11th Mar 2009 07:00
Stratex International Plc / Index: AIM / Epic: STI / Sector: Mining
11 March 2009
Stratex International Plc ('Stratex' or 'the Company')
Final Results
Stratex International Plc, the AIM quoted international exploration and development company currently focusing on gold and base metal opportunities in Turkey, announces its results for the year ended 31 December 2008.
2008 Highlights
Total declared gold resources across portfolio of approximately 1 million oz
Strengthened portfolio - acquired additional licence areas bringing total area under control in Turkey to 1,724 square kilometres
Confirmed new significant greenfield discovery at Öksüt - initial drilling results included intersection of 270.2 metres averaging 1.22 g/t oxide gold
Announced Altıntepe gold-silver prospect in house JORC-compliant resource estimate of 602,600 oz gold, including an oxide gold resource of 472,318 oz
Announced total resource of 262,300 oz gold at Inlice prospect, comprising 98,300 oz oxide gold resource and 164,000 oz sulphide gold resource
Identified three new porphyry targets within the Konya Volcanic Belt with preliminary drilling completed at two of these, Gölcük and Karacaören
Actively seeking joint venture opportunities to accelerate the development of Inlice and Altıntepe through feasibility into production and develop exploration portfolio
Stratex CEO Bob Foster said, "Stratex made excellent progress in 2008 as we continued to make new discoveries and advance our projects which demonstrate real economic potential. In line with this, we are actively positioning ourselves as a leading gold focused exploration and development company with ambitions of fast-tracking our portfolio of gold assets into low cost producing entities in tandem with joint venture partners.
"With a cash position of £3 million, we are well placed to continue our exploration activities and seek new opportunities to add value to our portfolio and enhance shareholder value by major discovery of new gold deposits."
Chairman's Statement
Stratex has seen a year of considerable advancement as it continues to build its position as a leading explorer and developer of gold projects in Turkey. Regretfully, the current economic turmoil and resulting wholesale sell-off of shares with no respect for their underlying value, has meant that this progress has not been reflected in the share price despite the favourable gold conditions. However, posing the question 'is the glass half empty or half full?' We prefer the latter position!
During the period under review, we increased Stratex's total declared gold resources to approximately 1 million oz as we advanced the Altıntepe and Inlice projects to a resource definition stage and strengthened our portfolio by acquiring the 75.51 square kilometre Öksüt licence area to further consolidate our holding over new belts of gold mineralisation. Furthermore, we continued our exploration and development programmes across our portfolio, returning exciting new discoveries of gold mineralisation at Öksüt, Hasançelebi and Altunhisar.
Stratex's objective remains the same - we are a gold focused company committed to discovering and developing new projects through low cost exploration. Interestingly, gold is the only commodity that has held up through the current economic crisis and saw an overall rise in price of 5% during 2008. New gold projects are few and far between and those developed recently are often 're-cycled'. Moreover, companies unable to finance these projects are suspending work and even closing down completely. Stratex's Inlice and Altıntepe gold projects, though not large, have potential to be low-cost producers, as we have focused on identifying readily treatable oxide material in areas of good infrastructure to help rapidly develop these deposits.
Importantly, we maintain a healthy cash position and are well funded for the next 24 months based on current levels of expenditure. We believe this places Stratex in a strong and stable position as we continue to develop our exciting discoveries, seek new opportunities and search for joint venture partners to accelerate the development of Inlice and Altıntepe through feasibility and into production and develop our exploration portfolio.
On the theme of partnerships, our highest priority for 2009 is to search for new partners to accelerate the Inlice and Alintepe gold projects into production. Unfortunately, our agreement with Australian junior Syrah Resources became a casualty of the financial downturn and Syrah's likely difficulties to raise the necessary medium-term financing. However, we are in discussion with a number of other key players and hope to be able to advise the market of a positive outcome in this respect in the near future.
In terms of exploration partnerships, Stratex is recognised within the industry for its discovery rate and quality of exploration in Turkey and has been approached by a number of companies with a view to working together. By forming partnerships, the portfolio can continue to be developed whilst reducing your Company's financial exposure. Meanwhile, we will also gain the flexibility to consider other opportunities. In line with this, we have been undertaking low-cost target generation with a view to identifying new potential areas of gold mineralisation in Turkey and further afield to add to our overall acreage.
The Öksüt discovery was a major development in 2008 for Stratex, and highlights our expertise in discovering new areas of gold mineralisation. Impressive intersections generated from this discovery included:
270.20 metres from surface grading 1.22 g/t Au in oxide and minor sulphide in hole ODD-8 - including 40.70 metres from 77.00 metres grading 2.77 g/t Au in oxide
62.45 metres grading 2.16 g/t Au in oxide in hole ODD-3
73.30 metres grading 1.36 g/t Au in oxide in hole ODD-4
93.60 metres grading 5.61 g/t Au in oxide in hole ODD-12
We are currently reviewing these intersections as the geology at Öksüt is not a simple lithologically controlled scenario as we first thought. We have explored the greater area of the project, some eight square kilometres and, whilst we do not have the excellent outcrop values observed at our first target, the Ortaçam Zone, there is considerable potential for expanding the gold mineralisation.
Our exploration teams have also continued to advance exploration at the Hasançelebi and Altunhisar prospects with encouraging results and further drilling is scheduled in 2009 to help determine the economic potential of the regions. It is likely that, in line with our strategy, we will seek joint venture partners to further explore Öksüt and potentially our other prospective early-stage gold projects at Hasançelebi and Altunhisar.
Additionally, our Konya project continues to demonstrate the potential to host a major porphyry gold system following the discovery of the Karacaören, Kozlu, and Gölcük porphyry occurrences within the Konya Volcanic Belt. Preliminary drilling is now completed at the Gölcük and Karacaören occurrences and we look forward to updating the market in due course.
It is your Company's intention to come out of this financial downturn a stronger and better-positioned company than when we went into it in terms of projects, partners and an enlarged resource portfolio. The exploration and development business, along with mining, requires a long-term perspective. As the financial markets open up and money becomes available to develop new mining projects, then the demand for metals and the need to deliver new quality projects to increasingly 'hungry' mining companies will return. Companies such as Stratex, which are able to survive this downturn, will be well poised to benefit from this need for new quality projects and mines. This is your Board's objective, to fill that half full glass!
In the current depressed market conditions, the existing employee share option plan no longer provides any element of incentivisation for our employees. Accordingly, after consideration by the Remuneration Committee, the existing share options issued to employees will be cancelled and the Board intends to implement a new share option plan for employees which will reflect a premium over the current market valuation of the Company. This will ensure that all employees are suitably rewarded and incentivised for the additional efforts now required to rebuild the market value of your Company.
It remains for me to thank you for your support and to thank my fellow Board members and the entire Stratex team for their continued commitment, enthusiasm and energy, which will ensure your Company continues to make progress during difficult times.
David J. Hall
Chairman
11th March 2009
|
Consolidated Income Statement - by function of expense |
|||
|
Year ended 31 December 2008 £ |
Year ended 31 December 2007 £ |
||
|
Revenue |
29,102 |
- |
|
|
Cost of sales |
- |
- |
|
|
Gross profit |
29,102 |
- |
|
|
Administrative expenses |
(1,287,774) |
(1,270,654) |
|
|
Exchange gains/(losses) - net |
(11,266) |
(5,678) |
|
|
Operating loss |
(1,269,938) |
(1,276,332) |
|
|
Finance income |
274,735 |
247,014 |
|
|
Loss before income tax |
(995,203) |
(1,029,318) |
|
|
Income tax (expenses)/credit |
86,120 |
3,559 |
|
|
Loss for the year attributable to equity holders of the Company |
(909,083) |
(1,025,759) |
|
|
Loss per share for losses attributable to the equity holders of the Company during the year (expressed in pence per share) |
|||
|
- basic and diluted |
(0.39) |
(0.51) |
|
|
Consolidated Balance Sheet |
|||
|
As at 31 December |
|||
|
2008 £ |
2007 £ |
||
|
ASSETS |
|||
|
Non-current assets |
|||
|
Tangible assets |
186,123 |
99,728 |
|
|
Intangible assets |
4,044,363 |
1,970,931 |
|
|
Trade and other receivables |
114,488 |
79,813 |
|
|
Deferred tax asset |
150,320 |
56,327 |
|
|
4,495,294 |
2,206,799 |
||
|
Current assets |
|||
|
Trade and other receivables |
667,226 |
481,216 |
|
|
Cash and cash equivalents |
3,313,022 |
6,274,553 |
|
|
3,980,248 |
6,755,769 |
||
|
Total Assets |
8,475,542 |
8,962,568 |
|
|
EQUITY |
|||
|
Capital and reserves attributable to equity holders of the Company |
|||
|
Ordinary shares |
2,342,394 |
2,340,669 |
|
|
Share premium |
8,192,829 |
8,185,929 |
|
|
Other reserves |
514,931 |
141,732 |
|
|
Accumulated losses |
(2,677,289) |
(1,816,093) |
|
|
Total equity |
8,372,865 |
8,852,237 |
|
|
LIABILITIES |
|||
|
Non-current liabilities |
|||
|
Employee termination benefits |
7,179 |
2,477 |
|
|
Deferred tax liabilities |
10,566 |
33,843 |
|
|
17,745 |
36,320 |
||
|
Current liabilities |
|||
|
Trade and other payables |
84,932 |
74,011 |
|
|
84,932 |
74,011 |
||
|
Total equity and liabilities |
8,475,542 |
8,962,568 |
|
Consolidated Statement of Changes in Equity
|
Share Capital £ |
Share Premium £ |
Merger Reserve £ |
Share Option Reserve £ |
Accumulated Loss £ |
Translation Reserve £ |
Total Equity £ |
|
|
Balance at 31 December 2006 |
1,536,167 |
2,101,342 |
(485,400) |
157,932 |
(808,224) |
(49,256) |
2,452,561 |
|
Issue of ordinary shares |
804,502 |
6,346,622 |
- |
- |
- |
- |
7,151,124 |
|
Share based payments |
- |
- |
- |
243,909 |
- |
- |
243,909 |
|
Share options exercised |
- |
33,674 |
- |
(51,564) |
17,890 |
- |
- |
|
Costs of share issue |
- |
(295,709) |
- |
- |
- |
- |
(295,709) |
|
Consolidated loss for the period |
- |
- |
- |
- |
(1,025,759) |
- |
(1,025,759) |
|
Movement on translation reserve |
- |
- |
- |
- |
- |
326,111 |
326,111 |
|
Balance at 31 December 2007 |
2,340,669 |
8,185,929 |
(485,400) |
350,277 |
(1,816,093) |
276,855 |
8,852,237 |
|
Issue of ordinary shares |
1,725 |
6,900 |
- |
- |
- |
- |
8,625 |
|
Share based payments |
- |
- |
- |
160,592 |
- |
- |
160,592 |
|
Share options exercised and forfeited |
- |
- |
- |
(47,887) |
47,887 |
- |
- |
|
Consolidated loss for the period |
- |
- |
- |
- |
(909,083) |
- |
(909,083) |
|
Movement on translation reserve |
- |
- |
- |
- |
- |
260,494 |
260,494 |
|
Balance as 31 December 2008 |
2,342,394 |
8,192,829 |
(485,400) |
462,982 |
(2,677,289) |
537,349 |
8,372,865 |
|
Consolidated Cash Flow Statement |
|||
|
Year ended 31 December 2008 £ |
Year ended 31 December 2007 £ |
||
|
Cash flows from operating activities |
|||
|
Net cash used in operating activities |
(1,299,084) |
(1,208,592) |
|
|
Cash flows from investing activities |
|||
|
Purchases of property, plant and equipment |
(123,389) |
(80,586) |
|
|
Purchases of intangible assets |
(2,218,232) |
(1,209,505) |
|
|
Interest received |
274,735 |
247,014 |
|
|
Net cash used in investing activities |
(2,066,886) |
(1,043,077) |
|
|
Cash flows from financing activities |
|||
|
Net proceeds from issue of ordinary shares |
8,625 |
6,855,415 |
|
|
Funds received from related party |
395,814 |
107,637 |
|
|
Net cash from financing activities |
404,439 |
6,963,052 |
|
|
Net (decrease)/increase in cash and cash equivalents |
(2,961,531) |
4,711,383 |
|
|
Cash and cash equivalents at beginning of the period |
6,274,553 |
1,563,170 |
|
|
Cash and equivalents at end of the period |
3,313,022 |
6,274,553 |
|
Notes to the Financial Statements
General information
The principal activity of Stratex International plc ('the Company') and its subsidiaries (together 'the Group') is the exploration and development of precious and high-value base metals. The Company completed a listing on the Alternative Investments Market of the London Stock Exchange on 4 January 2006.
The address of its registered office is 212 Piccadilly, London W1J 9HG.
These consolidated financial statements were authorised for issue by the Board of Directors on 9th March 2008.
Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented.
Basis of preparation:
These financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union ('EU'), IFRIC interpretations and those parts of the Companies Act, 1985 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention. A summary of the more important group accounting policies is set out below. The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on Management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.
Basis of consolidation:
Stratex International plc was incorporated on 24 October 2005. On 21 November 2005 Stratex International plc acquired the entire issued share capital of Stratex Exploration Ltd by way of a share for share exchange.
The transaction has been treated as a Group reconstruction, and has been accounted for using the merger accounting method. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All significant intercompany transactions and balances between group enterprises are eliminated on consolidation.
Intangible assets
The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of any asset may exceed its recoverable amount. The assessment is carried out by allocating exploration and evaluation assets to cash generating units which are based on geographical areas. Where the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities at that unit, the associated expenditures will be written off to the Income Statement.
Impairment
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (i.e. cash generating units). If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment losses are recognised as an expense immediately, unless the relevant asset is land or buildings at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1 Expenses by nature
|
2008 £ |
2007 £ |
||
|
Employee benefit expenses |
549,016 |
509,739 |
|
|
Fees paid to related parties |
23,770 |
60,303 |
|
|
Consultant geologist services |
98,526 |
93,465 |
|
|
Depreciation, amortisation and impairment charges |
14,579 |
125,643 |
|
|
Other expenses |
601,883 |
481,505 |
|
|
1,287,774 |
1,270,654 |
2 Cash used in operations
|
2008 £ |
2007 £ |
||
|
Loss before tax |
(995,203) |
(1,029,318) |
|
|
Adjusted for: |
|||
|
issue of share |
160,592 |
243,909 |
|
|
depreciation |
47,843 |
18,908 |
|
|
impairment charges |
- |
118,001 |
|
|
interest income |
(274,735) |
(247,014) |
|
|
foreign exchange movements |
(9,855) |
57,292 |
|
|
Changes in working capital |
|||
|
trade and other receivables |
(220,685) |
(379,022) |
|
|
trade and other payables |
(7,041) |
8,652 |
|
|
Cash used in operations |
(1,299,084) |
(1,208,592) |
3 Dividend
The Directors do not recommend the payment of a dividend.
* * ENDS * *
For further information visit www.stratexinternational.com or contact:
|
David Hall / Bob Foster |
Stratex International Plc |
Tel: +44 (0) 20 7830 9650 |
|
Tim Metcalfe/ Martin Davison |
Hanson Westhouse Limited |
Tel: +44 (0) 20 7601 6100 |
|
Jason Bahnsen |
Fox Davies Capital |
Tel +44 (0) 20 7936 5230 |
|
Isabel Crossley/ Felicity Edwards |
St Brides Media & Finance Ltd |
Tel: +44 (0) 20 7236 1177 |
Related Shares:
Oriole Resources