Stikine Energy Corp. : Frac Sand Pilot Plant Update

Vancouver, British Columbia: Stikine Energy Corp. (TSX.V: SKY) ("Stikine" or the "Company") announces the following update of its pilot plant operations located in Abbotsford, British Columbia.

Recent process testwork at the pilot plant shows that the new attrition scrubbers installed and modified in late August provide marginal performance improvements over the original units. A decision was made in May 2011 to install the new units and to reconfigure the plant design. Much effort and time has been spent trying to optimize the pilot plant for those new scrubbers and Management has come to the conclusion that the equipment is unlikely to perform the way it was originally planned.

Based on discussions with the manufacturer and Stikine's consultants, Sepro Mineral Systems Corp. ("Sepro") it was concluded the challenges in achieving steady state performance from the new attrition scrubbers is entirely related to the equipment itself, and not the material being processed. This assessment is based on numerous bench-scale tests showing positive results based on API/ISO testing for proppants.

As stated in previous news, the process flowsheet is a simple and innovative arrangement of equipment that is off-the-shelf and available from a variety of manufacturers at larger production sizes. However, the assembly of the various components at a pilot-scale is new to the industry and presents unique fabrication and commissioning challenges.

As a result of these recent observations, Sepro has recommended the installation of a production-sized scrubber at the pilot plant. This will facilitate a test of an off-the-shelf unit known to perform based on its operation at a number of frac sand plants in North America. The production-size scrubber and ancillary equipment will be supplied at no cost to the Company for this trial. Testing should commence again in mid-October, 2011 once all of the components are delivered and installed to the plant.

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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