Strateco shuts Matoush property to cut costs

19 June 2014

Strateco Resources' ambition to become the first 'junior' in Canada to start underground exploration for uranium is a luxury it can no longer afford - for now at least.

Strateco has been waiting for years for a certificate of authorization from Quebec's environment department to begin exploration work at its Matoush site, which the company believes has one of the highest average ore grades in the world. It has invested more than CAD123 million ($114 million) in the project, but the company has announced it is shutting down the camp to cut costs. Strateco said it has already finalized the sale of some of the Matoush facilities and equipment.

Strateco plans – through its subsidiary SeqUr Exploration – "to actively pursue" an option agreement signed with Denison Mines last December to earn up to a 60% interest in Denison’s Jasper Lake property in the eastern Athabasca Basin of Saskatchewan, Strateco President and CEO Guy Hébert told World Nuclear News. Its strategy includes airborne surveys, mainly electromagnetic, on all four properties of the Jasper Lake project, which covers an area of 45,000 hectares, Hébert said.

In March last year, Quebec became the third Canadian province, after Nova Scotia and British Columbia, to establish a moratorium on uranium development. Former environment minister Yves-Francois Blanchet announced that no permits for exploration or mining would be issued until an independent study on the environmental impact and social acceptance of extracting uranium has been completed. Blanchet delegated authority on uranium development issues to the province's office of public hearings on the environment, known by its French acronym BAPE.

BAPE started its public inquiry on the uranium industry in May and aims to complete it by the end of 2015.

Blanchet's refusal last November to issue the final permit needed to start advanced exploration on the Matoush project was "an unlawful decision" that showed a lack of impartiality and "violated procedural safeguards", Hébert said.

"All the other permits have already been obtained from the other agencies involved in the process, and the Quebec government itself has delivered more than 20 certificates and authorizations of various types, allowing the realization of the project," Hébert said.

In April this year, Strateco thus served the environment ministry with a notice for damages and interest set at an initial amount of CAD16 million ($15 million).

In addition to the agreement with Denison, Strateco will also "consider reviewing other opportunities in Quebec, where the potential for discovery is still very high," Hébert said. The company "remains confident", he said, that the BAPE review of the Quebec uranium industry "will educate the public and the government and allow informed decisions to be made on the basis of accurate, scientific facts."

The Toronto Stock Exchange has provided some comfort for Strateco by taking the company off its surveillance list. Strateco said it had been saved from delisting thanks to its "restored financial health, which it achieved with the help of its shareholders." The value of Strateco’s shares, which have traded on the TSX since 2007, last closed at 5 cents per share, down from 9.5 cents/share on 9 April.

A junior mining company has exploration assets that it has yet to bring to production.

Researched and written
by World Nuclear News