The share price of Strateco Resources (RSC-T, SRSIF-O) surged 26.6% or 21¢ a share to $1 apiece with 8.4 million shares changing hands on news that the junior has doubled the indicated resource at its Matoush uranium project, 300 km north of Chibougamau in Quebec’s Otish mountains.
In the last 12 months, Matoush’s indicated resources, at a cutoff grade of 0.1% uranium oxide, have expanded to 436,000 tonnes grading 0.78% U3O8 for contained uranium oxide of 7.46 million lbs.
The inferred resource is estimated at 1.16 million tonnes grading 0.5% U3O8 for 12.78 million lbs. of U3O8.
The estimate was based on a uranium oxide price of US$75 per lb. and assumed operating costs.
The resources extend over a strike length of 1.4 km and lie in the AM-15, MT-34 and MT-22 zones. (The Matoush structure has been traced 11 km to the south and 2.5 km to the north.)
The indicated resource for the MT-34 zone, which lies in the upper part of the ACF-4 stratigraphic unit, is now estimated at 174,000 tonnes grading 0.89% U3O8 containing 3.42 million lbs. of U3O8.
No indicated resources have been estimated for the MT-22 zone because of drill-hole spacing, which is about 50 metres by 50 metres. This zone will be drilled more tightly during the underground exploration program.
The two most recent holes confirm mineralization lies to the south. Hole MT-09-035, drilled 1 km south of the edge of the current resource, intersected 2.9 metres grading 0.12% U3O8, at the contact of the Matoush fault.
Hole MT-09-036 was drilled 200 metres south of MT-09-035, and intersected a 4-metre section grading 0.26% U3O8.
Last year, two holes drilled 200 metres apart in the upper part of the ACF-4 (EC-09-05 and EC-09-06), more than 6 km south of hole MT- 09-036, returned 0.12% U3O8 over 2.6 metres and 0.11% U3O8 over 2.1 metres.
Strateco bought the property in 2006 and set itself a goal of identifying 15-20 million lbs. of U3O8 to justify commercial production of 2 million lbs. U3O8 per year for eight to 10 years.
“We reached that resource goal very quickly,” Guy Hbert, Stateco’s president and chief executive, said in a statement. “Furthermore, the mineralization on the Matoush property has one of the highest average grades in the world outside of the Athabasca basin, if not the highest, without the problems associated with that area.”
Over the next two years, the company believes its drill program will surpass 120,000 metres.
In the coming months, Strateco will update a scoping study completed last year and expects estimated production costs of US$27.33 per lb. U3O8 or lower.
Environmental studies that are necessary to build a mill and tailing ponds are to begin in 2010. Mill production capacity will be decided based on the resources outlined in 2011. The company’s objective is to sustain a minimum potential production of 4 million lbs. U3O8 per year.
Strateco is eligible for exploration tax credits of about 50% of its surface exploration expenses until the Matoush property enters commercial production.
Over the last year, Strateco has traded in a range of 40¢-$1.77 per share. The company has 119 million shares outstanding.
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