Stikine - Initial Process Testwork Yields Positive Results for Nonda
Quartzite

SKY:TSX.V

VANCOUVER, Jan. 13 /CNW/ - Stikine Gold Corporation (SKY:TSX.V) ("Stikine" or the "Company") announces that it has received positive results from its process evaluation testwork, including an ISO/API proppant testing report conducted on processed sand produced from samples taken at its 100% held Nonda Frac Sand Project.

Stikine's process evaluation testwork to produce various frac-sand products has been ongoing since October 2009. Dozens of early tests resulted in the production of small quantities of sand that were assessed visually by the Company and led to refinements in process methods. By December 2009, a sufficient quantity of sand was produced to send for proppant testing by Stim-Lab of Oklahoma (a Core Laboratories Company specializing in proppant testing).

The results of Stikine's process evaluation testwork successfully demonstrates that processed sand can be readily produced from Nonda quartzite utilizing a high-yield, low-cost process option. The Company continues to conduct process evaluation and will be submitting further processed sand samples for proppant testing over the coming months.

Background

Lab-scale process evaluation testwork is necessarily a time-consuming and iterative procedure requiring the use of small-scale process equipment and the assessment of many variables to observe results. Prior to the baseline Stim-Lab results presented below, the Company had assessed liberation and roundness results by visual qualitative assessment only. Early processing options that were assessed included simple crushing, grinding and tumbling to produce liberated silica grains. However, the combination of extremely hard quartzite rock and the small size of the lab-scale process equipment created a narrow window of opportunity to properly assess grinding options without over-working the individual grains.

Over-working the quartzite has been observed to damage individual grains by causing micro-fractures and crushing. This results from excess energy exerted by the lab-sized equipment when trying to breakdown the hard rock. Visual assessment of early process results using grinding mills demonstrated the equipment's sensitivity and inherent difficulty in limiting excess grain damage while trying to achieve maximum liberation with lab-scale mills. This is a common challenge in the metallurgical testing industry when evaluating process options at a lab-scale, especially with hard rocks. However, the evaluation testwork led to consideration of a wide variety of process equipment, not all of which is readily available at a lab-scale.

By mid-December 2009 the Company was able to obtain a scrubber device under rental agreement for evaluation. Scrubbers work by particle-on-particle shear forces in a slurry, and not directly through more destructive hardened metal contacts that occur in a grinding mill. The Nonda quartzite process evaluation work showed that the scrubber results produced excellent liberation, minimized grain damage and produced higher yields when visually compared with previous methods.

While the lab-scale equipment used in this method is also small, scrubbing provided average yields (or recoveries) of approximately 65% with demonstrable liberation of grains and improvement to particle shape. Further testing at a variety of densities and durations were also carried out resulting in the baseline sample being sent to Stim-Lab and the results summarized below.

Baseline Proppant Results

Two recently processed Nonda sand fractions (40/70 and 70/120) commonly used in the Horn River Basin were sent to Stim-Lab in December of 2009. The results indicate that excellent liberation and required grain sphericity was achieved relative to the recommended ISO /API procedure.

    
    Stim-Lab conducted the following ISO 13503-2/API RP19c analyses and
    measurements;
    -------------------------------------------------------------------------
    Test               Sample: -40+70               Sample: -70+120
    -------------------------------------------------------------------------
    Section 6: Sieve
     Analysis          59.0% reports as 40/70       95.5 reports as 70/120
    -------------------------------------------------------------------------
    Section 7:
     Sphericity and    0.7 and 0.5 (recommended     0.7 and 0.5 (recommended
     Roundness         greater than 0.6) Approx     greater than 0.6)
     Clusters          1 per 100 grains             None observed
    -------------------------------------------------------------------------
    Section 8: Acid    1.8% (recommended max        1.9% (recommended max
     Solubility        equals 3.0%)                 equals 3.0%)
    -------------------------------------------------------------------------
    Section 9:         9 (recommended max           14 (recommended max
     Turbidity test    equals 250 FTU)              equals 250 FTU)
    -------------------------------------------------------------------------
    Section 10: Bulk   1.23 g/cm(3),                1.24 g/cm(3),
     Density and S.G   2.62 g/cm(3)                 2.64 g/cm(3)
    -------------------------------------------------------------------------
    Section 11:
     Proppant Crush    12.3% (suggested max         11.7% (suggested max
     test              equals 8%)                   equals 6%)
    -------------------------------------------------------------------------
    

All basic API/ISO measurements and tests were achieved for the two size fractions with the exception of Section 7: Roundness and Section 11: Proppant Crush Test. Future scrubber trials will focus on improving roundness of the overall samples. Both the 40/70 and 70/120 fractions exceeded the suggested maximum fines resulting from the crush tests. This result is believed to be substantially due to an excess of fines in the original sample and an excess of unsorted particle shapes remaining in the sample. The Company believes these values will be significantly reduced after a cleaning process, a step that was not carried out for the baseline sample material.

The scrubber demonstrated that no grinding is required to achieve particle liberation and that beneficial shaping can also result in this process option. The combined results of the first phase of tests are positive and show that the Company is on the threshold of defining a process for making commercial frac sand products from Nonda quartzite.

Having achieved this result, Stikine is moving quickly to evaluate the use of larger scrubbers with additional focus on final cleaning and sorting. Testwork at a new facility will commence as soon as possible using larger scrubbers to produce higher volumes of processed sand. New samples will be further cleaned and classified prior to proppant testing. Larger sample production will allow the Company to distribute individual sample specimens to potential customers, clients and well-completion service companies in the Horn River Basin. Planning is ongoing for a larger bulk sample(s) and ultimately planning feasibility-level process studies to define costs for the project.

The Nonda Frac Sand Project is located in north eastern British Columbia (NEBC) and lies approximately 150 km west of the Horn River Gas Basin. Stikine is evaluating the potential to supply high-quality processed frac sand to the unconventional gas market in NEBC.

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"

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

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

SOURCE Stikine Energy Corp.

For further information: For further information: Investor Relations, Tel: (604) 684-1900, Fax: (604) 684-2902, Email: info@stikinegold.com, Web: www.stikinegold.com

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