KIVALLIQ
Uranium exploration company Kivalliq Energy Corporation recently announced it had found new radioactive zones during exploration activities at its Angilak property suggesting that the organization may find other uranium deposits in the area in addition to what it's already found.

A diamond drill rig at Kivalliq Energy Corp.'s Angilak property, during the 2011 exploration season. President Jim Paterson said the recently completed $2.7 million fundraising round was much more difficult to complete than when the company raised $22 million three years ago. - photo courtesy of Kivalliq Energy Corporation

"This was a target which we were quite excited about," said chief executive officer James Patterson. "I think it tells us that particular target warrants more exploration, and that would be a significant drill program. What we've been trying to tell people is it's not just a target, it's a district."

Patterson said the company was using drilling to try to test the theory that radioactivity in the zone called Dipole at the Lac 50 target at its Angilak property that there were multiple uranium deposits.

The Dipole-RIB Trend - which is a formation of minerals -- is located about 25 kilometres southwest of Lac 50, a previously identified target.

On July 30, the energy corporation issued a news release that said the first exploration drilling of the previously untested Dipole site had led to the discovery of several, radioactive points in a new zone estimated to be between 35 to 48 metres in width.

Furthermore, the company said surveys involving 408 soil samples collected along a 3.6 kilometre long uranium site noted for its unusual chemical makeup next to a marked location at another target called RIB that runs parallel to Dipole. The results of the samples will help the company determine future drill targets.

This discovery means there are more areas of Angilak with deposits similar to what was already identified in the target of Lac 50, stated energy corporation president Jeff Ward in a news release.

Ward also said the potential of the site was enhanced by several kilometres of multiple anomalies in the area measured through physical and chemical analysis of the ground material beneath the surface that have not yet been tested by drilling.

However, Patterson said the company currently doesn't have enough capital for a drilling program at Angilak.

"We're not under any pressure to drill it off right now, he said, adding that the company also took hundreds of samples along the similar RIB site. "We're not going to run into the breach right now with a drill program at Dipole or RIB until we get those results back and get a handle on what our next, best steps are."

Patterson said the site has been temporarily shut down and that no one is there at the moment.

"Whether it's for the rest of the season or whether we go back is really dependent upon market reaction to it," he said, calling it "favourable but muted."

"We think they're good results but it wasn't a slam dunk in terms of huge investor interest into putting more money into the company."

Since the announcement, the price of the energy corp.'s shares has not moved significantly.

On that day, shares closed at 9 cents. On Aug. 12, shares of the company (TSXKIV)

closed at 9.5 cents, down 0.5 cents or 5 per cent.

As for the future of the site, the company said additional exploration, including drilling and surface sampling, is justified along more than two kilometers of combined physical and chemical anomalies at both the Dipole and RIB Trends.

Patterson said analysis and review of the RIB results would determine if the next target for a substantial drilling program would need to take place at Dipole.

As for financing the next step, Patterson said while he was very optimistic about commodities, that didn't mean the rest of the investment world was as well.

Still, he cited the company's recent success at fundraising $2.7 million as a positive indicator.

"I think it's just a matter now of just being wise when we raise money, maximizing efficiency and not overspending when we don't need to," he said. "The market will tell us when there's excitement around uranium stocks and there's not a lot of excitement right now."

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