Stikine - NONDA Frac Sand Project Update

TSX-V: SKY

VANCOUVER, Sept. 9 /CNW/ - Stikine Energy Corp. (TSX.V: SKY) ("Stikine" or the "Company") announces the following update on its work in progress for the Nonda Frac Sand Project, located 150 km west of the Horn River Basin ("HRB"), British Columbia.

Stikine's field crews have successfully advanced work on the Nonda Project during the summer months. Field work has focused on potential development concepts and baseline studies for the project area, with an eye to developing a detailed project description by the Fall of 2010. Various components of the baseline work that have been undertaken or completed are described below:

Pilot-scale Sampling and Pilot Plant Process Testing

Field crews successfully sampled approximately 500 tonnes of quartz-pure arenite rocks from the Nonda project and currently have the material stockpiled near the Alaska Highway prior to shipping to the pilot plant. Sepro Mineral Systems Corp. of Langley, B.C. has been engaged to provide a complete pilot-scale processing plant. The plant is currently under construction and will be commissioned in early October 2010.

The pilot plant will comprise various process components assembled to emulate the Company's successful lab-scale flowsheet optimization. That optimization work resulted in the production of high-quality frac sand produced from Nonda rock samples. Stikine's pilot plant is designed to operate at approximately two tonnes per hour and will primarily produce 40/70-mesh and 100-mesh products, similar to those currently being imported great distances to the Horn River Basin shale gas fields. An independent qualified person will supervise operations of the plant and the results will help to define operating parameters and yields, as well as providing estimates of capital and operating costs for the process.

Infrastructure Planning

Conceptual planning of potential access roads to the site has been completed and ground-proofed by field reconnaissance crews. An eastern route, which connects the project area more directly to the HRB is approximately 130km long, 75% of which is aligned along existing roads and other disturbances. The alignment would require a bridge crossing or some other conveyance at the Liard River. A preliminary field reconnaissance and assessment of potential bridge crossings has also been completed. This access may also be of great benefit to HRB producers who may wish to extend their exploration efforts to the west, potentially expanding the size of the basin towards Nonda project.

An initial review of power options suggests that connection to established power grids is not an option for the project, however opportunities to develop power with gas turbines, using gas supply from existing nearby pipelines is a compelling option for the project from both a capital and operating cost perspective.

Archaeology

Preliminary field reconnaissance studies, focused on archaeology and potential cultural sites, has been completed for Nonda Ghost Ridge, the potential access routes and potential bridge crossings. The Company is currently awaiting a permit to conduct an Archaeological Impact Assessment at specific sites in mid-September, 2010.

Baseline Environmental

Fieldwork to support environmental baseline studies has focused on the identification and presence of wildlife species including northern caribou, grizzly bear, wolverine, and wood bison. Crews have also developed preliminary lists for other mammals, birds, amphibians, fish, reptiles, plant and plant communities. Northern caribou has been identified as a key species of concern and the project team is in consultation with local caribou experts, including wildlife specialists, government biologists and local guide-outfitters.

A vegetation ecosystem classification for the site has been developed and crews are completing vegetation sample plots to define the vegetation zones. Ongoing monthly water sampling of streams around Nonda Ghost Ridge area have been taken to determine baseline quality. Fisheries assessment of streams around Nonda Ghost Ridge, as well as sampling for benthics and periphytes is underway for the baseline project description.

Project Description and Environmental Assessment Process

The Company intends to submit a Project Description to the BC Environmental Assessment Office this fall to determine the scope and process for review. Typically this triggers a draft Terms of Reference and a consultation period where the Company will present its development concepts to first nations and local communities.

Stikine is focused on becoming a dominant frac sand supplier to British Columbia's developing gas industry. The Horn River, Liard and Montney Basins are dominated by major gas producers who currently rely on frac sand transported over great distances. Stikine's Nonda project is located in close proximity to the Horn River and Liard Basins and the Angus project lies in close proximity to the Montney Basin and existing infrastructure.

Scott Broughton, P.Eng. is the qualified person as defined by national instrument 43-101 responsible for the preparation of this news release.

    
                             STIKINE ENERGY CORP.

                              "Scott Broughton"

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                 Scott Broughton, P.Eng. - President and CEO
    

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