Strateco Resources Inc.
OTC Bulletin Board : SRSIF

Strateco Resources Inc.

June 01, 2006 10:38 ET

Strateco Closes a CDN$9,000,000 Private Placement and Resumes Drilling on its High Grade Uranium Project in the Otish Mountains

MONTREAL, QUEBEC--(CCNMatthews - June 1, 2006) - Strateco Resources Inc. (TSX VENTURE:RSC)(OTCBB:SRSIF)(FRANKFURT:RF9)

Strateco Resources inc. (Strateco) is pleased to announce that it has closed a non-brokered private placement of Cdn $9,000,000. A total of 7,200,000 units were sold at a price of $1.25 per unit. Each unit consists of one common share and one half of warrant, with each whole warrant entitling its holder to purchase one common share of the Company for a 18-month period, at $1.50 per share.

If the trading price of the common shares of Strateco on the TSX Venture Exchange is equal to or greater than $1.70 for 20 consecutive trading days, Strateco shall be entitled to notify the warrant holders of its intention to trigger the exercise of the warrants at any time after four months and one day following the closing date. Upon receipt of such notice, warrant holders shall have a period of 30 calendar days to exercise the warrants, at the end of which the warrants will expire.

The Company paid an 8% cash commission as finder's fee.

In accordance with securities legislation, the shares and warrants issued under the private placement will be subject to a "hold period" of four months and one day from the closing date.

The net proceeds of this private placement will be used for exploration of the Matoush and Mont-Laurier uranium projects and for working capital. A budget of $6M has been allocated to the Matoush project and a $1M to the Mont-Laurier project.

Strateco is also pleased to announce that drilling will resume on its wholly owned high grade Matoush uranium property in the Otish Mountains. Drilling is scheduled to resume during the week of June 12th. A first phase of 10,000 metre representing approximately 30 holes will be drilled in the vicinity of Hole AM-15.

The previous drilling program, which began at the end of March 2006 was temporarily suspended on April 16 for the spring break-up after the first six holes had been drilled. Five of the holes were drilled on the Matoush project in the vicinity of Hole AM-15, drilled by Uranerz Exploration and Mining ("Uranerz") in 1984. Hole AM-15 had returned a 16-metre intersection grading 0.95%U3O8 per tonne (19 lbs per ton). While Strateco's Hole No. 1 needs to be re-drilled because very poor recovery, holes No. 2, 4 and 5 intersected outstandingly high-grade results over considerable widths.

The following table summarizes the results obtained. The current uranium price is around US$42/lb.

Hole From To Core length %U3O8 lb/ton
(m) (m) (m)
MT-06-1 276.4 279.0 2.6 0.172 3.44
MT-06-2 285.4 303.6 18.2 0.74 14.80
including 285.4 297.2 11.8 0.91 18.20
285.4 293.0 7.6 1.03 20.60
MT-06-3 264.0 270.0 6.0 0.056 1.12
290.7 292.8 2.1 0.069 1.38
Hangingwall 295.4 309.5 14.1 1.01 20.20
including 295.4 304.5 9.1 1.39 27.80
299.3 304.5 5.2 2.01 40.20
Fault zone 317.5 321.0 3.5 1.47 29.40
Hangingwall 301.3 312.6 11.3 1.33 26.60
Fault zone 319.5 321.4 1.9 1.19 23.80

The true width represents approximately 80% of the core length.

In the coming months, the main focus of the Matoush exploration program will be to continue drilling the uranium-bearing structure in the vicinity of AM-15 on a tight regular grid in order to estimate the resource. Both the Hangingwall and Fault zones of this high-grade structure remain fully open in all directions.

Strateco will also conduct an extensive surface exploration program during the summer of 2006 on the 330 claims of the Matoush project, representing approximately 180 km2. The Matoush structure, which has been identified over a distance of seven kilometres, will be the point for the program on the property, which now covers the structure over more than 24 kilometres north-south.

Chief Executive Officer Guy Hebert stated: "The Matoush discovery is the most significant uranium discovery of all time in Quebec, and probably the highest-grade and value discovery by a junior mining company in this uranium cycle."

Qualified Person

Jean-Pierre Lachance, geologist, is the qualified person as defined by National Instrument 43-101. He has over 30 years of experience in mining exploration.

Forward-Looking Statements

This press release contains forward-looking statements subject to certain risks and uncertainties. There can be no assurance that these statements will prove to be correct, and actual results and future events could differ materially from those implied by such statements. These risks and uncertainties are discussed in the annual report filed with the securities commissions of Alberta, British Columbia and Quebec, and in the 10-KSB annual report filed with the US Securities and Exchange Commission. The Company does not undertake to publicly revise or update any such statements on the basis of new information, future events or any other event.


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