Kivalliq Energy Corporation: Update on 2012 Drilling at Angilak Property; Western Extension Zone Extended to Depth and New Zones Discovered

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 06/25/12 -- Kivalliq Energy Corporation ("Kivalliq") (TSX VENTURE: KIV) today provided an update on the $20 million exploration program at the 252,830 acre Angilak Property in Nunavut Territory, Canada. Kivalliq reports anomalous radioactivity from additional drilling at the Western Extension, Pulse, and three new zones identified this season. Thus far, diamond drilling in 2012 has focused on evaluating linear electromagnetic ("EM") conductors occurring within 2.5 kilometres of the high grade Lac Cinquante uranium deposit. Assay results will be released when available.

Key Point Summary

--  Western Extension Zone at Lac Cinquante was extended to 365 vertical
    metres by hole 12-LC-007. This is the deepest known radioactive
    intercept reported on the Angilak Property to date.
--  The new Southwest Zone has been discovered 300 metres to the southwest
    of, and running parallel to, the Western Extension.
--  Pulse Zone diamond drilling intersected radioactivity in 14 of 27 holes
    that tested the Pulse geophysical anomaly over 1.3 kilometres of strike
    length.
--  A second new radioactive zone, Flare, is associated with a 1.5 kilometre
    long EM conductor located 1.7 kilometres west of the Lac Cinquante
    resource area.
--  Three core holes at the new Ray Zone have intersected radioactivity
    associated with a subtle EM conductor. Ray is situated two kilometres
    along strike and southeast of the Lac Cinquante resource area.

"Initial results from diamond drilling at numerous conductors close to Lac Cinquante are very encouraging," stated Jeff Ward, President. "This first round of drilling confirmed that targeting geological and geophysical analogues to Lac Cinquante can discover similar radioactive zones nearby with appreciable strike length."

Ongoing aggressive exploration in 2012 will investigate multiple uranium targets discovered or advanced by the 2010 and 2011 prospecting and geophysical programs. In addition, the company intends to build on the current inferred resource of 27.13 million pounds U3O8 at Lac Cinquante. Kivalliq expects to drill 26,000 metres of NQ core on advanced targets using three diamond drill rigs and 9,000 metres of reverse circulation drilling ("RC") designed to prioritise exploration targets. Extensive ground based geophysical surveying, prospecting and soil sampling campaigns are also planned for 2012.

Exploration progress in 2012 to date includes:

--  64 diamond drill holes totalling 11,650 metres focussed on linear
    geophysical targets and radioactive zones from RC drilling
--  17 RC holes totalling 3,048 metres designed to prioritise areas for
    follow up diamond drilling
--  445 line kilometres of ground geophysical surveying

Western Extension

New drilling at the Western Extension has started testing below the current Lac Cinquante resource area. Thirteen diamond drill holes from seven sites intersected the host shear zone using 100 metre hole spacing. Of these, seven intersected anomalous radioactivity, outlining southwest plunging mineralization, including the deepest radioactive intercept on the property to date at 365 metres (hole 12-LC-007). Anomalous gamma values range from 200 to a peak of 17,000 counts per second (cps), with down hole intercepts of 0.3 to 2.6 metres wide. Continued deep drilling is warranted at the Western Extension.

Southwest Zone

Radioactive mineralization was identified along 200 metres of an EM conductor located roughly 300 metres southwest of, and parallel to, the Western Extension. Eight of 11 holes drilled from four sites intersected anomalous radioactivity between 65 to 148 metres vertical depth, in host geology similar to Lac Cinquante. Radioactive readings between 200 and a peak of 28,350 cps were measured over 0.3 to 2.8 metres width down hole.

Pulse Zone

Diamond drilling along 1.3 kilometres of the three kilometre long Pulse EM conductor encountered anomalous radioactivity in 14 of 27 holes drilled in 2012 to date. Pulse is located roughly 700 metres north and parallel to Lac Cinquante; and was confirmed to host uranium through RC and diamond drilling last year (see January 10, 2012 news release). Intermittent radioactivity at Pulse is hosted in narrow carbonate-quartz-hematite veins in steeply dipping sheared basalt or sulphidic tuff. Drilling was from nine sites with varying spacing along strike and to a maximum depth of 170 metres. Radioactivity ranged from 200 to a high of 10,000 cps with down hole intercepts up to 1.1 metres wide.

Flare Zone

The Flare Zone is characterized by a 1.5 kilometre long northwest trending EM conductor located 1.7 kilometres southwest of the Lac Cinquante Western Extension. Six holes drilled from three sites tested the target at 50 metre centres, along 100 metres of a strike length and down to 112 metres. Three holes encountered weak radioactivity ranging from 200 to 7510 cps in down hole widths up to 1.0 metre wide.

Ray Zone

The Ray Zone is a subtle EM conductor two kilometres along strike and southeast of Lac Cinquante's Eastern Extension. Three holes from a single site have intersected anomalous radioactivity with values ranging from 200 to 6450 cps in down hole widths up to 1.0 metre wide. Mineralization at Ray occurs in a narrow sulphidic, graphitic tuff horizon, similar to the same unit hosting mineralization at Lac Cinquante.

All holes in target areas were drilled northeast with azimuths between 26 and 35 degrees at inclinations between -45 and -90 degrees. For maps and drill plan images, please visit: www.kivalliqenergy.com/projects/angilak/program_images

QA/QC

Half-spilt core samples from holes drilled at the Angilak Property, with anomalous radioactivity levels between 200 and 28,350 CPS measured to date, have been sent to Saskatchewan Research Council Geoanalytical Laboratories ("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. Kivalliq's quality assurance and quality control procedures include the systematic insertion of blanks and standards into the drill core sample string. Chemical assay results from this drill program will be reported by Kivalliq upon receipt.

Natural gamma radiation in drill core was measured in counts per second (cps) using a hand-held Radiation Solutions Inc. RS-121 scintillometer or RS-230 spectrometer. Kivalliq cautions that scintillometer readings are not directly related to uranium grade and are only used to indicate zones of radioactive material.

Jeff Ward, P.Geo. and President of Kivalliq has reviewed and approved the scientific and technical information contained in this news release and is the Qualified Person as defined under National Instrument 43-101 for this news release.

About Kivalliq Energy Corporation

Kivalliq Energy Corporation is a uranium exploration and development company and the first company in Canada to sign a comprehensive agreement to explore for uranium on Inuit Owned Lands in Nunavut.

Kivalliq's 252,830 acre Angilak Property hosts the high-grade Lac Cinquante deposit, along with multiple highly-mineralized target areas. With an NI 43-101 Inferred Mineral Resource of 1,779,000 tonnes grading 0.69% U3O8, totalling 27.13 million pounds U3O8, (15.2 pounds U3O8/tonne) at a 0.2% U3O8 cut-off grade, the Lac Cinquante Deposit is Canada's highest grade uranium deposit outside of the Athabasca Basin.

Since acquiring the Angilak Property in 2008, Kivalliq has invested approximately $30 million conducting systematic exploration, including ground and airborne geophysics, geological mapping, prospecting and approximately 48,000 metres of RC and diamond drilling.

On behalf of the Board of Directors

James R. Paterson, CEO

Kivalliq Energy Corporation

For further information about Kivalliq Energy Corporation or this news release, please visit our website at www.kivalliqenergy.com.

Kivalliq Energy Corporation is a member of the Aurora Resource Group of companies. For more information please visit www.auroraresource.com.

Certain disclosures in this release, including management's intentions with respect to the 2012 Angilak exploration program and future exploration programs, constitute forward-looking statements that are subject to numerous risks, uncertainties and other factors relating to Kivalliq's operations as a mineral exploration company that may cause future results to differ materially from those expressed or implied in such forward-looking statements, including risks as to market price of the Company's securities and the market for securities of resource exploration companies in general; commodity prices and, in particular, the price of uranium, the completion of the Company's plans and projects. Readers are cautioned not to place undue reliance on forward-looking statements. Other than as required by applicable securities legislation, Kivalliq expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

Contacts:

Kivalliq Energy Corporation

James R. Paterson

CEO

604.646.4527 or Toll Free: 1.888.331.2269
info@kivalliqenergy.com
www.kivalliqenergy.com