11th Mar 2015 09:06
LONDON (Alliance News) - Stratex International PLC Wednesday reported a narrowed loss for 2014, largely due to lower project impairments, as the feasibility study for the Muratdere copper-molybdenum-gold project in Turkey was completed, enabling it to start an environmental impact assessment permit process.
The gold explorer focused on Turkey and Africa reported a net loss of GBP2.4 million for 2014, compared with a GBP3.6 million loss in 2013, as it cut administration expenses by 16% and project impairments fell to GBP269,109, from GBP2.7 million. It isn't currently earning any revenue, although it is set to start producing gold at its Altintepe project in Turkey later in 2015.
It said impairment writeoffs were GBP510,035 relating to its withdrawal from the Sinoe project in Liberia and revaluation of the Turkish licenses that are up for sale. It also wrote down goodwill of GBP926,546 relating to its acquisition of Silvrex Ltd in 2011. However, it released back the deferred consideration of GBP1.1 million in respect of the Silvrex deal as it is no longer payable.
Stratex ended the year with cash and cash equivalents of GBP4.7 million, down from GBP10.6 million at the end of 2013.
Separately, Stratex said the feasibility study for the Muratdere project highlighted a 16-year mine life comprising 16 million tonnes of resource of which 59% is supergene enriched and 41% is hypogene. It contained a revised three-pit mining plan with only limited drill and blast meaning that mining costs are reduced. The total metals production in concentrate was 68,139 tonnes of copper, 32,300 ounces ofgold, and 954,677 ounces of silver and no allowance for recovery of molybdenum.
Project economics in the study indicate life of mine net income after tax of USD57 million, an internal rate of return of 16% and a net present value of USD17.6 million, based on metals prices of USD5,580 a tonne copper, USD1,290 an ounce of gold, and USD18.0 an ounce of silver.
"The revised mine plan, comprising exploitation of the supergene enriched copper sulphide material first and then hypogene material, provides considerable flexibility in managing grade control and cash flow. The project economics are encouraging and any increase in the depressed copper price would have a very positive impact," Stratex Chief executive Bob Foster said in a statement.
"Lodos have initiated the (Environmental Impact Assessment) process, based on this smaller scale, lower capex scheme, to avoid any delays in future project implementation and in the meantime we are reviewing the technical and financial options for the project with them," he added.
Lodos Maden Yatirim Sanayii ve Ticaret AS is the company's joint venture partner on the project, which funded the fesibility study as the final part of its commitment to earn up yo 70% of the project.
"Stratex's total investment of USD1.2 million in the early exploration and evaluation of the project has already seen a cash return of USD2.2 million plus a sound feasibility study as our partners vest at 70% of the project," Foster said.
Stratex shares were down 7.2% at 1.74 pence Wednesday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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