TORONTO (miningweekly.com) – Uranium explorer Strateco Resources is claiming C$190-million from the Quebec government in a motion it filed with the Superior Court of Quebec on Thursday to institute proceedings.

Boucherville, Quebec-based Strateco was seeking damages for the loss of its mothballed flagship Matoush project, in the province’s Otish Mountains,  which arose from the alleged wrongful actions by the provincial government and its Ministers.

Strateco stated that it had invested an average of $20-million a year in the Matoush project between 2006 and 2012, and took for granted that the provincial government would comply with its own laws.

The spurned explorer charged that uranium exploration and mining were allowed in Quebec, both under the old Mining Act and under the new Mining Act that came into effect in December last year. The government had granted Strateco some 30 permits under its laws, regulations and guidelines, in the full knowledge that the activities in question were linked to uranium exploration and a planned uranium mining operation, Strateco said.

The company explained that in constructing a legislative framework that allowed uranium exploration and mining, the government sent Strateco positive signals on the Matoush project, among other things by including it among the 11 mining projects of the Northern Plan it announced in May 2011. Government officials, including the former Premiers Pauline Marois and Jean Charest, used the Matoush project several times to showcase Quebec's uranium potential.

Things took a turn for the worse on November 7, 2013, when Quebec Sustainable Development, Environment, Wildlife and Parks Minister Yves-François Blanchet had refused to grant Strateco the certificate of authorisation it needed to start the advanced underground exploration phase of the Matoush project, alleging a lack of social acceptability of a certain group.

Yet, Strateco noted that, the government never explained what it meant by "lack of social acceptability", a concept not defined in any Quebec law or regulation.

Almost a year later, on November 18, the government announced, through its Minister of Energy and Natural Resources and Minister responsible for the Northern Plan, that it would try to define the concept of "social acceptability".

Located near the Cree community of Mistissini on Cree family hunting lands, the Matoush project was the most advanced uranium project to date in the Cree territory of Eeyou Istchee and in Quebec, but the First Nation had declared a moratorium on any uranium development on its reserve lands, prompting the provincial government to also implement a moratorium on uranium project permits pending the outcome of public consultations.

Strateco pointed out that based on extremely detailed, rigorous environmental- and social-impact studies, Strateco received approvals for the underground exploration phase of the Matoush project from the Canadian Nuclear Safety Commission, the federal Minister of the Environment and the federal administrator of the James Bay and Northern Quebec Agreement, as well as a positive recommendation from the provincial evaluation committee, COMEX.

In its lawsuit, Strateco criticised the provincial government for, among other things, having encouraged it to invest in Quebec and then suddenly changing course by announcing a moratorium on uranium exploration and mining in March 2013, and finally wrongfully and arbitrarily refusing to authorise the advanced exploration of the Matoush project.

“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, and lost any real opportunity to benefit from its mineral claims and its investment in the Matoush project," the company said in a statement.

According to the Fraser Institute, Quebec was the most attractive jurisdiction in the world for mining investment from 2007 to 2010, but it had slipped to eleventh place in 2012 and then to twenty-first place in 2013.

Strateco said in its opinion, Minister Blanchet's wrongful and arbitrary decision not only caused serious damage to Strateco itself, it also had a strongly negative impact on Quebec's mining industry. “The industry's development is heavily dependent on the ability to obtain financing from international investors whose confidence in the security of their investment has been undermined."

The Matoush project had been on standby for about two years and Strateco had already finalised the sale of some of its facilities and equipment at the Matoush camp.