Afar Project

The Afar Project comprises eleven Exclusive Exploration Licences (EEL's), covering 2,709 km² of prospective epithermal gold exploration ground in the Afar Depression region of north-eastern Africa - five EEL's in Ethiopia, including the Tendaho EEL, host to the Megenta discovery, and six EEL's in Djibouti (Fig.1). Under the terms of a joint-venture agreement, Thani Ashanti (an AngloGold Ashanti Limited joint-venture company with Thani Investments, Dubai) are earning into 51% of the Afar Project by expending a total of US$3 million on exploration and development over two years. Thani Ashanti is committed to expending US$1 million in the first twelve months to include a 3,000 metre drill programme to test the Megenta prospect. In addition Stratex has EEL's in its own right on new discoveries in the Afar Depression, namely Blackrock and Mille-Serdo, as well as new applications.

Figure 1. Stratex licences within the Afar Project

Ethiopia - Tendaho-Megenta

Stratex's first low-sulphidation epithermal discovery within the Afar Depression, Megenta, was identified during regional work with alteration and mineralization observed over 5 km². A number of feeder structures (Fig.2a) comprising fine chalcedonic silica veins outcrop at surface and contain significant values of up to 0.328 g/t Au. The preservation of overlying steam-heated sinter demonstrates that the top of the system is preserved and therefore that there is considerable potential for the discovery of a large vertical extent to the sub-surface mineralization (Fig.2b).

Figure 2. Megenta prospect A) Low-sulphidation chalcedony vein. B) Schematic interpretation of underlying hot spring system: blue region = bulk-tonnage, low grade potential; red region = higher grade potential ± bonanza grades

Early channel-chip sampling focussed on silica structures and identified multiple drill targets, with grades of up to 3.27 g/t Au over 0.62 m at the Canal Zone, 16.75 g/t Au (with 8.8 g/t Ag) over 0.5 m at the Hyena Zone, and 2.29 g/t Au over 2.46 m at the Gazelle Zone. To date, eleven drill holes have been completed at Megenta (Fig. 3) for 2,260 m of a total 3,000 m programme, funded by Thani Ashanti as part of their initial earn-in to the wider Afar project. Key results to date are shown in Table 1 (Press Release 6 September 2011, 10 August 2011 and 27 July 2011).

Figure 3. Initial drilling of key mineralized zones identified at Megenta (red = silicified sediments)

Table 1. Key intersections from first phase drilling

Hole	Zone	From (m)	To (m)	Width* (m)	Au (g/t)	Note
MG-DD-01	Canal Zone	35.35	37.65	2.30	0.52	In fine grained sandstone hosting ~7cm grey silica vein
MG-DD-01	Canal Zone	59.00	69.40	10.40	0.35	Silicious sandstones with 3% fine disseminated pyrite. Including 1.98 g/t Au over 0.5 m
MG-DD-01	Canal Zone	91.10	100.70	9.60	0.22	Basalt flow-top; rubbly breccias with calcite and silica infill. Including 1.20 g/t Au over 0.75 m
MG-DD-02	Canal Zone	No significant intersections
MG-DD-05	Gazelle Zone	No significant intersections
MG-DD-06	Hyena Zone	40.55	61.98	21.43	0.19	Including 0.28 g/t Au over 9.13 m and 0.82 g/t Au over 0.65 m
MG-DD-07	Hyena Zone	23.50	46.30	22.80	0.23	Including 3.24 g/t Au over 0.5 m
MG-DD-07	Hyena Zone	122.00	136.00	14.00	0.27	Including 2.35 g/t Au over 1.0 m
MG-DD-07	Hyena Zone	230.20	233.70	3.5	0.32
MG-DD-08	Hyena Zone	38.65	39.00	0.35	4.74
MG-DD-08	Hyena Zone	100.05	106.50	6.45	0.20
MG-DD-08	Hyena Zone	110.80	122.70	11.90	0.28	Including 1.6 g/t Au over 0.5 m and 1.37 g/t over 0.4 m
MG-DD-09	Hyena Zone	33.30	77.70	44.40	0.54	Including 2.57 g/t Au over 1.0 m, 1.67 g/t Au over 2.1 m, 1.17 g/t over 1.5 m, 1.13 g/t over 1.18 m and 0.85 g/t Au over 2.75 m
MG-DD-10	Hyena Zone	68.00	111.20	43.20	0.67	Inclduing 8.27 g/t Au over 0.3 m and 3.56 g/t over 2.9 m
MG-DD-11	Hyena Zone	89.50	95.50	6.00	0.60
MG-DD-12	Hyena Zone	61.27	64.31	3.04	0.40	Including 1.34 g/t Au over 0.38 m
MG-DD-12	Hyena Zone	74.13	85.03	10.90	0.46	Including 2.62 g/t Au over 0.34 m and 1.48 g/t Au over 0.49 m
MG-DD-12	Hyena Zone	91.70	94.95	3.25	4.49	Including 19.5 g/t over 0.70 m (92.65-93.35 m)
MG-DD-12	Hyena Zone	99.10	99.45	0.35	1.58
MG-DD-13	Hyena Zone	153.50	158.85	5.35	0.38
MG-DD-13	Hyena Zone	213.10	215.80	2.70	0.50
MG-DD-14	Kingfisher Zone	123.85	127.65	4.00	0.27

*Intervals based on values > 0.1 g/t Au

Three holes were drilled in the Canal Zone and intersected a 53-99 metre vertical sequence of highly permeable clastic sediments overlying a thick sequence of sub-aerial basalt flows that exhibit multiple interflow rubble breccias and well-developed palaeosol horizons. The horizontally bedded sediments and breccias are both highly permeable and would have provided excellent passive fluid pathways for the mineralising fluids. Mineralisation and alteration observed in these holes indicate a distal location within the hydrothermal system, yet highlights the strong pervasive nature of the gold-bearing fluids which appear to have migrated hundreds of metres vertically and laterally. 

Eight drill holes (MG-DD-06-MG-DD-13) have also been completed at the Hyena Zone, targeting the depth-extension of outcropping structures which yielded up to 16 g/t Au at surface. Intersecting north-west and north-east structures may represent a zone of significant dilation that controlled the flow and focus of mineralising fluids, while extensive sinter at surface indicate that the Hyena Zone is the maximum area of fluid flow within the Megenta system. Such structural controls and high fluid flows are of considerable importance in localising the precipitation of significant concentrations of gold.  

 

Figure 4. Colloform banded vein, MG-DD-07; 3.24 g/t over 0.5 m

MG-DD-06 and MG-DD-07, intersected several narrow silica-calcite veins (Fig. 4) and hydrothermal breccia zones 50 metres and 200 metres below gold-anomalous zones outcropping at surface. This demonstrates that structures can be projected over 200 metres vertically below outcropping high-grade zones. Furthermore, MG-DD-08 has proved lateral continuity of these structures by intersecting colloform-banded silica-calcite veining which assayed up to 4.74 g/t Au over 0.35 metres. MG-DD-09 was drilled SW of MG-DD-08 under the exposed sinter terrace towards the main graben fault and intersected extensive alteration between 44.4 and 77.7 metres including gold in thin calcite-quartz veins and within altered interflow breccias averaging 0.54 g/t Au with thin veins assaying up to 4.09 g/t Au over 0.4 metres (Fig. 5 and 6). 

MG-DD-10 tested south of hole MG-DD-9 and hit a broad zone of gold mineralisation from 68 metres downhole with extensive alteration and numerous calcite-silica veins. This zone returned 0.67 g/t Au over 43.20 m, including 8.27 g/t Au over 0.3 m and 3.56 g/t Au over 2.9 m. 

Figure 5. Colloform banded veins, MG-DD-09; 4.00 g/t over 0.4 m

 

Figure 6. Colloform banded vein with visible sulphides, MG-DD-09; 4.00 g/t over 0.4 m

MG-DD-12 was drilled some 460 metres south-east of MG-DD-9 in the Hyena Zone to test the graben edge concealed beneath the extensive sinter terrace. The graben fault is associated with the sinter terrace and is now traceable for 2,000 metres south of the Awash River and for an additional 1,000 metres north, the entire length of which is a priority target at the project. Hole MG-DD-12, which drilled through 2.10 metres of sinter terrace, intersected lacustrine muds down to 74.13 m and then entered a zone of highly altered and brecciated basalt with numerous veins, with calcite content greater than silica, which returned 0.46 g/t Au over 10.90 metres to 85.03 metres.  From 91.70 metres the hole entered a zone of hydrothermal brecciation, faulting and veining hosted in basalts that returned 4.49 g/t Au over 3.25 metres (including 19.50 g/t Au over 0.70 metres; Fig. 7) and values of 1.58 g/t Au over 0.35m and 1.62 g/t Au over 0.85m. The 19.50 g/t Au sample is the highest assay to date from Megenta and is from a 0.25 metre vein within a 0.70 metre interval, highlighting that bonanza grades are achievable within the veins - as observed elsewhere at the Akehil and Blackrock prospects. Hole MG-DD-11 also intersected mineralised veins within lacustrine sediments, returning 0.6 g/t between 89.50 and 95.50 metres. 

Figure 7. Colloform banded quartz vein at 93 m, MG-DD-12; 19.5 g/t over 0.7 m

Hole MG-DD-13 was drilled east of and below hole MG-DD-9 but did not reach the graben structure defined in hole MG-DD-9. Best intersections were 153.50 m to 158.85 m grading 0.38 g/t Au and 213.10 m to 215.80 m grading 0.50 g/t Au.

MG-DD-14 was drilled to test the Kingfisher Zone, located approximately 500 metres north-east of the Hyena Zone. The best interval was 123.85 m to 127.65 m grading 0.27 g/t Au.

These results have define the graben fault as a priority target over 460 metres and, once all results from this drilling programme have been reviewed with partner Thani Ashanti, follow-up drilling will be conducted to define the critical boiling zone and any associated bonanza gold mineralisation.

Ethiopia - Tendaho-Akehil

The Akehil prospect is located within the Tendaho EEL, 9 km southwest of Megenta. Initial work identified extensive sinter exposed over an area of 500 m by 500 m, with reconnaissance sampling returning anomalous gold up to 0.13 g/t Au. One sample of banded chalcedony float material recovered from close to this area of sinter development returned 14.0 g/t Au (with 2.43 g/t Ag). Two additional float samples comprising sugary quartz and finely banded colloform chalcedony with pinkish adularia bands returned 57.3 g/t (Fig. 8) and 16.0 g/t respectively. Bladed calcite replacement is also observed in the 16 g/t sample. These samples were found lying on soft clay which appears to be rock that has completely broken down due to steam heating. The float is not rounded and is thought to be close to source, confirming the existence of high grade veins in this setting.

Figure 8. Colloform banded vein float comprising sugary silica-pinkish adularia, 57.30 g/t Au 

The silicified sediments outcrop in a graben and are approximately 2 km from the graben margin fault; a very similar setting to Megenta. Approximately 300 metres west lies a north-south trending silicified rib structure which can be traced for 400 metres, and comprises silicified sediments, with a limited area of sinter at its northern end. Three grab samples from the rib itself returned 0.20 g/t, 0.16 g/t and 0.13 g/t Au respectively. The prospect is now a priority target for follow-up to identify the controls on mineralisation and potential drill targets.

Djibouti - Asal

The Asal licence was secured on the basis of geology, structure and alteration using Landsat imagery. Initial field work defined epithermal quartz vein float (disconnected rock fragments) with 2.1 g/t and 4.5 g/t Au returned from reconnaissance sampling. Further detailed mapping and sampling defined a 4 sq km area of quartz and banded chalcedonic float returning best values of 2.54 g/t Au, 5.07 g/t Au and 7.8 g/t Au, and with a peak grade of 29.0 g/t exemplifying the potential for high-grade veins.

At least two rhyolite domes, Hercules I (Fig. 9) and Hercules II, are also exposed in the concession and are highly altered and brecciated and contain pyrite. This is significant and suggests that the rhyolite itself may be a target as well as being responsible for generating the widespread epithermal quartz vein float found in the area. A total of 14 samples have been taken from the exposed Hercules I dome, with half the samples returning >0.2 g/t Au. Best results from grab samples are 3.08 g/t Au, 0.89 g/t Au (Fig. 10), 0.88 g/t Au, 0.43 g/t Au, 0.35 g/t Au, 0.24 g/t Au and 0.21 g/t Au. Additionally, five samples taken from Hercules II returned 1.67 g/t Au, 0.89 g/t Au, 0.29 g/t Au, 0.13 g/t Au and 0.091 g/t Au.

Figure 9. View to Hercules I rhyolite dome, Asal EEL - thin layer of basalt boulders in foreground

Stratex has applied for additional ground around the current Asal EEL and will report developments in due course. The Company now intends to undertake further detailed mapping and systematic sampling of the extensive mineralisation within the licence and its extensions to define the full extent of the rhyolitic domes and the location and nature of the epithermal veins and structures that they host.

Figure 10. Grab sample from Hercules I rhyolite dome, Asal, containing 0.89 gt Au

Djibouti - Dimoli Khan

The Dimoli Khan licence is 100 sq km and is located 30 km west of the Asal licence. Mineralisation is associated with a 2.9 km alteration corridor. Quartz-chalcedony-calcite veins are abundant within altered rhyolitic rocks and returned a peak value of 1.76 g/t Au. Stream sediment sampling has further highlighted the gold potential here, with samples returning highly anomalous values of 48 ppb, 89 ppb, and 126 ppb Au in minus 200 mesh samples.