Mr. Jim Paterson reports

KIVALLIQ GENERATES HIGH PRIORITY BASEMENT TARGETS AT HATCHET LAKE

Kivalliq Energy Corp. has released results from the summer exploration program at its 100-per-cent-owned Hatchet Lake property in the Athabasca region of Saskatchewan.

"Results from Kivalliq's first exploration program at the Hatchet Lake property have confirmed and enhanced basement-hosted uranium targets identified by previous operators Hathor and Rio Tinto. Further work to advance the project in 2016 is warranted," stated Jeff Ward, Kivalliq's president. "Based on Hatchet Lake's strategic location near all of Canada's uranium mining and milling infrastructure, a discovery here would have significant development advantages."

The 13,711-hectare (33,881 acres) Hatchet Lake property is situated on the Mudjatik-Wollaston transition zone, 39 kilometres along trend from Rio Tinto's Roughrider deposit and within 29 kilometres of Cameco Corp.'s Eagle Point uranium mine. The 2015 program budgeted at $500,000 was designed to verify airborne geophysical signatures and confirm uranium anomalism in priority target areas.

Highlights of the 2015 program include:

• Nine hundred eight soil and 1,322 vegetation (biogeochemical) samples verified historic results and identified priority target areas at Upper Manson and SW Scrimes, both having soil and vegetation geochemical uranium anomalies.
• One hundred forty line kilometres of ground magnetic and VLF electromagnetic geophysical surveying resolved multiple conductive trends and geology at Upper Manson and on the Scrimes Peninsula.
• Grab samples at SW Scrimes returned values up to 2.43 per cent triuranium octoxide from pegmatite boulders and 0.68 per cent U3O8 from a new pegmatitic occurrence in outcrop.
• Comprehensive processing and analysis of all available datasets by Condor Consulting Inc. generated a new Geointerp for the property with 17 prioritized target zones, four of which are considered high priority and correspond to Kivalliq's key target areas.

Two high-priority zones, Upper Manson and SW Scrimes, have emerged based on work to date. The Upper Manson and SW Scrimes targets occur within northeast-trending pelitic and psammopelitic gneiss host rocks and are highlighted by uranium anomalism noted in historic samples from boulders, lake sediments, soils and vegetation. Work by Kivalliq in 2015 was able to confirm anomalous uranium geochemistry in all six areas sampled (soil and vegetation), as well as upgrade the geological and structural model for Hatchet mineralization through Condor's independent analysis. For maps showing results from the 2015 Hatchet Lake exploration program that includes relevant historic data, please visit the company's website.

Soil geochemical sampling

A total of 826 enzyme leach (EL) soil samples were collected and sent for ICP-MS geochemical analysis. Background was the 96th percentile at 2.70 parts per billion U and was determined by the mean plus one standard deviation. Anomalous values were identified in all six grids sampled in 2015. In addition, 82 conventional soil samples were collected at Upper Manson to calibrate the 2015 EL soil results to earlier soil values reported by Hathor Exploration Ltd.

Vegetation (biogeochemical) sampling

A total of 1,322 black spruce twig vegetation (biogeochemical) samples were collected and sent for Ashed vegetation 59-element ICP-MS biogeochemical analysis. Background was calculated at 1.36 parts per million U, the 87th percentile using the mean plus one standard deviation. Anomalous values were identified in all six grids sampled in 2015.

Results from the 2015 program confirmed the efficacy of black spruce sampling as a reliable geochemical method. When used in conjunction with geophysical surveys and soil geochemistry, vegetation sampling is proving to be an effective tool to advance targets.

                HATCHET 2015 GEOCHEMICAL SAMPLING PROGRAM

  2015 enzyme leach soil geochemical     2015 vegetation (biogeochemical)
    results comparative percentile        results comparative percentile
          values for uranium                    values for uranium

Percentile                         U                Percentile           U 
                                (ppb)                                 (ppm)

99%                              8.2                99%               2.32
98%                              5.7                95%               1.77
96%                              2.7                87%               1.36
Min                              0.1                Min               0.17
Max                              337                Max               4.39
Mean                               1                Mean              0.86

Prospecting

The 2015 prospecting program included the collection of 24 grab samples from outcrop and boulders primarily in the Upper Manson and SW Scrimes areas. Samples were mainly collected from pegmatites and leucogranites which represent the majority of exposed radioactive rocks in the property area. Of significance, the SW Scrimes area returned values of 2.43 per cent U3O8 and 1.39 per cent U3O8, respectively, from boulder float at a known occurrence on the north side of Scrimes Lake. A sample from a new radioactive pegmatite outcrop discovered on the south side of Scrimes Lake assayed 0.68 per cent U3O8. Anomalous grab samples at Upper Manson confirmed the extent, location and setting of historic uranium occurrences.

Ground geophysical surveying

Ground magnetic and VLF-EM surveys were carried out on four grids at Hatchet Lake. Approximately 140 line kilometres of ground geophysics focused on geochemically anomalous areas and priority airborne versatile time domain EM (VTEM) conductors. Grid lines were spaced 50 and 100 metres apart, with readings taken at 12.5-metre intervals. The survey grids are dominated by northeast-trending magnetic features with prominent north-trending faulting. The VLF-EM surveys were able to resolve tightly spaced, multiple, shallow conductive trends in both the Upper Manson and Scrimes Peninsula grids, areas where the airborne VTEM suggested broader, singular conductive responses.

Condor Consulting geophysical interpretation

As part of the 2015 program, Condor Consulting conducted comprehensive processing and analysis of two airborne surveys flown over the property in 2007 (airborne VTEM by Geotech and high-resolution airborne magnetics by Goldak). Multiple other data sets compiled by Kivalliq that include radiometric, soil, vegetation and boulder sampling data (2006 and 2012) were incorporated in the interpretation. Condor's work resulted in a detailed GeoInterp, which will be used for future geological and structural interpretation. In addition, Condor independently identified 17 target zones, four of which are considered high priority and correspond to Kivalliq's key target areas.

Quality assurance/quality control

Jeff Ward, PGeo, president of Kivalliq and a qualified person for Kivalliq, has reviewed and approved the publicly available scientific and technical information by previous exploration groups contained in this release. Previous exploration results by Hathor and Rio Tinto referred to herein are historical in nature and have not been verified by Kivalliq. However, Kivalliq believes these results are relevant since programs were carried out by knowledgeable explorers in accordance with acceptable industry practices at the time.

Rock and conventional soil samples from the Hatchet Lake property were sent to the Saskatchewan Research Council (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. Rock samples are first analyzed by SRC's ICP-OES multielement uranium exploration ICP1 method. ICP results for U greater than 1,000 parts per million are analyzed using SRC's ISO/IEC 17025:2005-accredited U3O8 assay method. Conventional soil samples undergo standard geochemical analysis using ICP-MS. Laboratory quality control (QC) includes a repeat analysis on every 20th sample. All QA/QC results for both rocks and conventional soil samples were within expectations.

Enzyme leach (EL) soil samples and vegetation (biogeochemical) samples were sent to Activation Laboratories Ltd. (Actlabs). The Actlabs facility is accredited to international quality standards through the International Organization for Standardization/International Electrotechnical Commission (ISO/IEC) 17025 (ISO/IEC 17025 includes ISO 9001 and ISO 9002 specifications) with CAN-P-1578 (forensics), CAN-P-1579 (mineral analysis) and CAN-P-1585 (environmental) for specific registered tests by the SCC. For EL soil sample analysis, a 0.75-gram sample of B soil horizon is leached in an enzyme matrix for one hour, where it reacts with amorphous MnO2 dissolving it. Metals complex with the acid present and solutions are analyzed and reported in parts per billion with a detection limit of greater than 0.1 ppb U. Vegetation samples were processed using the ashed vegetation 59-element ICP/MS biogeochemical analysis method, reported in ppm, with a detection limit of 0.001 ppm U. QA/QC includes field standards, blanks and duplicates, and those inserted by the Actlabs. All QA/QC results were within expectations.

Ground magnetic and VLF-EM surveying was conducted by SJ Geophysics Ltd. using GEM GSM-19 magnetometer units. The VLF-EM survey instrumentation was on board the GEM magnetometers and collected data from transmission stations at Jim Creek (Seattle), Wash., transmitting at 24.8 kilohertz and Cutler, Maine, transmitting at 24.0 khz. QA/QC was provided by SJ Geophysics and in3D Geophysics Ltd.

Condor Consulting is a recognized expert in the field of airborne electromagnetics and was retained to perform a detailed interpretation on aeromagnetic surveys flown in 2007 over the Hatchet Lake property by Hathor Exploration.

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