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Stratex International Plc 

(“Stratex” or “the Company”) 

Interim Results

For the six-month period ended 30 June 2015

Stratex International Plc, the AIM-quoted exploration and development company focused on gold and base metals in Turkey and Senegal and with strategic interests in East Africa and Ghana, announces its unaudited interim results for the six-month period ended 30 June 2015.

Operational Highlights:

• Altintepe - construction of the mine at the Altintepe gold project in Turkey is on track to be completed later this month with first production anticipated by end of Q3 2015, as per the announcement on 5 August 2015;
• Muratdere – the feasibility study funded by our partner, Lodos Maden Yatrim Sanayii ve Ticaret A.Ş. (“Lodos”), has been completed at the Muratdere copper-gold project in Turkey. A 16 year life of mine has been defined with total metals production in concentrate of 68,139 tonnes copper (150 million pounds), 32,300 oz gold, and 954,677 oz silver, as per the announcement on 5 May 2015;
• Homase/Akrokerri – an auger sampling programme at the Homase/Akrokerri gold project in Ghana has been successfully completed and two new zones of mineralisation have been identified. Further auger sampling is underway and potential drill locations have been defined. Goldstone Resources Limited (“Goldstone”) has increased its interest in the Homase gold licence in Ghana from 65% to 90% (see release dated 4 June 2015); and
• Dalafin – trench mapping and sampling work at the Madina Bafé prospect within the Dalafin gold project in Senegal has confirmed the presence of a sizable mineralised zone. Further exploration is anticipated for 2016, as per the announcement on 11 August 2015.

Financial Overview:

• Operating loss for the first six months is £1,182,009 and compares to an operating loss for the same period last year of £1,257,803. Pre-tax loss of £1,388,082 compares to a pre-tax loss for the same period last year of £1,414,518;
• Operating losses in the two periods are not directly comparable as the 2014 results included the East African operations, which were sold to the Thani-Stratex joint venture in October 2014 and the Company’s 40% share of the joint venture losses are now included in “share of losses of investments accounted for using the equity method”. In addition, the 2015 results include Goldstone following the Company’s 34% acquisition in October 2014. After adjusting for these two events Operating losses have reduced by 14% like-for-like; and
• Cash balance at 30 June 2015 was £2,533,278.

Chairman’s Statement

In common with most exploration companies, Stratex reported a loss for the six months to 30 June 2015.  However, your management has continued to bear down on administrative costs without undermining the Company’s operational capability.  Administration costs were £1.14 million in the six months to 30 June 2015; £1.31 million in the same period in 2014 and £1.68 million in the first half of 2013.

Progress during the period has been predominantly driven by our operations in Turkey where construction has continued at our 45% owned Altintepe gold mine, where production is expected before the end of Q3, and at Muratdere where our partners have completed a feasibility study on the copper-gold porphyry project.  Whilst Muratdere has attractive economics, Stratex is assessing whether to contribute to the continuing development costs, sell its interest, or accept dilution to a royalty position.

On the subject of royalties, the Öksüt project, where Stratex has a 1% NSR royalty capped at US$20 million, now has a completed feasibility study that demonstrates robust economics. Production is expected to commence in 2017 and could give us another source of regular cash flow in the mid-term. Alternatively, we are also considering sale of the royalty in order to release funds in the near-term for investment in other advanced projects with a view to developing a more active source of cash flow.

Our search for more advanced projects, which we could acquire and accelerate towards production, has continued. Despite engaging with several targets, we have yet to acquire the right asset at the right price. This task continues and, with the commencement of sustainable operating cash flow, Stratex’s hand should be strengthened in future negotiations.

Exploration work has been concentrated on trenching and sampling at the Madina Bafé target on the Dalafin licence in Senegal where we continue to be encouraged by results with gold mineralisation defined over 1.2 km. Elsewhere in West Africa, Goldstone Resources, where we have a 34% interest, has re-evaluated its soil sampling results at Homase-Akrokerri in Ghana and followed it up with an auger drilling programme. The positive results, which include new zones of mineralisation, are being prioritised ahead of a planned drilling programme. 

In East Africa, Thani Stratex Resources, in which Stratex has a 40% interest, has focused on cost reduction across its operations in line with current market conditions. However, low cost exploration has advanced the Anbat project, within Hodine concession in Egypt, to drill stage. In Djibouti a new target at Asaleyta has been defined.

Looking ahead, Stratex is on the cusp of a major change in its status; from a cash-consuming company, to one with significant operating cash flow from a fully carried 45% interest in a low-cost, open pit heap leach project at Altintepe. Most recent indications are that, subject to the usual formalities for commencing production at a mine in Turkey, we should see production commence in September. 

The financing environment within the mining industry remains hostile, particularly for companies wishing to raise cash to stay afloat.  Commodity prices are depressed along with corporate results and share prices.  However, Stratex expects to benefit from its fortunate position of having operating cash flow, something that should continue to distinguish it from its peers.  Your Board looks forward to reporting that Stratex’s gold mine has finally achieved production and to the improved market perception that we hope this will bring.

Christopher Hall

Non-Executive Chairman

26 August 2015

Statement of Consolidated Changes in Equity