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High Grade Assays Received from 2011 Exploration Drilling at Angilak;

Priority Targets Confirmed for 2012 Campaign

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January 10, 2012

Vancouver, B.C. - Kivalliq Energy Corporation (KIV: TSX-V) (the "Company" or "Kivalliq") today provided assay results from 1,732 metres of diamond drilling in 14 holes conducted in 2011 at the Blaze/Spark, Pulse and Joule  Zones. These zones, discovered through drilling in 2010 and 2011, are all located within a 3.0 kilometre radius of the high grade Lac Cinquante uranium deposit, within the 225,000 acre Angilak Property in Nunavut, Canada. All assays have now been reported for core drilled in 2011.

Exploration Drilling Highlights*:

      *Down hole intercepts

“These results demonstrate our success at identifying a growing number of mineralized targets near the resource area,” stated President Jeff Ward. “The encouraging values from exploration drilling have verified our targeting techniques on previously untested conductive trends parallel to Lac Cinquante main zone.”

Pulse
Two diamond drill holes tested the Pulse zone, part of a 3.0 kilometre long VLF EM conductive trend situated 650 metres northeast and parallel to the Lac Cinquante uranium deposit. The holes were drilled to follow up on a mineralized zone identified by anomalous radioactivity in 9 out of 10 reverse circulation (“RC”) test holes along 600 metres of strike length. Preliminary interpretations suggest that mineralization occurs within structurally controlled sheared basalt similar to that found at the Lac Cinquante Western Extension and as pitchblende bearing brecciated quartz carbonate veins. Due to its close proximity to Lac Cinquante and the geological similarities noted, Pulse represents a high priority drill target for the upcoming 2012 exploration campaign.

Blaze
Four holes at Blaze were drilled to test the down dip continuity of the mineralized cross cutting quartz carbonate vein intersected by DDH 11-BZ-010 (announced June 20, 2011) and to investigate the structural controls for mineralization at Blaze. Results suggest the 11-BZ-010 vein has an estimated true width of 1.5 metres to 3.8 metres to a vertical depth of at least 85 metres and that other similarly oriented crosscutting mineralized veins are present.

Spark
A single diamond drill hole tested the Spark zone, a northwest trending linear VLF EM conductor located approximately 500 metres west of Blaze. Mineralization is hosted in altered basalt on the upper contact of a narrow laminated tuff unit. 11-BZ3-001 was drilled to follow up on anomalous radioactivity indicated by 4 out of 8 RC test holes targeting the center of the BZ3 anomaly. 

Joule (JML anomaly)
Four holes confirmed U3O8 values along 25 metres of strike length at the JML anomaly, an east-west trending VLF-EM conductor in the Joule Valley, located 7.0 kilometres southeast of Lac Cinquante. The holes tested anomalous radioactivity identified by 8 RC test holes along 250 metres of strike length.

Also in the Joule area, two core holes tested the J9 anomaly 4.5 kilometres southeast of Lac Cinquante. Drill hole 11-J9-001 intersected a narrow quartz carbonate vein in basalt with anomalous U3O8 values.

For a summary of the 2011 exploration program at Angilak, please see the news release from October 18, 2011. To view updated drill plan maps and tables please visit:  http://kivalliqenergy.com/projects/angilak/program_images/

2011 Exploration Diamond Drill Hole Weighted Assay Results*
DDH
From (m)
To (m)
Interval (m)
U3O8 (%)
Cu (%)
Ag (g/t)
Mo (%)
Prospect
11-BZ-020
45.5
53.1
7.6
0.43
0.27
16.3
0.07
Blaze
61.2
61.8
0.6
0.17
0.03
1.4
0.00
Blaze
91.7
95.0
3.3
0.08
0.01
1.4
0.01
Blaze
140.8
141.2
0.4
0.21
0.02
1.8
0.00
Blaze
11-BZ-021
34.1
36.1
2.1
0.90
0.25
17.0
0.06
Blaze
68.4
75.6
7.2
0.15
0.22
7.0
0.05
Blaze
11-BZ-022
18.1
18.5
0.4
2.75
0.24
24.7
0.08
Blaze
21.4
22.6
1.2
0.09
1.69
16.9
0.09
Blaze
72.6
73.2
0.6
0.30
0.44
30.4
0.19
Blaze
79.6
86.7
7.1
0.14
0.10
19.0
0.09
Blaze
11-BZ-023
31.3
34.6
3.4
0.15
0.64
8.4
0.05
Blaze
86.1
86.5
0.4
0.13
0.01
1.1
0.09
Blaze
11-523-001
53.5
53.8
0.4
0.12
0.01
0.4
0.01
Pulse
66.3
67.0
0.7
0.62
0.01
1.6
0.04
Pulse
11-523-002
68.0
70.3
2.3
0.44
0.59
12.8
0.02
Pulse
86.7
90.1
3.4
0.21
0.03
7.5
0.06
Pulse
11-BZ3-001
54.1
55.6
1.5
0.49
0.03
12.3
0.07
Spark
11-J9-001
30.3
31.1
0.8
0.23
0.04
1.5
0.00
J9
11-JML-001
22.1
25.8
3.7
0.05
0.00
0.1
0.00
JML
11-JML-002
39.2
40.3
1.1
0.13
0.05
3.5
0.00
JML
11-JML-003
51.5
53.0
1.5
0.11
0.05
0.5
0.00
JML
11-JML-004
50.3
50.6
0.3
0.11
0.03
17.0
0.00
JML

*All samples subject to ICP 1 Analysis by SRC in Saskatoon, SK. ICP1 results >1000 ppm U are subject to SRC U3O8 Assay; ICP1 results for Cu, Mo and Ag are reported by SRC in parts per million (ppm).  1 ppm = 1gm/t, 10000 ppm = 1%; Intervals include ICP U analysis in ppm converted to U3O8%.  Conversion to U3O8% = ppm x 0.01179%. Intervals reported are down-hole and true widths are not known at this time. Two exploratory diamond drill holes 11-J9-002 and 11-AG-001 did not intersect mineralization.

QA/QC 

Samples from the 2011 drilling program comprised half split NQ drill core, assayed in 0.25 to 1.5 metre intervals and weighted for results in table. All samples were analyzed for U3O8 and a multi-element suite by Saskatchewan Research Council (SRC) Geoanalytical Laboratories. 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. The samples are first analyzed by SRC's ICP-OES multi-element Uranium exploration ICP1 method. The method analyzes for multi-elements including Ag, Mo, Cu, Pb, Zn and a suite of rare earth elements. ICP results U>1000 parts per million (ppm) are analyzed using SRC's ISO/IEC 17025:2005-accredited U3O8 Assay method. Laboratory quality control (QC) includes a repeat analysis on every 20th sample. Repeat samples had good reproducibility. Kivalliq's QC included the insertion of blanks and standards into the sample inventory at the project site prior to shipment in sealed containers. All QC results were within expectations.

Disclosure of a technical nature contained in this release has been reviewed and approved by Kivalliq’s President, Jeff Ward, P.Geo. Mr. Ward is the Qualified Person for the purposes of National Instrument 43-101.

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 with the Inuit of Nunavut to explore for uranium on Inuit Owned Lands in Nunavut.

With an NI 43-101 compliant Inferred Mineral Resource of 810,000 tonnes grading 0.79% U3O8, totaling 14.15 million lbs U3O8 (17.5 lbs 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. Kivalliq’s flagship project, the 225,000 acre Angilak Property in Nunavut, hosts the high-grade Lac Cinquante deposit, along with nine additional high priority target areas. Since acquiring the Angilak Property in 2008, the Company has invested approximately $30 million conducting systematic exploration, including ground and airborne geophysics, geological mapping, prospecting and approximately 48,000 meters of RC and diamond drilling.

On behalf of the Board of Directors

“Jim Paterson”

James Paterson, CEO
Kivalliq Energy Corporation

For further information about, Kivalliq Energy Corporation or this news release, please visit our website at www.kivalliqenergy.com  or contact Investor Relations at 1.888.331.2269 toll free, directly at 604.646.4527 or by email at info@kivalliqenergy.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Certain disclosures in this release, including management's assessment of plans and projects and intentions with respect to 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 the completion of the 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.