Stikine - Nonda Sand Passes Frac Quality Tests

TSX-V:SKY

VANCOUVER, April 27 /CNW/ - Stikine Gold Corporation (TSX-V:SKY) ("Stikine" or the "Company") has received definitive test results for its frac sand processed from the Nonda - Ghost Ridge Project. The property is 100% owned by Stikine and is located 150 km west of the Horn River Basin ("HRB") shale gas field in northeast British Columbia.

Stikine previously announced that its initial/baseline trials had achieved successful liberation of strong quartz sand grains from Nonda rocks. The Company has also demonstrated good yields of Nonda sand that meets or exceeds most suggested parameters for frac sand, and did so utilizing only lab-scale equipment. Recent test results also demonstrate that a simple cleanup stage can readily remove weak/off-shaped grains to produce a frac-quality sand from Nonda rocks.

Nonda - Ghost Ridge Project

The discovery in mid-2009 of the Nonda - Ghost Ridge property was an important milestone for the Company. This massive occurrence of quartz-pure sandstone (or quartz arenite) is unique in the region. Strong, sand-size monocrystalline grains are tightly packed and cemented by thin rinds of silica in the rock mass. The unit is slightly metamorphosed but importantly, the grains remain stronger than the cementing silica between them and they break preferentially around grain boundaries, rather than across grains.

Stikine's Nonda - Ghost Ridge Project hosts an 11.5 km by 2 km outcrop of continuous quartz arenite with sand grains that are essentially in-size for the sand fractions used in the HRB, predominantly in the 40/70 and 100 mesh sizes. In September and October 2009 the Company completed nine diamond-drill holes over a 2.2 km by 900 m area and tested thicknesses of up to 168 m.

The combination of size, quality, gradation and ease of liberation make the Nonda - Ghost Ridge Project an excellent potential source of frac sand for the HRB. Proximity to the basin means that transport costs to well sites will be significantly less than that for current frac sand supply, being transported from Manitoba, Saskatchewan, Wisconsin, Texas and other places. Transportation costs for existing supplies are estimated to be up to 80% of the delivered cost of the sand. The estimated value of imported sand in the HRB is currently $250/tonne (2010), representing up to 15% of total well completion costs, and roughly 300,000 tonnes is planned for operations in 2010.

Proppant Testing Background

API/ISO frac sand testing includes a variety of physical and chemical tests to establish the quality and suitability of sand materials for hydro-fracturing applications. As previously reported, baseline samples of Nonda's processed sand were tested and have passed all suggested specs other than the crush test. Excess fines generated under high stress could impact permeability and conductivity of the proppant used in the shale gas hydro-fracturing industry.

API/ISO Test Results to Date

Over the past three months, lab-scale processed Nonda - Ghost Ridge samples have been submitted to Stim-Lab (a Core Laboratories Company specializing in proppant testing) and tested specifically for crush resistance. These samples were processed using the same liberation techniques as the baseline samples, with a greater focus on removing weak and off-shaped particles. All other attributes of the finished sand are similar to the baseline sample result from Stim-lab (see Stikine news January 13, 2010).

Stikine's lab-scale work to date clearly demonstrates that iterative refinements to the processing of the Nonda rock samples can produce frac-quality sand.

Stim-Lab results: ISO 13503-2/API RP19c , Section 11 "Proppant Crush Test" results;

    
    -------------------------------------------------------------------------
                                -20+40          -40+70          -70+120
                            (suggested max  (suggested max   (suggested max
    Sample Number/Date         equals 8%)      equals 8%)       equals 6%)
    -------------------------------------------------------------------------
    Baseline/20-JAN-10                           12.3%            11.7%
    -------------------------------------------------------------------------
    12-MAR-10                                    11.9%            10.2%
    -------------------------------------------------------------------------
    22-MAR-10                    6.5%
    -------------------------------------------------------------------------
    23-APR-10                                     8.0%             6.4%
    -------------------------------------------------------------------------
    

Summary

The original discovery of the Nonda's quartz-pure sandstone and the rapid development of a lab-scale process flowsheet is an historic achievement in the frac sand mining industry. The Company anticipates the potential development of an operation that could deliver the frac sand needs to British Columbia's burgeoning shale gas plays from a local BC source, thereby eliminating the need to transport this critical material over great distances from other jurisdictions.

The potential size and value of the HRB frac sand market is significant but is dependent on the success of the current exploration and development of the basin. Lower cost and closer by, Nonda - Ghost Ridge sand could help to make the HRB competitive against other shale-gas basins also being explored in North America.

Planning is underway for a larger sample to be obtained from the Nonda - Ghost Ridge project and to deliver that sample to a pilot plant-scale test in the summer of 2010. This work will help to define operating parameters, yield and capital/operating costs for the project. Permits are in place to obtain this sample in May and June of 2010.

Scott Broughton, P.Eng., is the qualified person responsible for the preparation of this news release under National Instrument 43-101.

    
                           STIKINE GOLD CORPORATION

                              "Scott Broughton"
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                 Scott Broughton, P.Eng. - President and CEO
    

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For further information: Investor Relations, Tel: [phone], Fax: [phone], Email: [email protected], Web: www.stikinegold.com