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Notes to the unaudited financial statements

1. Basis of preparation

The condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 ‘Interim Financial Reporting’. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2016, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

2. Financial Information

The interim financial information set out above does not constitute statutory accounts within the meaning of the Companies Act 2006.  It has been prepared on a going concern basis in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) as adopted by the European Union. Except as described below, the accounting policies applied in preparing the interim financial information are consistent with those that have been adopted in the Group’s 2016 audited financial statements. Statutory financial statements for the year ended 31 December 2016 were approved by the Board of Directors on 15 May 2017 and delivered to the Registrar of Companies. The report of the auditors on those financial statements was unqualified. 

Risks and uncertainties

The key risks that could affect the Group’s short and medium term performance and the factors that mitigate those risks have not substantially changed from those set out in the Group’s 2016 Annual Report and Financial Statements, a copy of which is available on the Company’s website:  www.stratexinternational.com. The Group’s key financial risks are the availability of adequate funding and foreign exchange movements.

Accounting Policies

Critical accounting estimates and judgements:

The preparation of condensed consolidated interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in note 4 of the Group’s 2016 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed significantly during the interim period. The condensed consolidated interim financial statements have been prepared under the historical cost convention as modified by the measurement of certain investments at fair value.

There have been no changes in accounting policy during the period and no new and amended standards have been adopted by the Group during the period.

The financial information for the 6 months ended 30 June 2017 and the 6 months ended 30 June 2016 has not been audited.

The business is not subject to seasonal variations. No dividends have been paid in the period (2016: £nil).

3. Operating Segments

Operating segments are reported in a manner which is consistent with internal reports provided to the Board and are used by the Directors to make strategic decisions. The management structure reflects these segments. The Group’s exploration operations and investments are based in three geographical areas, namely Turkey, East Africa and West Africa. The Group's head office is located in the UK and provides corporate and support services to the Group and researches new areas of exploration opportunities.

The allocation of profits, losses, assets and liabilities by operating segment is as follows:

Cash and other assets include cash and cash equivalents amounting to £6,084,884 at 30 June 2017, (2016: £2,728,190).

4. Intangible assets

On 2 June 2017, Goldstone Resources Limited ceased to be accounted for as controlled subsidiary (see note 5) and the Goldstone Homase-Akrokerri project was removed as an intangible asset from the balance sheet, and replaced as an equity accounted associate.

5. Investments in equity-accounted associates

a) On 2 June 2017, Goldstone Resources Limited ceased to be accounted for as controlled subsidiary as a result of the reduction in the Stratex representation on the Board of Directors. Goldstone Resources Limited was recategorised as an equity-accounted associate with a carrying value of £1,318,885.

b) During the Period, Stratex’s shareholding interest in Goldstone Resources Limited was reduced to 23.36% as at 30 June 2017, resulting in a net loss through the consolidated statement of comprehensive income of £351,542.

c) Stratex’s shareholding interest in Thani Stratex Resources Limited reduced during the period to 29.5%. The Company subsequently injected a further £301,438 into share capital increasing its interest to 30.5% shareholding interest. These transactions resulted in a net gain through the consolidated statement of comprehensive income of £9,103.

6.  Available-for-sale financial assets

The sale of the Group’s 45% interest in Altıntepe was completed in April 2017 for US$8 million in cash, net of any taxes and costs. A book gain of £2,883,352 has been recorded in the current period following recording a £1.6m profit in the 2016 annual results for services rendered to Altıntepe.

7.  Related party transactions

Directors of the Company received total remuneration of £364,004 for the six months ended 30 June 2017 (six months ended 30 June 2016 - £242,046).

8.  Earnings per share

The calculation of earnings per share is based on the following:

As the Group incurred a loss for the period to 30 June 2016, no options or warrants are potentially dilutive in accordance with IAS 33 and hence basic and diluted earnings per share are the same.

9.  Approval of interim financial statements

The interim financial statements were approved by the Board of Directors on 2 August 2017.

The information contained within this announcement is deemed by Stratex to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

** ENDS **

For further information please visit www.stratexinternational.com, @StratexPLC on Twitter,                                 email [email protected], or contact:

Notes to Editors:

Since listing in 2006, Stratex has discovered more than 2.2 million ounces of gold and 7.09 million ounces of silver, as well as 186,000 tonnes of copper. The Company owns 15% of a copper-gold project at feasibility stage and an exciting exploration project in Senegal. The Company also has significant interests in Goldstone Resources Ltd, Thani Stratex Resources Ltd and Tembo Gold Corp. for their exploration projects in Ghana, Djibouti and Egypt, and Tanzania respectively.