Stratex International expands acreage in Afar Depression

Stratex International (LON:STI) has expanded its activities into the Republic of Djibouti, with the receipt of six new licences covering 535km2 in the highly prospective Afar Depression of the Main Ethiopian Rift. The company’s overall land package in the Afar Depression now straddles the Ethiopia-Djibouti border, and combined with its licenses in Ethiopia, the total exploration area now reaches 2,780km².

The 535 km² area in Djibouti covers the geological extension of the Tendaho licences in Ethiopia, Stratex’ initial discovery of the Megenta gold occurrence has led to the identification of a number of Rift settings with the potential for hosting gold.

“I believe the Afar Depression represents an exciting new epithermal gold province”, Stratex executive chairman David Hall commented. “Importantly, we have an early-mover advantage in the region, and we have used this to stake a large ground position which straddles the border between eastern Ethiopia and Djibouti.”

"Given the company's healthy cash position, coupled with the support we have received from the governments in both Ethiopia and Djibouti, we are ideally positioned to rapidly advance our development programme in the Afar region and define the economic potential of our land position,” Hall said.

Additionally, Stratex has taken steps to gain further insight into the prospective area in Djibouti, with a separate agreement to acquire an exploration database from founding partners of former Djibouti-focused exploration company Green River Geology. In return Stratex agreed to issue 5% interest in any concession in the country. The company has the right to buy-back these interests for US$2 million, once it decides to move to production.

The licenses have been granted for two years, with options for two separate 18-months extensions. Stratex hold a 90% interest in the licence area and the Djibouti government also retain a 5% interest.

Furthermore, the government retains a right, but not the obligation, to purchase further interests up to a maximum of 35%. To increase its interest the Djibouti government must participate in future project financing, by funding the costs of the required capital investment for mine construction.

Naturally any potential mine would follow the successful completion of exploration programmes and a feasibility studies. To aid the company’s efforts in the region, Stratex has hired Franco Maranzana to consult on the project. “Franco is a highly experienced geologist and manager of 40 years experience and is fluent in eight languages including French and Arabic.  His invaluable experience will be extremely useful in this region", Hall added.

The company said it has moved quickly since it first identified the potential of the northern part of the Main Ethiopian Rift two years ago.

According to Stratex, desk-based research - covering geothermal reports, remote sensing and follow-up ground work - led to the discovery of the Megenta project in eastern Ethiopia, an un-eroded, gold-bearing, low-sulphidation epithermal system. Rock-chip samples returned up to 16.7 grams per tonne (g/t) gold from chalcedonic silica veins, which outcrop over an area of 6km², the company believe that these samples highlight the potential for unexposed gold mineralization.

Stratex highlighted that previous surface sampling and drilling on alteration targets, has already confirmed the presence of Megenta-type gold mineralization in Djibouti.

Indeed, on 7 June 2010, Stratex reported the latest set of positive exploration results from across the border in Ethiopia, as detailed sampling of the Megenta hot spring gold prospect, included grades of up to 16.75g/t gold from a surface samples and an intersection of 2.46 metres grading 2.29g/t gold.

The company said that the sampling of Megenta continued to demonstrate its potential as a “significant gold system” with the values of the samples highlighting the presence of a significant gold mineralisation spanning over a 5,000 metre by 500 metre area at the top of the system.

Following a recent visit to the area, independent consultant and epithermal expert Richard Sillitoe commented: "Recognition of the Megenta hydrothermal system clearly highlights the potential of the rest of the Afar Depression for low-sulphidation epithermal gold systems, some of which may have been more deeply exhumed than the company's recent Megenta gold discovery in Ethiopia."

Stratex's believe that the Afar Depression could hold similar epithermal systems as those found at the Cerro Vanguardia mine in Patagonia, and the Sleeper mine in Nevada, which have hosted multi-million-ounce deposits and are commonly characterized by bonanza grades in excess of 30g/t.

“Looking ahead, we plan to conduct further detailed surface work at Megenta and a complete evaluation of the results to develop a drilling programme, which in turn will further define the economic potential of the project,” said executive chairman of Stratex David Hall.

The 16.75 g/t gold grade was yielded from a 0.5 metre wide silica rib at the Hyena zone, which the company said appeared to be related to intersecting structures defining an area of maximum dilation and hence fluid circulation, which is a common gold foci within epithermal systems.

An additional lower-grade zone, the 500 metre-long 'Gazelle Zone', is located 500 metres to the north-east of the Hyena zone and also contains significant values including 2.46 metre grading 2.29 g/t gold.

Of the total 817 samples collected to date, over a total sampling area of 5,000 metres by 500 metres, only 20, or 2.4%, returned non-detectable gold of less than 0.005 g/t, while 253, or31%, returned equal or greater than 0.1 g/t gold and further 54, or 6.6%, returned equal or greater than 0.5 g/t gold.