TORONTO (miningweekly.com) – Quebec-based Strateco Resources on Monday said it had started a series of legal actions against the province’s environmental agency to assert its uranium exploration rights.

Strateco, which owns and was developing the Matoush uranium project located within a First Nation reserve, said following the moratorium on the issuance of permits for uranium projects announced late in March by the Minister of Sustainable Development, Environment, Wildlife and Parks (MDDEP) Yves-François Blanchet, it had served the MDDEP with a notice for damages and interest set at an initial amount of $16-million.

This sum represented the loss in the company's market capitalisation since the Minister’s announcement.

Strateco on Monday said it held Blanchet liable for damages caused by his “misconduct” up until this time, and that it had given instructions for legal proceedings to be instituted to obtain compensatory and punitive damages.

Strateco reserved all rights to any future claims in the event of undue delays, which were currently subject to continue and lead to irreparable losses for the Matoush project, and added that an additional amount would be added to the claim.

It would represent compensation for the loss of value of the project, the amount of which was yet to be determined, as well as the loss of $120-million invested so far.

Strateco also asked the Quebec Superior Court to issue a safeguard order. The company said it believed that the government has upset the balance between the parties. The impact is such that, without a rapid safeguard and recovery order, Strateco was unlikely to be able to maintain its Matoush facilities or cover the costs essential to the viability of this project until the court ruling.

“Considering the urgency of the situation, the balance of convenience, the fact that Strateco would experience serious and irreparable damages and the appearance of illegality of the government's position, Strateco requests that the court orders the government to pay a sum ranging from $420 000 up to $800 000 on the last day of each month beginning on May 31, and until September 30 at minimum,” the company said in a statement.

These amounts represented the shortfall between Strateco's available cash and sums required to cover basic costs to sustain the Matoush project.

Further, Strateco also amended its petition for mandamus, which, originally, asked the Quebec Superior Court to order the Minister to make a decision on the issuance of permits.

Strateco now asked that the court ordered the provincial government to issue permits for the project.

"We are of the opinion that the government's position is contrary to the provisions of the Environment Quality Act and that it is irreconcilable with the principles of good faith that must guide it. The government is taking part in an illegal decision," Strateco CEO Guy Hébert said.

The Minister's announcement followed ongoing legal proceedings aimed at forcing the provincial government to make a decision on the company’s flagship Matoush project, which is located east of James Bay on The James Bay Cree Nation’s Eeyou Istchee reserve.

Last year, after two years of public hearings, the James Bay Cree Nation enacted a permanent moratorium on uranium exploration, mining, milling and waste emplacement on their territory on the east shore of James Bay, known as Eeyou Istchee.

Despite this moratorium, federal regulators, including the Canadian Nuclear Safety Commission, allowed Strateco’s Matoush uranium project to proceed within this Cree territory. Nevertheless, before this project could proceed, provincial authorisation was also required, for which Strateco had already been waiting for two years.

The company in January filed a court order to force the Quebec government to make a decision on its exploration project in the province’s Otish Mountains.

In October, The Canadian Nuclear Safety Commission granted an exploration licence to Strateco Resources, allowing the company to do advanced exploration for uranium at the site.

The company in January said the Cree should not have the power to veto the project, and that it was up to the provincial government to make the final decision.

Strateco said it intended to look into the legality of the Minister's announcement,  given that the Superior Court had not yet had the opportunity to rule.

The price of the company’s TSX-listed stock had declined by 65% from the start of the year and on Monday traded 7.69% lower at C$0.06 apiece.