Overview

Stratex International is an exploration and development (E&D) company focusing on gold and other high-value base metals. The company objective is to be a leading-edge and innovative explorer whilst creating revenue from gold and base metal production via well-managed joint-ventures. The company has discovered a number of gold targets in Turkey including the new mineralized Konya Volcanic Belt, which hosts the Inlice and Doganbey projects. A futher three discoveries have been confirmed by drilling and a number of new projects are in the pipeline. To date the focus of the Company's activities has been Turkey, where the Company perceives there is considerable further exploration potential. The Company is, however, constantly reviewing additional opportunities elsewhere in the world.

History

Formed in 2004, the company has been positioned to take advantage of the current paucity of exploration activities and the resultant projected shortage in supply of precious and base metals. Since formation Stratex has rapidly amassed a portfolio of high-potential exploration licences in central and western Turkey. This portfolio underpinned a successful listing on AIM on 4th January 2006 and has since been added to as a result of the Company's informed and aggressive approach to terrain analysis and prospect identification.

Strategy overview

The strategic intent is to maximize shareholder value through the continuing development of this focused portfolio. Revenues will be generated by:-

• Developing a defined resource into a mine in collaboration with Teck Cominco Ltd - should Teck Cominco decide to exercise its option to earn into the project. Under these circumstances Teck Cominco would manage the mine-development process and subsequent exploitation; or
• Entering into a production joint-venture agreement with a mid-tier mining company that would have the technical and financial capabilities to put the resource into production; or
• Selling the resource to a third-party company whilst retaining a royalty payment based on future metal production.

Joint venture

Stratex has a joint venture operating agreement with Teck Cominco whereby:-

• Potential projects are evaluated by a joint advisory board before adoption, thus enabling Stratex to access specific expertise, knowledge and industry contacts within Teck Cominco.
• Teck Cominco have the option to buy back into four Stratex exploration projects and jointly share the resultant revenue streams

Operations

Stratex has a UK-based Board of Directors, including Chairman, CEO, CFO and two non- executive directors, with a head office in London. The Turkish operations are managed from offices in Ankara and include the country manager plus a team of geologists. Additional specialist exploration resources are provided through variable outsourcing contracts in order to minimise overheads.

Turkey

Turkey is situated within the Tethyan Eurasian Metallogenic Belt (TEMB) which forms part of the Alpine-Himalayan orogenic system. The major mineral endowment of Turkey is located centrally, to the west, and to the north; regions in which a number of volcanic-associated gold and gold-copper deposits have been discovered during the past decade.

Turkey has a history of mining that extends back to gold and copper mining in pre-Roman times and has been actively engaged in base metal mining during the past century. The Directors believe that recent changes in mining and investment law in Turkey have created a positive environment for exploration and mining. Discoveries by other companies in central and western Turkey in recent years include Eldorado Gold's Kisladag gold deposit (7.78 million ounce resource, measured and indicated) and Anatolia Mineral's Cöpler gold deposit (1.99 million ounce resource, measured and indicated) and a number of other smaller discoveries. Kisladag commenced commercial production in July 2006 while Anatolia is hoping to take Cöpler into production late 2008.

Projects

The current project portfolio is focused on gold targets in Turkey and covers eleven licence blocks totalling approximately 1,724 km2:-

• Oksüt: A new 75.51 km2 licence area with key licence acquired in late March 2008. Gold mineralization hosted in Miocene volcanics, similar to the Konya Volcanic Belt. Highest chip sample assay of 1.6 g/t Au. Additional sampling underway with a view to fast-tracking a reconnaissance drilling programme.
• Konya:  Multiple porphyry gold targets (including Doganbey) within the Konya Volcanic Belt. Geological mapping and geophysical surveys indicated a number of potentially large systems. At Doganbey, initial drilling has indicated gold grades of approximately 0.1 g/t Au, with best intersection of 274 m @ 0.13 g/t Au. Further drilling of Doganbey has recently been completed and two futher porphyry prospects, identified by ongoing exploration, are to be drilled.
• Altıntepe: A multi-occurrence prospect comprising a number of discrete gold-bearing zones. A declared in-house oxide resource of 472,318 oz gold. The prospect is now the focus of both further resource drilling and exploration drilling.
• Inlice: A high-sulphidation gold discovery in a previously unexplored area – the Konya Volcanic Belt. Current resource in the Ana Zone totals 6,751,595 t @ 1.72 g/t gold realising 372,971 oz gold
• Karaagaç:  A partially exposed, gently dipping gold-bearing zone, extending over an area of approximately 3.5 km2. Drilling has identified a resource of approximately 6,389,011 t @ 0.78 g/t gold for a total of 156,798 oz gold. A joint venture partner is being sought to extend the resource and undertake feasibility studies, with a view to mid-term production.   

Stratex also has a strong pipeline of early-stage projects that are being investigated:

• Hasançelebi: Newly discovered high-sulphidation gold system hosted within Miocene andesitic and dacitic rocks. Silica rock samples from early exploration work returned values up to 0.9 g/t Au over 4 m. Further exploration is underway and drilling is anticipated Q3/Q4 2008.
• Altunhisar and Karapinar: Two new areas of volcanic rocks similar to Konya within which multiple occurrences of Konya-type alteration have already been identified. Drilling of priority targets at Altunhisar is anticipated during Q3/Q4 2008.
• Muratdere: A porphyry gold-copper-molybdenum occurrence that is exposed over an area of approximately 4,000 m x 5,00 m. Encouraging results from early drilling returned a best intersection to date of 284.7 metres grading 0.30 % copper, 0.13 g/t Au, and 0.013 % Mo..

 

Plans

Stratex has rapidly developed a portfolio of high-priority prospects in Turkey that require drilling to evaluate the resource potential. In total the company holds six groups of exploration licences, four outcropping mineral occurrences and one possible new gold district. Drilling is complete at Inlice, Karaağaç and Muratdere, and is underway at Altintepe and Doganbey. Drilling is also anticipated mid to late 2008, on further four projects - Oksüt, Karacaören, Hasançelebi and Altunhisar.

Key elements of the Company's exploration programme over the next twelve months include:

• Resource drilling at Altintepe
• Exploration drilling of priority targets at Doganbey, Hasançelebi and Altunhisar.
• Fast-tracked exploration leading to drilling of new targets - Oksüt, Karacaören
• Acquisition of new prospects in Miocene and older terrains

People

Stratex recognizes that its single key strength is its personnel. This starts with its team of young and very able geologists based in Turkey and directed by General Manager Bahri Yildaz. Bahri has unsurpassed knowledge of the geology and mineral deposits of Turkey and a superb track record of mineral deposit discoveries over the past 25 years. The senior executive is led by Chairman David Hall and CEO Bob Foster, who between them have over 60 years of exploration and development experience around the world. Supporting the Board is CFO Perry Ashwood and Non-Executive Directors Christopher Hall and Peter Addison.

Summary

In summary the key attributes and strengths of the company are:-

• Strategic alliance with Teck ComincoLimited
• Valuable and continually evolving portfolio of projects with identified resources and considerable exploration potential
• Highly experienced management team supported by top-level financial and commercial colleagues at Board level
• Highly effective operating model with a low cost base