Stratex Intl advances Turkish gold projects, looks to conserve cash in 2010

Stratex International (AIM: STI) reported on the progress made in the full year 2009 today, which included three alliances to fast-track its four major projects in Turkey, new targets defined at the Oksut project and expansion into Ethiopia.

The company stated it has achieved the goal of guiding the business through the financial crisis and making it stronger than at the beginning of the downturn, increasing its portfolio of gold assets in Turkey and Ethiopia to 1.17 Moz (million ounces) across all categories of JORC standard. With the new partnerships in Turkey, the company has attracted US$15.5 million to fast-track its projects in that country.

A joint venture (JV) was formed in Turkey with NTF Insaat Ticaret to fast-track the Inlice and Altintepe gold projects into production, which contain a current combined oxide-gold resource of 570,000 oz (ounces).

Altintepe is now expected to go into production within 36 months, while the Inlice project is expected to be producing within 18 months after the final closure of the definitive JV agreement with NTF, expected for Q2 2010.

In August last year, Centerra Gold optioned the Oksut project to help advance it through feasibility to production. An in house estimate for the first zone, Ortacam, totalled 147,814 oz of oxide gold at a cut-off grade of 0.2 g/t for all categories, supporting the project’s potential to host a significant epithermal and porphyry mineralisation.

In Ethiopia, the company set up a strategic alliance to advance the Shehagne gold project and made a significant discovery of the first epithermal gold mineralisation in the Afar region of Ethiopia, which is fully controlled by Stratex.

“During the period under review, we secured joint venture partnerships with mining majors to fast-track project development, took our first steps towards moving into gold production, and expanded our geographic reach into Africa. Importantly, through the partnership agreements we have significantly de-risked our portfolio, having attracted a potential US$15.5 million of partners' money to develop projects found by Stratex...whilst Turkey remains a key focus, we are confident that our skills can be transferred to expand our geographic reach and add value to shareholders,” said executive chairman of Stratex David Hall.

Stratex posted an operating loss of £2.2 million compared to the previous year’s US$1.27 million, while pre-tax losses amounted to US$2.15 million compared to US$1 million in 2008. The increase in losses was a direct result of two exceptional items including the revaluation of projects and reflecting the shares issued to Teck Resources Ltd (TSX, NYSE: TCK) in the income statement, which made for a combined charge of nearly £0.9 million.

The company had no revenues in 2009 after reporting £29,102 in the previous year.

The board stated that conservation of cash will be prioritised next year due to lending restraints resulting from the banking crisis, though noting that the balance sheet was healthy following the recent £1.3 million financing. The company has already managed to cut its year-over-year cash spend by 46%.

http://www.proactiveinvestors.co.uk/companies/news/14202/stratex-intl-advances-turkish-gold-projects-looks-to-conserve-cash-in-2010-14202.html