2nd Feb 2015 09:38
LONDON (Alliance News) - Stratex International PLC Monday said it will transfer its Karaagac gold licence in Turkey to local company Anadolu Export Maden Sanayi ve Ticaret Limited Sirketi, but will still be able to share in any upside potential of the site by retaining smelter return royalties.
Karaagac has been on hold for several years because Stratex doesn't consider it a core project.
It has now signed a deal to transfer the licence to Anadolu, under which the Turkish company will spend up to USD1.5 million on exploration and drilling at the project within two years. The transfer will have to be cleared by Turkish authorities.
If a minimum JORC-compliant indicated resource of 50,000 ounces of gold, with a 0.2 grammes per tonne gold threshold limit, is confirmed within the two years, Anadolu will then pay Stratex USD500,000 in cash and a 1.5% net smelter returns royalty on any future mineral production.
If, after defining the minimum resource, Anadolu decides not to proceed to the operation phase before the end of the two years, the licence will revert to Stratex, which will manage the exploration and drilling programmes.
Stratex has previously defined an in-house non-JORC compliant inferred resource of 6.4 million tonnes grading 0.78 grammes per tonne gold for a total of 156,798 ounces of gold. The project is valued at around GBP53,000 in the company's latest financial statements.
"Karaagac is not a core project for Stratex, and has been on hold for several years, but we have always felt that it has potential for upgrading the resource. This agreement allows us to share in that upside potential should it be realised and the eventual royalty flow would augment our anticipated cash flow from Altintepe and from the Öksüt project where we will benefit from a 1% NSR royalty when it is put into production by Centerra Gold," Stratex Chief Executive Bob Foster said in a statement.
Stratex shares were down 1.3% at 1.95 pence Monday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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