Quebec mining junior Strateco Resources Inc. is suing the provincial government for $190-million in investment losses following its decision to block the company's uranium project after years of preliminary work.
"This whole thing has left us extremely frustrated," Strateco chief executive Guy Hébert said Thursday, noting that he put two mines into production in Quebec within a nine-year period while this project has taken a decade and still isn't producing.
Strateco's Matoush uranium project in Northern Quebec was once hailed as a key part of former premier Jean Charest's Plan Nord, a multibillion-dollar effort to develop Quebec's north, pinned on natural resource extraction. Today, it sits undeveloped, highlighting the confusion that's come from Quebec City in recent years on mining activity.
Boucherville, Que.-based Strateco, once a $4 stock that now trades for pennies, said it invested an average of $20-million a year on the Matoush project from 2006 to 2012 on the basis that uranium exploration and mining are allowed in Quebec. The government granted the company some 30 permits to start work at the site, including permission to build an airstrip.
In March, 2013, the newly-elected Parti Québécois government imposed a moratorium on uranium exploration and mining in Quebec, pending an environmental review. Eight months later, Quebec's environment minister refused to grant Strateco the certificate of authorization it needed to begin the advanced exploration phase of the project. The minister cited a "lack of sufficient social acceptability" on the part of the local Cree community toward the planned uranium mine, located some 275 kilometres north of Chibougamau.
Matthew Coon Come, Grand Chief of the Grand Council of the Crees, has said Strateco has not properly responded to environmental questions. He said his community now believes the project should just be scrapped. "We don't need it."
Strateco counters that it has already received approvals for underground exploration work at Matoush from the Canadian Nuclear Safety Commission and the federal Environment Minister based on detailed environmental impact studies. The company contends that the Quebec environment minister and the provincial government never explained what was meant by a "lack of sufficient social acceptability," adding the concept is not defined in Quebec law.
In its lawsuit, the company criticizes the government for encouraging it to invest in Quebec and then changing course.
"Strateco was placed in a situation where it was no longer realistically able to interest investors in the Matoush project, was obliged to close the Matoush camp and cause permanent job losses," the company said in a statement. "[Strateco] lost any real opportunity to benefit from its mineral claims and its investment."
An estimate done in January, 2012, pegged the inferred resource at the Matoush site at 2.04 million tonnes with indicated resources at another 453,000 tonnes.