Kivalliq Energy CEO: Kivalliq is Using its Exploration Expertise to Diversify its Portfolio in Northern Canada
Kivalliq Energy CEO Jim Paterson outlines his company’s position in Nunavut and Saskatchewan, two prime jurisdictions for gold and uranium, respectively.
Editor’s note: This interview was conducted prior to Kazatomprom’s announcement of aggressive uranium mine production cuts, underscoring Jim Paterson’s comments on primary uranium supply tightening based on the discipline of major global uranium producers.
According to Kivalliq Energy CEO Jim Paterson (TSXV:KIV), the company’s management team and board of directors both have vast experience in developing projects of various types in Northern Canada.
Backed by that expertise, the company has recently diversified its portfolio, broadening its focus from just uranium by acquiring the Baffin gold property in Nunavut.
In the interview below, Paterson outlines the rationale behind this acquisition as well as the jurisdictional benefits of having projects in Nunavut and Saskatchewan. Below is a transcript of our interview with Kivalliq Energy CEO Jim Paterson. It has been edited for clarity and brevity.
Investing News Network: Please give our investor audience an overview of Kivalliq Energy.
Kivalliq Energy CEO Jim Paterson: Kivalliq Energy is based in Vancouver and is led by a board of directors with vast success across many commodities. There is transactional success within our team which is based upon choosing great projects at early stages and advancing them to a point where they’re of interest to major companies.
On the technical side, our team has a lot of experience in Canada, particularly in the northern region of the country. Advancing projects in Northern Canada requires a special skillset so as to address both logistical and geological challenges particular to the region. Additionally, we have the ability to raise funding for our projects and we pride ourselves on developing strong regional relationships and stakeholder engagement.
INN: Please provide an overview of Kivalliq’s projects in Nunavut and Saskatchewan.
JP: We have four projects in Canada with which we are leveraging the upward movement in both uranium and gold prices. Two of these properties are in Canada’s Nunavut territory, including the Angilak uranium property, which is a 1,000-square-kilometer land package south of Baker Lake.
At Angilak we have spent over $55 million on discovery and delineation expenditures, most of which was conducted in the Lac 50 trend area. There, we have identified various stacked structures that carry uranium and other minerals. We have delineated a resource of approximately 0.69 percent U3O8 for a total of 43 million pounds, which is the highest grade in Canada outside of Saskatchewan, and amongst the highest in the world. This is a significant deposit with lots of expansion opportunities, and we think that the Angilak property has district-scale potential and could thus be of interest to partners in the future. In anticipation of this, we currently have three rigs on the property focusing on similar parallel structures to the Lac 50 trend that should help increase the project’s resource once the market turns.
Our second Nunavut project is our recently acquired Baffin gold property: a 4,000-square-kilometer land parcel that sits on a 114-kilometer belt. Historically, previous exploration groups have spent approximately $25 million on the project. We expect to leverage this past work in order to advance the project and delineate the resource.
In Saskatchewan, we have two more projects, both of which are focused on uranium exploration and are within 50 kilometers of the bulk of Canada’s uranium-mining and milling infrastructure. They also sit along an important geological structure. With a positive turn in the uranium sector, we hope to see more interest in these projects, spurring more work on the properties.
INN: Please describe how Nunavut and Saskatchewan compare as mining jurisdictions.
JP: As a premier uranium-mining district, Saskatchewan provides a supportive regulatory environment, strong infrastructure and prospective geology.
Nunavut, on the other hand, has yet to see a uranium mine put into production. However, it is also a mining-friendly jurisdiction as there is plenty of activity in the gold sector and a significant presence of big mining companies in the region that are carrying projects to production. This includes Agnico Eagle (TSX:AEM,NYSE:AEM) with the Meadowbank and Meliadine properties, Sabina Gold and Silver (TSX:SBB) and Goldcorp (TSX:G,NYSE:GG), which is invested in companies in the region.
INN: What are the highlights from the work conducted on Baffin this season and how does it fit into Kivalliq’s mandate as a uranium exploration company?
JP: As a uranium company, we acquired this project primarily because we count on a management team and board of directors that have the proven ability of advancing projects in various commodity spaces. We have had success in silver, gold, metallurgical coal and uranium projects, and we are very familiar with working within the Nunavut territory. We were also attracted to the idea of trying to control an entire district, as this will be appealing to bigger mining companies.
In the Baffin gold property, we have a large land package with anomalous gold that spreads from one end to the other. Historically, previous proprietors have reported extremely high-grade gold samples; our work this season confirmed that, and in some cases expanded those high-grades.
Despite our focus in the uranium space, we felt that the Baffin gold property was a great opportunity that we couldn’t ignore if we wanted to continue adding value for our shareholders.
INN: What does the Baffin gold discovery mean for investors moving forward?
JP: The Baffin gold property gives us flexibility and diversifies our interests without straying away from our area of expertise, which is exploration within Canada. As we advance the project, we may have different paths to follow. For instance, we can fund it ourselves, we can find a joint venture partner or eventually we might sell the property. We consider the project to be highly undervalued and we plan to advance it and add value in a way that helps determine the best course of action.
As a company, we are subject to the volatility of the gold and uranium prices. With the diversification that Baffin provides, we can work with our shareholders’ best interests in mind. As such, if the price of one commodity moves faster than the other, we can prioritize our activities accordingly.
The last few years have been very challenging in the uranium space. While the market is now turning for the better, it feels good to have at least one other project to advance if the uranium price recedes in the near term.
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