Sprott Resource Corp. Announces Reserves Update and Commences Strategic Review for its Subsidiary Waseca Energy Inc.

Toronto, October 18, 2011 � Sprott Resource Corp.. (TSX: SCP) � Sprott Resource Corp. (�SRC�) today announced a reserve update for its 81% (basic interest) owned subsidiary Waseca Energy Inc. (�Waseca� or the �Company�) and the commencement of a process to review strategic alternatives available to the Company.

�Waseca has demonstrated exceptional success to date,� said Michael WatsonP.Geol, President and CEO of Waseca.  �Since inception 3 years ago, we have grown production organically to approximately 3,000 barrels per day (�bbl/d�) and accumulated a significant inventory of 100% working interest oil resource opportunities in the Lloydminster region.  We are in a strong position to consider our future options.�

�The team at Waseca has performed very well this year, growing production from 1,050 bbl/d at year-end 2010 to 3,000 bbl/d today and increasing the net present value of its oil and gas properties from $108.9 million at year-end 2010 to $333.9 million as at September 30, 2011 (total proved plus probable 10% pre-tax),� said Kevin Bambrough, President & CEO of SRC.  �This is significant value creation for SRC shareholders.�

Reserves Update

Waseca commissioned McDaniel & Associates Consultants Ltd. (�McDaniel�) to complete an independent reserves assessment (the �McDaniel Assessment�) of Waseca�s Cold Flow Heavy Oil assets (�Cold Flow�) and its Golden Lake SAGD Project (�Golden Lake�), both as of September 30, 2011.The McDaniel Assessment is dated October 17, 2011 and was prepared using McDaniel Forecast Pricing as of October 1, 2011.

Cold Flow Reserves

Pursuant to the McDaniel Assessment, Waseca�s Cold Flow gross interest reserves as of September 30, 2011 were 4.4 million boe of proved reserves and 7.7 million boe of proved plus probable reserves. These represent increases from December 31, 2010 of 2.1 million boe in the Cold Flow gross interest proved reserves and 3.0 million boe in the Cold Flow gross interest proved plus probable reserves. The increases were primarily due to an active 2011 drilling program (62 wells) and continued delineation of Waseca�s Cold Flow acreage. 

The Cold Flow reserves were evaluated in accordance with National Instrument 51-101 � Standards of Disclosure for Oil and Gas Activities (�NI 51-101�). The following tables summarize Waseca�s Cold Flow reserves on a gross interest basis (before deducting royalties and excluding any reserves attributable to royalty revenue interests).

Summary of Cold Flow Reserves (Forecast Prices and Costs)

Net Present Value of Future Net Revenue of Cold Flow Reserves

Golden LakeReserves

Pursuant to the McDaniel Assessment, Waseca�s GoldenLake gross interest reserves as of September 30, 2011 were 16.6 million boe of proved plus probable reserves and 19.3 million boe of proved plus probable plus possible reserves.

The GoldenLake reserves were evaluated in accordance with NI 51-101. The following tables summarize Waseca�s GoldenLake reserves on a gross interest basis (before deducting royalties and excluding any reserves attributable to royalty revenue interests).

Summary of Golden LakeReserves (Forecast Prices and Costs)

Net Present Value of Future Net Revenue of Golden LakeReserves

Strategic Review Process

The Board of Directors of Waseca has today initiated a process to identify, examine and consider a range of strategic alternatives available to the Company, with a view to maximizing shareholder value. This process could result in a sale of Waseca, a sale of a material portion of the Waseca's assets, or a corporate reorganization among other alternatives. There are no guarantees that the process will result in a transaction or, if a transaction is entered into, as to its terms or timing. Waseca has retained the services of RBC Rundle, a division of RBC Capital Markets to assist with this process.

Parties interested in further information regarding the strategic review process are advised to contact Mark McMurray or Darrell Law at RBC Capital Markets.

Mark McMurray

Tel: 403 (299)-8447

E-mail: mark.mcmurray@rbccm.com

Darrell Law

Tel: 403 (299)-6984

E-mail: darrell.law@rbccm.com

About Waseca Energy Inc.

Founded in 2008, Waseca is a privately-owned company with approximately 47,000 net acres and 3,000 boe/d of cold flow heavy oil production in Lloydminster area of Saskatchewan. Waseca also holds a 100% working interest in the Golden Lake SAGD project. Waseca is majority owned by Sprott Resource Corp.

About Sprott Resource Corp.

SRC is a Canadian-based company, the primary purpose of which is to invest and operate in natural resources..  Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. SRC is well positioned to draw upon the considerable experience and expertise of both its Board of Directors and Sprott Consulting Limited Partnership (SCLP), of which Sprott Inc. is the sole limited partner.  Pursuant to a management services agreement between SCLP and SRC, SCLP provides day-to-day business management for SRC as well as other management and administrative services.  SRC invests and operates through Sprott Resource Partnership (SRP), a partnership between SRC and Sprott Resource Consulting Limited Partnership, an affiliate of SCLP which is the managing partner of SRP.

Information Regarding Disclosure on Oil and Gas Reserves and Information

BOEs may be misleading, particularly if used in isolation.  A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Possible reserves are those reserves that are less certain to be recovered than probable reserves.  There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

The future net revenue estimates in this news release do not represent fair market value.

Advisory Regarding Forward Looking Information

This news release includes forward-looking information relating to Waseca�s reserves and the potential results of the strategic review process relating to Waseca. Forward-looking information looks into the future and provides an opinion as the effect of certain events and trends on the business of SRC and Waseca and, more specifically, forward-looking information relating to �reserves� is deemed to be forward-looking information, as such information involves the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. The forward-looking information contained in this news release is based on current expectations and various estimates, factors and assumptions including, among others: the range of possible strategic alternatives available to Waseca; historical production in the areas in which the Cold Flow and Golden Lake reserves are located compared with production rates from similar producing areas; future commodity prices, production and development costs, royalties and capital expenditures; initial production rates; production decline rates; ultimate recovery of reserves; success of future exploitation activities; marketability of production; effects of government regulation; and other government levies that may be imposed over the producing life of reserves.

All forward-looking information is inherently uncertain and subject to a variety of risks, uncertainties and other factors that may cause SRC's and Waseca�s actual results, performance or achievements to be materially different from those expressed or implied from such information, including: general economic, market and business conditions; fluctuation in market prices for petroleum and natural gas; fluctuations in foreign exchange rates; changes in laws and regulations; geological, technical, drilling and processing problems and other difficulties in producing petroleum and natural gas reserves; uncertainties associated with estimating petroleum and natural gas reserves; and risks associated with oil and gas operations generally.

SRC has attempted to identify important factors that could cause its and Waseca�s actual results, performance and achievements to differ materially from those contained in the forward-looking information contained in this news release. However, there can be other factors that cause results, performance and achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. Accordingly, readers should not place undue reliance on the forward-looking information contained in this news release. SRC does not intend, and does not assume any obligation, to update these forward-looking information contained in this news release except as required by law.

For further information please contact:

Stephen Yuzpe

Chief Financial Officer

Sprott Resource Corp.

200 Bay Street, Suite 2750

Toronto, Ontario

M5J 2J2

Tel: (416) 977-7333

Fax: (416) 977-9555