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Kivalliq Energy: High-grade U3O8 intercepts; Growing Resource; District-Scale Potential

With the discovery of the Nine Iron trend plus the intersection of high grade uranium (+2% U3O8) in the J4 Zone within the Lac 50 trend, Kivalliq Energy (TSXV:KIV) continues to demonstrate that its 100%-owned Angilak property in Nunavut has district-scale uranium potential.

Growing Lac Cinquante Resource: Kivalliq has already outlined a high-grade uranium resource within the Lac 50 trend. This deposit currently hosts a NI-43-101 compliant inferred resource containing of 27.1 million lbs uranium averaging 0.69% U3O8. To put that into perspective, this resource is equivalent to a 658,000 oz in-situ gold resource with an average grade of 11.5 g/t gold (based on current gold and uranium prices US$1700/oz gold and US$41.25/lb U3O8).

The company is busy updating this resource with drill data from the J4 and Ray zones as well as additional drill results along strike of the Eastern Extension and the Main Zone of the Lac Cinquante deposit. KIV intends to table an updated resource estimate before the end of the first quarter of 2013.

High Grade Drill Results – J4 zone:

Kivalliq recently released drill results 80 diamond drill holes from within the Lac 50 Trend (a highly prospective zone of rocks measuring 3 km wide by 15 km long). These results included exciting high-grade uranium assays from the J4 Zone. This zone is located just 2 km southeast of the Lac Cinquante Uranium Deposit and is one of five mineralized zones discovered this year within the 252,830 acre Angilak Property. Refer to map below.

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A total of 12,756 metres were drilled at J4 Zone in 2012 and this work outlined uranium mineralization over a strike length of 800 metres and; to a vertical depth of 383 metres, the deepest uranium intercept on the Angilak Property to date
Highlights from some of the assay results are as follows; (*estimated true widths)

  • 2.42% U₃O₈, 0.25% Cu, and 137.4 g/t Ag over 3.8 metres* in hole 12-J4-029
  • 2.86% U₃O₈ and 29.2 g/t Ag over 1.5 metres* in hole 12-J4-038
  • 3.91% U₃O₈ and 18.3 g/t Ag over 0.9 metres* in hole 12-J4-028
  • 2.85% U₃O₈, 0.66% Cu and 20.6 g/t Ag over 1.1 metres* in hole 12-J4-062
  • 0.30% U₃O₈ and 10.1 g/t Ag over 24.1 metres* in hole 12-J4-050

Rob Chang from Cantor Fitzgerald Canada commented in a research report “The above assays represent some of the highest grade uranium intercepts outside of the Athabasca Basin and is significantly higher than the 0.69% U3O8 grade reported for the 27.1M lbs Lac Cinquante deposit, which is already the highest grade uranium deposit located outside of the Athabasca Basin. We further note that the global median grade for uranium projects worldwide is “just” 0.09% U3O8.”

Note: One tonne of rock averaging 2% U3O8 is currently worth $1,815.00. That is equivalent to a gold grade of over one ounce per tonne!

District Scale Potential – Lac 50 and Nine Iron Trend:

Kivalliq has now identified ten significant uranium occurrences within the Lac 50 trend in addition to the Lac Cinquante Uranium Deposit. Five of these new uranium discoveries were drilled this past field season.

Now the company has announced that it has discovered completely new target area that hosts significant uranium mineralization dubbed the Nine Iron Trend. This trend is outlined by a nine-km-long magnetic geophysical anomaly associated with high grade uranium assays. It is located just 10 km southeast of the Lac Cinquante Uranium Deposit.

Kivalliq is excited about the potential of this new discovery and has staked an additional 38 claims or 87,438 acres around the boundaries of its Angilak property. A total of 23 of these claims were located south of the Lac 50 trend covering the western half of the Nine Iron magnetic trend.

The magnetic anomaly and host rocks trend westward below an unconformable contact with the Proterozoic-aged Angikuni Basin. This is significant since high-grade uranium deposits are often intimately associated at or near unconformities in ancient basins.

Refer to map below.

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This past year Kivalliq tested a number of targets and drilled 841 metres in five core holes. Multiple zones of potentially economic uranium mineralization were intersected in all five holes between vertical depths of 17 and 154 metres.

Uranium mineralization is structurally controlled and appears to be focused along the contacts of hard and brittle rock types. For example; around the contact between a hard banded iron formation and softer meta-sediments.

Bottom Line

Kivalliq Energy has demonstrated the potential for Athabasca-style high grade uranium on its Angilak property via the exciting drill intercepts in the J4 zone. The company has also outlined multiple zones of additional uranium mineralization close to its main Lac Cinquante resource. These zones will likely add to its current 27.1 million lb resource base. To top it off, Kivalliq identified and secured an entirely new area of uranium mineralization called the Nine Iron Trend clearly demonstrating the district-scale potential of its Angilak property.

Thomas Schuster – Analyst Bio

With a degree in Geological Sciences from the University of Toronto, Thomas started his career in the 1990s as an exploration geologist in the famous Timmins mining camp in Northern Ontario. He then moved to Vancouver and took a position as staff Journalist at the well-known mining publication, The Northern Miner, reporting the merits and shortcomings of Canadian exploration and mining projects worldwide. This built a foundation for his later work as a Mining Analyst for the Toronto-based institutional investment firm, Fraser Mackenzie. Thomas is currently based in Vancouver working as an independent mining analyst.

Disclosure: No positions at time of writing.

Kivalliq Energy is a client of Dig Media. Dig Media was paid a fee for the creation and dissemination of this commentary.

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