NTS 65 J/09, J/10 and J/11 TECHNICAL REPORT ON THE ANGILAK PROJECT, KIVALLIQ REGION, NUNAVUT Prepared For: Kivalliq Energy Corporation Suite 1440, 625 Howe Street Vancouver, British Columbia, Canada V6C 2T6 Prepared By: APEX Geoscience Ltd. Suite 200, 9797 – 45th Avenue Edmonton, Alberta, Canada T6E 5V8 SIM Geological Inc. 6810 Cedarbrook Place, Delta, British Columbia, Canada V4E3C5 Property Location Centre: Latitude 62º 34’ 33”N Longitude 98º 41’ 41” W Kivalliq District, Nunavut March 24th, 2011 Michael Dufresne, M.Sc., P.Geol. Edmonton, Alberta, Canada. Robert Sim, P.Geo i TECHNICAL REPORT ON THE ANGILAK PROJECT, KIVALLIQ REGION, NUNAVUT TABLE OF CONTENTS PAGE 1.0 SUMMARY .................................................................................................................1 2.0 INTRODUCTION AND TERMS OF REFERENCE ............................................5 3.0 RELIANCE ON OTHER EXPERTS .......................................................................6 4.0 PROPERTY DESCRIPTION AND LOCATION ...................................................6 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY .........................................................................................13 6.0 HISTORY ..................................................................................................................14 6.1 Introduction ........................................................................................................14 6.2 Historic Drilling .................................................................................................20 6.3 Historic Mineral Resource Estimates .................................................................21 7.0 GEOLOGICAL SETTING .....................................................................................21 7.1 Introduction .......................................................................................................21 7.2 Tectonic Setting ................................................................................................22 7.3 Regional Geology .............................................................................................22 7.4 Local Geology of the Angikuni Sub-Basin and Environs ................................26 7.5 Structure ............................................................................................................29 8.0 DEPOSIT TYPES .....................................................................................................22 8.1 Introduction ......................................................................................................29 8.2 Beaverlodge-Type Uranium Deposits ..............................................................30 8.3 Iron Oxide Gold (IOCG) Deposits ...................................................................30 8.4 Unconformity Related Uranium Deposits ........................................................31 8.5 Archean Mesothermal Gold and VMS Deposits ..............................................31 8.6 Nickel and Platinum Deposits ...........................................................................32 8.7 Diamonds ..........................................................................................................32 9.0 MINERALIZATION ................................................................................................33 9.1 Mineralization of the Lac Cinquante Deposit ...................................................33 ii 10.0 EXPLORATION ......................................................................................................36 10.1 Exploration 2008 .............................................................................................36 10.2 Exploration 2009 .............................................................................................41 10.3 Exploration 2010 .............................................................................................44 11.0 DRILLING ...............................................................................................................51 11.1 Historic Drilling at Lac Cinquante ..................................................................51 11.2 Drilling Conducted by Kivalliq ......................................................................52 12.0 SAMPLING METHOD AND APPROACH ........................................................69 12.1 Surface Sampling ...........................................................................................69 12.2 Drill Core Sampling .......................................................................................70 13.0 SAMPLE PREPARATION, ANALYSES AND SECURITY .............................75 13.1 Surface Rock and Soil Sampling ...................................................................75 13.2 Historic Drill Core Re-sampling ....................................................................76 13.3 Drill Program 2009 ........................................................................................76 13.4 Drill Program 2010 ........................................................................................77 14.0 DATA VERIFICATION ........................................................................................78 14.1 Introduction ....................................................................................................78 14.2 Database Validation .......................................................................................78 14.3 QA/QC Sample Insertion ...............................................................................79 15.0 ADJACENT PROPERTIES ...................................................................................83 16.0 MINERAL PROCESSING AND METALLURGICAL TESTING....................83 16.1 Mineralogy Analysis ......................................................................................83 16.2 Metallurgical Test Work ................................................................................86 17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES ...............90 17.1 Introduction ....................................................................................................90 17.2 Geologic Model .............................................................................................91 17.2 Available Data ...............................................................................................91 17.4 Compositing ...................................................................................................95 17.5 Exploratory Data Analysis .............................................................................95 17.6 Bulk Density Data ..........................................................................................96 17.7 Evaluation of Outlier Grades .........................................................................97 iii 17.8 Variography ...................................................................................................97 17.9 Model Setup and Limits .................................................................................98 17.10 Interpolation Parameters ..............................................................................99 17.11 Validation .....................................................................................................99 17.12 Resource Classification ..............................................................................102 17.13 Mineral Resource .......................................................................................102 18.0 OTHER RELEVANT DATA AND INFORMATION .......................................103 19.0 INTERPRETATION AND CONCLUSIONS ....................................................105 20.0 RECOMMENDATIONS .......................................................................................108 21.0 REFERENCES .......................................................................................................111 22.0 CERTIFICATES OF AUTHORS ........................................................................119 FIGURES FIGURE PAGE 4.1 Location of Kivalliq’s Angilak Project ....................................................................7 4.2 Angilak Project Land Tenure ...................................................................................8 6.1 Historic Land Tenure Late 1970’s .........................................................................14 6.2 Location of Historic Drill Holes from Assessment Reports ..................................20 7.1 Simplified Tectonic Setting of the Thelon/Baker Lake Area ................................22 7.2 Geology of the Thelon/Baker Area ........................................................................24 7.3 Geology of the Compilation Area ..........................................................................27 9.1 Locations of Showings Relative to the Angikuni Sub-basin Edge ........................34 9.2 Bedrock Geology of the Lac Cinquante Area, Northeastern Angikuni Lake Sub-basin .................................................................35 10.1 Airborne Vertical Gradient Magnetics and Survey Area .......................................38 10.2 2008 Grab Sample Locations and Vertical Gradient Magnetics ...........................39 10.3 2009 Lac Cinquante Ground Magnetic Survey .....................................................42 10.4 2009 Lac Cinquante Ground VLF-EM Survey ......................................................43 10.5 2010 Grab Sample