Kivalliq receives royalty payment from Sandstorm; exercises interest option in Baffin Gold

— Photo courtesy Kivalliq Energy Corporation

Kivalliq Energy Corporation (TSX-V:KIV) (“Kivalliq”) today announced, pursuant to an agreement signed on March 27, 2018, receipt of a CDN$600,000 payment from Sandstorm Gold Ltd. (“Sandstorm”) in return for Kivalliq granting to Sandstorm up to a 1.75% net smelter returns (“NSR”) royalty payable on all future mineral production from Kivalliq's Baffin Gold Property, located in Nunavut Territory, Canada. At any time up and until 36 months after signing the agreement, Kivalliq may reduce the Royalty to a 1.0% NSR by making a CAD$1.0 million payment to Sandstorm. Net proceeds will be used to fund exploration and property costs at Kivalliq’s projects in Canada, as well as for general corporate purposes.

Kivalliq also announced that the Company has exercised the Option to earn a 100% project interest on a portion of the Baffin Gold Property from Commander Resources Ltd. (“Commander”), as described in a news release May 8, 2017, by issuing a final 250,000 Kivalliq shares to Commander.

Kivalliq's Chairman & CEO, Jim Paterson, stated: “With the exercise of our Option on a portion of the Baffin Gold Property, Kivalliq now controls a district-scale land package covering highly prospective gold targets along 140 km of strike length. We welcome and sincerely appreciate Sandstorm's continued support of Kivalliq based on the merits of our team and project portfolio in Nunavut Territory.”

The Baffin Gold Property is a district-scale land package covering an entire Proterozoic gold belt having geological and structural similarities to multi-million ounce gold mines in the north (i.e. Meadowbank and Lupin) as well as the prolific Homestake Mine in South Dakota. Previous exploration has identified numerous prospects along 140 km of strike length, with high-grade gold occurring in multiple settings: silicate and sulphide iron formation; shear zones and quartz veins hosted in granodiorite, metavolcanics and metasediments. An existing camp, tidewater access and two 1,200 m airstrips (North Warning System, formerly DEW Line site) will help to accelerate future work programs and potential development.

Kivalliq’s 100% owned Baffin Gold Property is comprised of consolidated mineral tenure approximately 230 km southwest of the community of Clyde River on Baffin Island, in the Qikiqtani region of Nunavut. This property comprises fifteen prospecting permits, six crown mineral claims and three Inuit Owned Land parcels subject to MEA’s with NTI.

Kivalliq Energy Corporation (TSX-V:KIV) is a Vancouver-based company with a portfolio of high-quality uranium and precious metal exploration projects in Canada. In addition to the new Baffin Gold Property, Kivalliq holds Canada’s highest-grade uranium resource outside of Saskatchewan. The Company’s flagship project, the 89,852 hectare Angilak Property in Nunavut Territory, hosts the Lac 50 Trend with a NI 43-101 Inferred Resource of 2,831,000 tonnes grading 0.69% U3O8, totaling 43.3 million pounds U3O8. Kivalliq’s comprehensive exploration programs continue to demonstrate the “District Scale” potential of the Angilak Property. For disclosure related to the inferred resource for the Lac 50 Trend uranium deposits, please refer to Kivalliq’s news release of March 1, 2013.

In Saskatchewan, Kivalliq holds a 100% interest in the 13,711 hectare Hatchet Lake Property adjacent to the north-eastern margin of the highly prolific uranium-producing Athabasca Basin. Compilation of results from previous exploration by Hathor Exploration Limited and Rio Tinto have identified multiple, priority unconformity-related basement targets at Hatchet Lake that were followed up in 2015.

Kivalliq also holds a 50% interest in the 131,412 hectare Genesis Property located northeast of Saskatchewan’s Athabasca Basin, with Roughrider Exploration Limited funding the current exploration program pursuant to an option to acquire up to an 85% interest in the property. This highly prospective project is located along the Wollaston-Mudjatik trend and extends 90 kilometres northeast from Wollaston Lake to the Manitoba border.

Kivalliq’s team of northern exploration specialists has forged strong relationships with sophisticated resource sector investors and partner Nunavut Tunngavik Inc. (NTI) on both the Angilak and Baffin Gold Properties. Kivalliq was the first company to sign a comprehensive agreement to explore for uranium on Inuit Owned Lands in Nunavut Territory, Canada and is committed to building shareholder value while adhering to high levels of environmental and safety standards and proactive local community engagement.

On behalf of the Board of Directors

"Jim Paterson"

James R. Paterson, Chairman and CEO

Kivalliq Energy Corporation