 exploration program. 

Blaze Zone

The area referred to as Blaze returned several strongly anomalous values from float material, surrounding a sequence of south east trending conductors similar to the geophysical response seen at Lac Cinquante. A radioactive sulphide‐bearing vein and angular float was uncovered east of the conductors, indicating uranium mineralization may be present along these conductive sources. One conductor was successfully drill tested by DDH 10-NE-001 which returned two high grade U3O8 intersections of 0.83% U3O8 over 1.4 metres and 0.66% U3O8 over 2.4 metres (released Dec. 13, 2010) 

Highlight samples from the Blaze Zone:

• Sample 14876 – 30.7% U3O8, 0.24% Cu, and 690 g/t Ag from pitchblende rich chlorite/ carbonate float collected approximately 300m southeast from drill hole 10-NE-001 along strike of the VLF conductor tested
   
• Sample 14951 – 26.3% U3O8, 1.29% Cu, and 240 g/t Ag from pitchblende rich float material collected approximately 225m northeast from drill hole 10-NE-001
   
• Sample 14589 – 10.5%U3O8, and 39 g/t Ag from pitchblende float material collected adjacentl to a an untested VLF conductor approximately 550m northeast from drill hole 10-NE-001

Forte

The Forte trend lies 3 kilometres west of the Blaze area near old trenches in radioactive conglomerate. However, the area to the north was not well explored  and hosts a 500 m fault crosscutting a regional conductor with tuff, basalt, mineralized sandstone float on surface and a new radioactive boulder train not previously reported. Sample # 14553 returned assay values of 3.07% U3O8, 0.94% Cu and 102 g/t Ag.

PWR

The PWR area is located 7.3 kilometres due north of Lac Cinquante in mixed gneissic rocks. Two old trenches expose high grade  pitchblende‐Cu sulphide veins at the contact between mafic and granodioritic gneiss. A zone of highly radioactive veinlets 1 to 5 cm in wide host are surrounded by hematite alteration. Magnetics suggest PWR may be related to regional deformation along a structure. Sample # 14593 returned assay values of 14.4% U3O8, 1.29% Mo and 135 g/t Ag.

Force

The Force trend is underlain by gneissic rock and mafic schist situated central to the property. Mineralization is found as very radioactive mudboils and subcrop which likely represent structurally controlled, uranium bearing hematite breccias and veins just below surface. Sample # 14984 returned assay values of 21.40% U3O8, 1.12% Cu and 1980 g/t Ag.

Lucky Break

The Lucky Break area is a new showing discovered in 2010. The area is situated 11.3 kilometres NW of Lac Cinquante. Outcrop exposure is minimal in the immediate area, but several highly radioactive polymetallic sulphide and pitchblende in quartz-carbonate breccia veins were recovered from subcrop beneath 30‐60 cm of till cover. Sample # 14978 returned assay values of 4.53% U3O8, 2.62% Cu and 78 g/t Ag.

Bog

The Bog trend is located in sheared and faulted basement gneiss intruded by trachytic dykes of the Christopher Island Formation, 14.5 kilometres northwest of Lac Cinquante. Previous operators delineated a SW‐trending crustal break, which was not drill tested. Radioactive outcrop, subcrop, and frost heaved boulders are found along a 3 kilometres of strike length, in an area largely covered by till. Uranium and sulphide seems to be controlled by shear/fracture structures and alteration related to dykes intruding granodioritic gneiss. Sample # 14830 returned assay values of 1.42% U3O8, 2.12% Cu and 70 g/t Ag.

VGR

The VGR trend is located approximately 25 kilometres northwest of Lac Cinquante, just inside the Yathykyed sub-basin. Previous operators performed geological, geophysical, and geochemical work between 1977 and 1981, but did not drill test this target. The trend hosts a 3 to 7 metre‐wide, steeply‐dipping  carbonate/hematite vein and fracture system hosting radioactivity and sulphide mineralization. Radioactive boulders and structure can be traced for over 3000 metres, making the VGR trend an excellent target for unconformity-type mineralization. Sample # 14766 returned assay values of 3.64% U3O8 and 2040 g/t Ag.

YAT

The Yat area is located 15.6 kilometres SW of Lac Cinquante near the northern margin of the Angikuni subasin. The trend comprises a 100 m long string of sulphide‐bearing and radioactive subcrops in clastic rock. A grab sample collected in 2007 returned 39 grams Au, 100 ppm Ag, 1.18% Cu, and 0.24% U3O8 from brecciated quartz –carbonate veined float and trenches. Samples collected in 2010 confirmed and improved on these values, including sample # 14787 with 1.44% U3O8, 1140 g/t Ag, and 12.90 g/t Au.

Overview of 2010 Exploration Program at Angilak

The 2010 Program at Angilak operated from April to October and consisted of new camp construction, property-wide prospecting, environmental baseline studies, and a total of 16,600 metres of resource definition and exploratory drilling in 107 holes. All results have now been reported from both the 2010 drill program and prospecting campaign.

The remainder of the year will be dedicated to technical and resource modeling analysis with the goal of establishing a NI 43-101 mineral resource by Q1 2011.

QA/QC

Samples collected as part of the 2010 prospecting program were comprised  of grab samples generally less than 2.5 kilograms in size . All samples were analyzed for U3O8 and a multi-element suite by Saskatchewan Research Council (SRC) Geoanalytical Laboratories. 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. ICP results U>1000 parts per million (ppm) are analyzed using SRC’s ISO/IEC 17025:2005-accredited U3O8 Assay method. Other metal s analyzed by ICP were reported in ppm and subsequently converted to % or grams/tonne. Other metals will be verified by additional assays. Gold was analyzed using the Au1 and Au3 fire assay methods. Laboratory quality control (QC) includes a repeat analysis on every 20th sample. Repeat samples had good reproducibility.

Disclosure of a technical nature contained in this release has been reviewed and approved by Jeff Ward, P.Geo. (President, Kivalliq) who 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.

The Lac Cinquante Deposit is Canada’s highest grade uranium deposit outside of the Athabasca Basin.   Kivalliq’s core asset, the 225,000 acre Angilak Property hosts the historic Lac Cinquante uranium deposit, and over 150 other uranium occurrences. Since acquiring the project in 2008 the Company has invested approximately $11.9 million on the property conducting systematic exploration which has included ground and airborne geophysics, geological mapping, prospecting and 18,350 meters of drilling.

On behalf of the Board of Directors

“Jim Paterson”

Jim Paterson, CEO
Kivalliq Energy Corporation

For further information about, Kivalliq Energy Corporation or this news release, please visit our website at www.kivalliqenergy.com (m.kivalliqenergy.com) or contact Investor Relations toll free at 1.888.331.2269, at 604.646.4527, or by email at [email protected]. 

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

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