Latest News

Released 07:00 21-August-2014

Number 6776P

Stratex International Plc 

(“Stratex” or “the Company”) 

Interim Results

Stratex International Plc, the AIM-quoted exploration and development company focused on gold and base metals in Turkey, East Africa and West Africa, announces its unaudited interim results for the six-month period ended 30 June 2014.

Operational highlights

·         Construction is underway at the Altintepe gold project and first gold production is anticipated before the end of the year.

·         Further drilling at Dalafin, Senegal has returned positive results at Faré South prospect, where broad zones of gold mineralisation have already been identified and at Madina Bafé prospect where reverse circulation and diamond drilling have returned excellent results, including 9.6 m at 16.08 g/t Au.

·         Stratex and Thani Emirates Resources Holdings to combine their East African assets into a new company in which Stratex will own 40%. The new company will be the partners’ exclusive vehicle for growth in the Arabian Nubian Shield and Afar region in Ethiopia, Djibouti, and Egypt.

·         Stratex to invest £1.25 M in Goldstone Resources Limited, subject to regulatory and shareholder approval, for a 33.4% shareholder interest, potentially rising to 50.1% on exercise of matching warrants. Goldstone is an AIM-quoted gold exploration company, with assets in Ghana, including a JORC compliant resource of 600,000 oz gold, and exploration projects in Senegal and Gabon.

·         Further drilling of the Tembo gold project in Tanzania has returned encouraging intersections from the project’s extensive tenement close to African Barrick Gold’s 20 Moz Bulyanhulu Mine (current reserves and resources total 14 Moz Au).

Financial Overview

·         Operating loss for the first six months of £1,257,803 compared to an operating loss for the same period last year of £1,342,453. Pre-tax loss of £1,414,518 compared to a pre-tax profit for the same period last year of £733,668. The 2013 results benefitted from a gain of £2,479,996 on the sale of the Inlice project and the transfer of 55% stake of the Altıntepe Madencilik project to Bahar.

·         Cash balance of £7,398,483 at 30 June 2014.

Chairman’s Statement

Stratex has continued to make steady progress in the six months to 30 June 2014, exploring its own properties and expanding its interests. I am confident that the second half of the year will see more tangible results on a number of fronts.

In Turkey, the Altintepe gold project (45% owned by Stratex) continues to move towards production following the granting of the Forestry Permit. The terms of a fixed price construction contract and an agreement for contract mining between Altintepe Madencilik, the joint venture company, and Bahar Mining, our partners, are close to being finalised. Site clearance, upgrading the road access, installing a power line, foundation work and some pre-stripping have continued during negotiations. Our partners, who are fully funding the operation to production, remain confident that we will see gold production before the end of 2014.

At the Muratdere copper-gold porphyry project, our partners Lodos are close to completing a feasibility study which will see them earn to 70%. The first stage of development envisages two pits in the supergene enriched zone (15 Mt at 0.54% Cu and 0.1 g/t Au), which contains an indicated and inferred resource of 80,000 tonnes Cu. Depending on the results, Stratex will decide whether to contribute to the development costs, dilute to a royalty or consider a sale of its interest.

The two strategic exploration alliances with Centerra and Antofagasta remain active but results will remain confidential for the foreseeable future to ensure first-mover advantage is retained. Centerra also continues to work on the Öksüt project, where Stratex sold its 30% interest in 2012, and is currently indicating production in 2016 at which time Stratex would begin to receive its 1% royalty, capped at US$20 million.

A second round of drilling at the Megenta project in the Afar region of Ethiopia was undertaken and, although gold continued to be intersected in most holes, the hoped-for high grades were not intersected and the project was relinquished, consistent with our policy of dropping properties where we see the risk outweighing the potential reward. 

An MOU was signed with Thani Emirates Resource Holdings whereby Thani and Stratex would combine their interests in Ethiopia, Djibouti and Egypt into a new company. Stratex will contribute its 95% owned Blackrock licence and the 49% interest in Oklila, Djibouti where drilling is planned for later in the year. Thani will contribute its Hodine and Wadi Kareem concessions in Egypt, the former includes the Hutite discovery with a non-JORC resource of 520,000 oz gold, and the remaining 51% of Oklila. Each partner will contribute US$1.0 million for an initial 50% interest in the company and, after injection of the assets, Stratex’s share will be 40%. The aim is to raise additional third party funds and ultimately to list a new regional gold explorer and developer.

In Tanzania, our strategic investment in TSX-V listed Tembo Gold, where Stratex holds almost 13% with matching warrants, continued to return encouraging drill results particularly from the Nyakagwe Village and Nyakagwe East targets. The results are currently under review and next steps being planned.

Results from our now 85% owned Dalafin project in Senegal were announced in February, May and since the period end in July. A combination of reverse circulation and diamond drilling was completed on four key targets; Faré, Saroudia, Baytilaye and Madina Bafé. Follow up drilling at Faré South and Madina Bafé has been very encouraging with relatively shallow intersections including 96 m at 1.51 g/t Au and 9.6 m at 16.08 g/t Au, respectively. An IP survey was also completed at Faré South. Drilling has now been suspended for the rainy season, allowing the results to be properly interpreted in order to design the appropriate drilling programme once access to the sites is again feasible.

At the AGM in May, I indicated that Stratex was still searching for opportunities where its cash and expertise could be applied to accelerate the exploration process compared with grass roots work. Shortly after the end of the period we reached conditional agreement to acquire a 33.4% interest, with matching warrants which could see this holding increase to 50.1%, in Goldstone Resources, a Jersey-registered, AIM-quoted company. Subject to shareholder consent and approval by The Takeover Panel of a waiver of Rule 9 of the City Code on Takeovers and Mergers, Stratex will invest £1.25 million and appoint two directors to the board as well as nominating an additional non-executive director. Goldstone controls the Homase-Akrokerri gold project in Ghana, which is immediately adjacent to Anglogold Ashanti’s Obuasi mine, and currently has a resource of approximately 600,000 oz. We look forward to working with Goldstone management to develop an economic resource incorporating these and possibly other nearby deposits, as well as looking for other opportunities in Ghana. Goldstone also has the Sangola project in Senegal, where there may be synergies with Dalafin, and two early-stage exploration licences in Gabon where the potential needs to be more fully evaluated before committing to further work.

Stratex remains in a fortunate position, with over £7.0 million in cash at 30 June 2014 and the real expectation of cash flow from Altintepe in 2015 and Öksüt in 2016. We have had very encouraging results at 85% owned Dalafin in Senegal where we continue to work towards defining the scale of the discovery and ultimately a resource; the restructuring of our interests in Ethiopia and Djibouti combined with exposure to the potential of Egypt has enabled us to reduce ongoing overheads; and lastly, the association with Goldstone which has given us a foothold in one of the most highly-endowed gold producing regions in Africa with the potential for development, further discovery and consolidation.

Mindful as always of controlling costs, we continuously review our overheads and exploration costs and seek ways to operate more efficiently. However, the management team is small and stretched, even within our chosen 3-hour time zone and we are looking to strengthen the team with some additional senior management capability. This will enable us to take Stratex into the next phase of its development with consistent cash flow, underpinning our own exploration initiatives. It will also assist in the search for new opportunities where our demonstrably successful business model can be applied to the further benefit of shareholders.

Christopher Hall

Non-Executive Chairman

20 August 2014

Statement of Consolidated Changes in Equity