Analyst Commentary: Investors Rush to Get a Piece of Kivalliq Financing

Resource Investing News

Kivalliq Energy (TSXV:KIV) recently announced that it closed a greatly oversubscribed non-brokered private placement. The company was able to quickly raise CAD$9.5 million from eager investors. Kivalliq will use the funds for continued exploration on its wholly-owned high-grade Lac Cinquante uranium deposit located within the company’s 227,000 acre Angilak Property in Nunavut, Canada.

Kivalliq Energy (TSXV:KIV) recently announced that it closed a greatly oversubscribed non-brokered private placement. The company was able to quickly raise CAD$9.5 million from eager investors. Kivalliq will use the funds  for continued exploration on its wholly-owned high-grade Lac Cinquante uranium deposit located within the company’s 227,000 acre Angilak Property in Nunavut, Canada.

This year Kivalliq has earmarked a total of CAD$20 million for a two-phase exploration program. The aggressive campaign will advance multiple uranium discoveries made in 2011 and build on the recently announced Lac Cinquante inferred resource of 27.13 million pounds U3O8.

The recent financing was oversubscribed by $2.1 million and this sends a signal to the market that sophisticated investors, (funds, brokerage firms and qualified investors) are excited about the quality and expansion potential of the company’s Lac Cinquante uranium asset. It also attests to the ability of Kivalliq’s management team as well as an endorsement of their progress to date. The company now has CAD$12million in working capital and no debt.

In mid January, Kivalliq announced a 92% increase in the NI 43-101 compliant Mineral Resource estimate for the Lac Cinquante uranium deposit. The newly updated resource now contains 27.13 million lbs of uranium hosted within 1.8 million tonnes of rock averaging 0.69% U3O8 (or 15.2 lbs U3O8 per tonne). This is based on a 0.2% U3O8 cut off grade.

Jim Paterson, Kivalliq’s CEO, recently commented, “Lac Cinquante is one the largest undeveloped and highest grade uranium resources in Canada, outside of the Athabasca Basin, and contains significant quantities of silver, molybdenum and copper. The value that is added with these other metals, in addition to the rate of new discoveries and success at the Angilak Property, are contributing factors to the potential economics of this project as a whole.”

The recent addition of a few “Heavy Hitters” to the management team has also further enhanced Kivalliq’s appeal.  More specifically, Dale Wallster joined the board of directors; Andrew Berry was appointed Chief Operating Officer; and Bill Cronk was appointed Exploration Manager. Dale has many decades of experience in mineral exploration, but is most recently recognized as a key player in the success of Hathor Exploration. In early 2012, Hathor became a wholly-owned subsidiary of Rio Tinto as part of a CAD$650 million acquisition. Andrew and Bill both have considerable expertise in the management of large scale exploration and logistical projects in Canada’s north.

Kivalliq intends to drill 26,000 metres of core with three diamond drill rigs and 9,000 metres of reverse circulation (“RC”) drilling on exploration targets. Extensive ground based geophysical surveys in addition to prospecting and soil sampling campaigns are also planned.

“Our 2012 exploration goals are clear: continue to expand the Lac Cinquante mineral resource along strike and to depth; drill targets on parallel conductors; and demonstrate potential for multiple uranium deposits elsewhere on the Angilak Property,” stated Paterson.

Assay results from 1,732 metres of diamond drilling last year on the Blaze/Spark, Pulse and Joule zones highlight this expansion potential. All of these uranium targets lie within a 3 km radius of the Lac Cinquante uranium resource.

Last year’s prospecting and exploration campaign was highly successful and outlined numerous polymetallic showings in addition to uranium. This year, the company intends to follow up on a number of these targets. The basic exploration and drill timeline for the 2012 exploration campaign is highlighted below.

The first phase of exploration:

  • Mobilization of crews and equipment to the Nutaaq camp in March
  • Commencement of diamond drilling in March
  • Commencement of RC drilling in May
  • Ground geophysical surveys until break-up in June

The second phase of exploration:

  • Commencement in July, pending results and market conditions
  • May include a third diamond drill rig,
  • Will continue RC drilling new targets
  • Will include geophysical, geological, geochemical and engineering surveys

Bottom Line

KIV intends to aggressively expand and advance its uranium resource in Nunavut. This will undoubtedly continue to gain the attention of the majors. The quality asset has attracted “Heavy Hitters” to management and financiers are now starting to line up for tickets to the big game.

Keep in mind that there is a significant and looming uranium supply deficit and the commodity price should continue to rise. The best assets will make the best returns for investors.

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

Kivalliq Energy Non-Brokered Financing of CDN$9.47 Million Closed

Kivalliq Energy Corporation (TSXV:KIV) closed the non-brokered private placement financing previously announced on January 30, 2012.

Continue reading: “Kivalliq Energy Non-Brokered Financing of CDN$9.47 Million Closed

Dale Wallster Joins Kivalliq Board of Directors

Kivalliq Energy Corporation (TSXV:KIV) announced news members to the leadership team: Dale Wallster on the board of directors; Andrew Berry appointed Chief Operating Officer; and Bill Cronk appointed Exploration Manager.

Continue reading: “Dale Wallster Joins Kivalliq Board of Directors

For past Analyst Commentaries on Kivalliq Energy, click here:

January 31, 2012: Kivalliq Almost Doubles Resource at Lac Cinquante in Nunavut and Still has Room to Grow

January 16, 2012: Successful Prospecting has added a silver lining to Kivalliq’s La Cinquante Uranium Project

November 1, 2011: Kivalliq on Track to Significantly Expand Uranium Resource at Lac Cinquante

October 11, 2011: Kivalliq Energy Outlines More Uranium on Angilak Property, Nunavut

August 31, 2011: Kivalliq Energy Corporation Discovers more Uranium on Lac Cinquante Trend

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