KANGIQLINIQ/RANKIN INLET - Nunavut Tunngavik Incorporated (NTI) has signed an agreement permitting a spin-off exploration company the right to explore for uranium.

Kaminak Gold Corporation signed a memorandum of understanding (MOU) earlier this year with NTI, which granted the exploration company the exclusive right to explore 18,000 acres of land approximately 300 km east of Rankin Inlet.

Rob Carpenter, president and CEO of Kaminak Gold Corporation, and Carson Gillis, director of lands and resources for Nunavut Tunngavik Incorporated, cement a deal that grants Kaminak's spin-off, Kivalliq Energy Corporation, the exclusive right to explore on privately-held Nunavut land believed to host 11.6 million pounds of uranium. - Photo courtesy of Nunavut Tunngavik Incorporated

The company's recent spin-off, Kivalliq Energy Corporation, will take on the project.

The agreement marks the first time a company has been officially granted the right to explore for uranium on privately-held Inuit lands by NTI, which owns the mineral rights to more than nine million acres in Nunavut.

The Kaminak land is host to the Lac Cinquante Uranium Deposit, discovered by Pan Ocean Oil Ltd. in the late 1970s and later acquired by Aberford Resources Ltd.

Aberford's annual report from 1982 stated the deposit contained approximately 11.6 million pounds of uranium. No resource estimate has seen been made. The area has not been explored in 25 years, according to Kaminak.

"It was selected by Inuit during land claims negotiations specifically because of its outstanding potential to host a high grade and sizable uranium deposit," said Carson Gillis, director of lands and resources for NTI.

Kaminak has, over the past few years, purchased a significant amount of surrounding Crown land near Lac Cinquante. The new acquisition brings its told tenure in area to 250,000 acres.

Kaminak's exploration history in the area is partly what persuaded NTI to sign the agreement, the first in the wake of NTI's Uranium Mining Policy, signed last September, according to Gillis.

A lot of companies sent NTI offers for that parcel and other parcels centered around Baker Lake starting as early as 2004, three years before the uranium policy was even in place, he said.

But Kaminak eventually won out.

"They were well-established all around that parcel, and I think that was on purpose," said Gillis. "They wanted to ... get a foothold so they had a good shot at making a competitive bid."

While the bid is confidential, Kaminak paid NTI $50,000 after signing the agreement, and starting in December, Kivalliq Energy will pay an advanced royalty of $50,000 to NTI every year until a mine begins production.

Under the terms of the MOU, after a feasibility study is finished on any part of the parcel, NTI can either take a 25 per cent participating interest or a 7.5 per cent net profits royalty in a mine.

"This agreement will also provide the Kaminak shareholders with a new exploration opportunity," said Rob Carpenter, president and CEO of Kaminak.

The 250,000 acres are now being referred to collectively by Kaminak as the Angilak Project. Angilak is an Inuktitut word that means "biggest."

According to a Kaminak corporate presentation, Kivalliq Energy will commence drilling next year.