VANCOUVER, Jan. 9, 2012 /CNW/ – Stikine Energy Corp. (TSX.V: SKY) (“Stikine” or the “Company”) announces it has received crush test results for samples submitted in December 2011 and has also completed a detailed review of all laboratory test results received. The results and review demonstrate that the pilot plant and bench scale tests for Angus and Nonda materials have achieved the recommended specifications for API/ISO crush tests within the range of observed variability at individual labs and between separate laboratories.

API/ISO Proppant Testing Crush Results
The following tables summarize selected crush test results to date from samples processed at the pilot plant and from bench-scale tests.

Table 1. Selected Crush Test Results for Pilot Plant Process Trials

Nonda material produces a majority of -40+70 and -70+140 sand with much smaller quantities of -20+40; as a result, there has been little focus on sampling and testing that product at the pilot plant to date.

Table 2. Selected Crush Test Results for Bench-Scale Process Trials

Review of Laboratory Testing Data
Process trials at the pilot plant in 2011 have taken place over a long period and were sometimes complicated by the delays in delivery and assembly of equipment during the year. While various efforts were undertaken to consistently improve sand quality at the pilot plant it was assumed that the accuracy of crush test results from independent laboratories would be consistent over that time. In December 2011, the Company retested various samples and also submitted some duplicate samples to an alternate facility. This was done in an attempt to reconcile the variability observed in some of the results from different pilot plant trials.

The API/ISO crush test is intended to emulate stress conditions in a well and simply compares the fines content after a small sample is subject to 4,000 psi (-20+40 sands) and 5,000 psi (-40+70 and -70+140). Repeatability and reliability of the testing procedure has been a topical debate in the industry for over 10 years. Testing facilities describe the test as having “inherent variability” due to the way samples are loaded, changes to equipment and even cyclical seasonal changes. After reviewing Angus and Nonda test results, and results for ‘standards’ used by laboratories for calibration testing, it is clear that crush test results can vary considerably for the same sample; as a result, it is the Company’s view that the test is only accurate to an estimated +/- 15% of the value reported.

Conclusion
Stikine’s process work has included ongoing pilot plant trials and bench-scale trials to evaluate methods of liberating sand grains and separation into commercial frac sand sizes. Based on test work completed to date, with a special focus on crush testing, it is apparent that both Angus and Nonda materials can yield frac-quality sand in sizes used in the Montney and Horn River Basins that are comparable in strength to other sands available in North America. This has been demonstrated at the pilot plant in all material sizes tested based on the described accuracy of the test.

Readers should note that further pilot plant process trials are planned that will continue to fine-tune performance and evaluate a variety of flowsheet modifications. In that sense the pilot plant is a large-scale experiment and its purpose is not simply to evaluate a single operating scenario. Typically in the mining industry, pilot plants are constructed for feasibility-level engineering studies and costing. While Stikine’s 2011 pilot plant trials have required more time and effort than originally estimated, the results of that work, including the experience gained in using bulk samples of Angus and Nonda material, will ultimately deliver a real advantage and help to expedite the next steps of both projects.

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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