Strateco Resources Inc.
OTC Bulletin Board : SRSIF
FRANKFURT : RF9
TSX : RSC

Strateco Resources Inc.

February 24, 2010 08:30 ET

Strateco Resources Inc.: Updated Scoping Study on Matoush Indicates Stronger Economics

MONTREAL, QUEBEC---(Marketwire - Feb. 24, 2010) - Strateco Resources Inc. ("Strateco") (TSX:RSC)(OTCBB:SRSIF)(FRANKFURT:RF9) is pleased to announce an update of the Preliminary Assessment of its 100% owned Matoush property located in the Otish Mountains, 275 km north of Chibougamau, Quebec.

The revision of the Preliminary Assessment was conducted by Scott Wilson Roscoe Postle Associates Inc. ("Scott Wilson RPA"), with the participation of Melis Engineering Ltd. for capital and processing costs.

The revised Preliminary Assessment is based on the National Instrument 43-101 compliant indicated and inferred resource estimate made by Scott Wilson RPA in September, 2009.

Mineral Resource Estimate for Matoush, September 1st, 2009
  Tonnes Grade Pounds U3O8
  (x 1,000) (% U3O8) (x 1,000)
Indicated      
  AM-15 262 0.70 4,039
  MT-34 174 0.89 3,420
Total Indicated 436 0.78 7,458
       
Inferred      
  AM-15 33 0.34 249
  MT-22 822 0.53 9,526
  MT-34 302 0.45 3,003
Total Inferred 1,157 0.50 12,777

Notes:

  1. CIM Definition Standards have been followed for classification of Mineral Resources.
  2. The cut-off grade of 0.1% U3O8 was estimated using a U3O8 price of US$75/lb and assumed operating costs.
  3. High U3O8 grades were cut to 9%.
  4. The Mineral Resource estimate uses drill hole data available as of September 1, 2009.
  5. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
  6. Totals may not sum correctly due to rounding.

The following is a summary of the Preliminary Assessment results (conducted on February 2010). The updated report will be available on Strateco's website (www.stratecoinc.com) and on SEDAR (www.sedar.com) within 45 days.

The Preliminary Assessment is based, in part, on inferred resources, and is preliminary in nature. Inferred resources are considered too geologically speculative to have mining and economic considerations applied to them and to be categorized as Mineral Reserves. There is no certainty that the reserves development, production and economic forecasts on which this preliminary assessment is based will be realized.

I PRODUCTION AND RECOVERED METAL

The mining plan was based on mineral resources with factors applied for dilution and extraction. Recovered metal is based on metallurgical tests done at SGS Lakefield Research Ltd. in Lakefield, ON; an average of 97.6% recovery is used. Potential grade implied mining dilution at 15% at zero value. Mill design was modified to increase annual mill capacity from 2.0 M to 2.7 M pounds U3O8.

Year Mill Feed  (x 1,000) Tonnes Grade % U3O8 Recovered Metal 97.6%  (x 1,000 pounds) U3O8
1 169.8 0.639 2,391.3
2 240.6 0.400 2,124.2
3 262.7 0.461 2,668.9
4 262.2 0.522 3,018.9
5 249.5 0.561 3,085.0
6 224.1 0.496 2,451.2
7 239.6 0.468 2,472.3
TOTAL 1,648.6 0.501 17,774.8

II REVENUE

  • The price scenario was established by SD Energy in September 2008, in the initial scoping study, with a long term price from US$60.00 to US$90.00 per pound U3O8 over the life of the project with an evaluation price of US$75.00 per pound U3O8.
  • The exchange rate US$/CAN$ is 0.85.
  • Transport to smelter in North America is $0.10 per pound.
  • Royalty 2%.
  (x 1,000) CAN$
Gross Revenue 1,568,363
Transport to smelter 1,777
Royalty 31,332
NSR Gross Revenue after the Royalty 1,535,253

III OPERATING COSTS (CAN$)

Mining $91.64/T milled Maintenance $24.86/T milled
Process $92.74/T milled Site services $32.68/T milled
Power (generators) $35.77/T milled G&A $22.43/T milled
Average Operating Cost: $300.12/T milled
CAN$27.84/pound US$23.66/pound

IV OPERATING PROFIT

Year CAN$ Year CAN$
1 131,819,000 5 189,170,000
2 107,096,000 6 136,345,000
3 153,437,000 7 139,824,000
4 182,793,000    
Total Operating Profit: CAN$1,040,484,000

V CAPITAL COSTS

  (x 1,000) CAN$ (x 1,000) CAN$
Direct Capital Costs   191,009
  Mine 32,466  
  Process 143,146  
  Infrastructure 15,398  
     
Indirect Capital Costs   48,568
     
Contingency   52,273
     
Capital Spare   980
Before Start Up   292,830
     
Sustaining Capital (6 years)   19,126
     
Closure   30,000
Mine Life Capital Costs   341,955

VI FINANCIAL

Internal Rate of Return before Tax: 41.5%

NET PRESENT VALUE (NPV) before Tax
Discount Rate % (x 1,000) CAN$
5 475,550
8 377,640
10 323,530
15 218,070

VII SENSITIVITY TO PRICE 

PRICE US$/lb NPV
  75.00 $    323,530
0.67 50.00 $     31,700
O.80 60.00 $    148,260
1.00 75.00 $    323,530
1.07 80.00 $    381,890
1.14 85.50 $    446,220
     

"Regardless of the significant inflation in operating costs in the mining industry, our Matoush project indicates stronger economics, compared to the initial scoping study. Despite a possible price decrease, it is still possible to see our economics improve. We continue to evaluate different engineering alternatives to enhance the project's economics, such as the use of windmills to produce electricity. Closure costs were kept to $30 Million, work will be done to reduce this important cost," says Mr Guy Hebert, President and CEO. "We continue to expand mineral resources with an aggressive drilling program of 120,000 meters over the next 24 months," continues Mr. Hebert.

This press release has been read and approved by Jean-Pierre Lachance, Geo., Executive Vice President of Strateco Resources Inc. and Normand L. Lecuyer, P.Eng, Principal Mining Engineer and David A. Ross, P.Geo., Senior Consulting Geologist at Scott Wilson Roscoe Postle Associates Inc. who are the qualified persons as defined under National Instrument 43-101.

CAUTIONARY NOTE TO U.S. INVESTORS -The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on this press release, such as "measured," "indicated," and "inferred" "resources," which the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 10-KSB which may be secured from us, or from the SEC's website at http://www.sec.gov/edgar.shtml.

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, Ontario and Quebec, and in the 10-KSB annual report filed with the US Securities and Exchange Commission.

Contact Information

  • Strateco Resources Inc.
    Guy Hebert
    President and Chief Executive Officer
    450-641-0775 or 1-866-774-7722
    450-641-1601 (FAX)
    ghebert@bbhgm.com
    or
    Strateco Resources Inc.
    Jean-Pierre Lachance
    Executive Vice President
    450-641-0775 or 1-866-774-7722
    450-641-1601 (FAX)
    jplachance@bbhgm.com
    or
    Strateco Resources Inc.
    Kahina Mostefai
    Investor Relations Assistant
    450-641-0775 or 1-866-774-7722
    450-641-1601 (FAX)
    kmostefai@bbhgm.com
    www.stratecoinc.com