When it comes to junior uranium exploration and development companies, Kivalliq Energy (KIV-V) is the top pick of mining analysts at brokerage house Raymond James.
The Vancouver-based junior is planning a two-phase exploration program this year at its flagship, fully owned Angilak property in Nunavut to build upon the inferred resource on its Lac 50 trend of 2.83 million tonnes grading 0.69% uranium oxide (U3O8) for contained U3O8 of 43.3 million lb. at a 0.2% U3O8 cut-off.
Kivalliq plans to drill 25,000 metres of diamond drill core focusing on expanding the resource at the Lac 50 trend (already over the last two seasons the company has reported a 300% increase to the resource); testing new zones along strike and parallel to the resource; and investigating the Dipole and VGR targets. It’s also planning 3,000 metres of reverse-circulation (RC) drilling to advance multiple untested conductors along strike and parallel to the Lac 50 trend.
The $15.5-million program “is one of the largest budgets globally for a uranium junior,” the analysts write, noting that the project is in “mining- and uranium-friendly Nunavut,” and hosts “the highest-grading large [greater than 17 million lb.] resource outside of Canada’s Athabasca basin.”
They continue that “these pounds are within five zones starting close to surface in clean, competent ore [positive implications for eventual mine economics],” and add that “further growth is likely in our view, with six mineralized — yet under-drilled — zones, and numerous additional prospects.”
Kivalliq plans to update the current resource for the Lac 50 trend by next April. It will also start a preliminary economic assessment that it hopes to complete before the end of 2014.
Kivalliq will drill from April to June using two diamond drill rigs and one RC rig. Ground geophysical surveying will run concurrently with the drill program.
Depending on the results and market conditions, the company will start the second phase of its exploration program in June, with continued core and RC drilling, and geophysical, geological, geochemical and engineering surveys on the 1,377 sq. km property.
Preliminary metallurgical test results for the Lac 50 trend uranium deposits released in late February demonstrated that alkaline leaching extracted 94.1% of the uranium in 48 hours and 95.9% of the uranium in 72 hours. In addition, the uranium value attained was 71.9% for a final yellowcake product in a preliminary uranium yellowcake precipitation test.
The Angilak project area is 350 km west of the Rankin Inlet and 820 km east of Yellowknife. It’s located in the western Churchill province, a large, Archean craton that has experienced structural and metamorphic overprint in the Proterozoic.
According to a technical report on the property, tectonic activity in the early Proterozoic created local collapse and rift basins that superimposed on the Archean crust. The Baker Lake basin and associated Angikuni and Yathkyed sub-basins were formed as a result of these tectonic processes.
“The contact between these Proterozoic basins and the Archean represents an unconformity that has been targeted globally for uranium, a deposit type termed “unconformity style uranium,” the technical report states, adding that most of these deposits are found in the Athabasca basin in northern Saskatchewan.
At press time Kivalliq was trading at 23¢ per share within a 52-week range of 23¢ to 55¢. The company has 174 million shares outstanding.
Ross Beaty’s Lumina Capital owns 18% of the company.
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