Update on sale of Muratdere project

Stratex International Plc / Index: AIM / Epic: STI / Sector: Mining

28 November 2012

Stratex International Plc

("Stratex" or the "Company")

Update on sale of 51% of Muratdere porphyry copper-gold project, Turkey

Highlights

·; Final documentation completed and sales proceeds of US$1.7 million cash for 51% of Muratdere Madencilik ("Muratdere") placed into escrow

·; Release of the payment from escrow conditional only on formal confirmation of the transfer of the Forest Permits relating to each licence, which is the final condition to be met

·; Lodos, the purchaser, continuing its earn-in, pending release of funds from escrow, by commencing a minimum of 3,000 metres of drilling

·; The first of two payments of US$250,000 each to Stratex also to be made upon release of the funds from escrow

·; The initial investment of US$1.3 million by Stratex should return US$2.2 million cash plus 30% retained interest in substantial project, post feasibility study

Christopher Hall, Chairman of Stratex, commented "We are very pleased to have made this significant step towards completion of the Muratdere transaction. Whilst it represents a small part of our assets, it is a successful example of our business strategy, to generate returns for shareholders, without financing projects to production ourselves.

Muratdere was a non-core asset which was put on the back burner by the company in 2007 following some modest copper and gold drill intersection results, with some by-product credits, which at the time were considered to be of borderline economic grade. We re-activated the project in 2010 after a sustained rise in metal prices but chose to find a partner to develop the deposit, given our extensive commitments elsewhere.. Our initial partner, Aydeniz Group, failed to complete its earn-in commitments but our new partner, Lodos, has proved to be an excellent alternative.

Stratex completed 4,500 metres of drilling on Muratdere for a total investment of US$1.3 million. We are now set to receive US$1.7 million, currently in escrow, pending some administrative changes to the licences, for selling a 51% holding in the project. Our partners have notified us of their intention to earn a further 10% through a drill programme that should generate two further payments of US$0.25 million each, within 15 months, bringing total receipts to US$2.2 million. If they then choose to increase their interest to 70% by completing a feasibility study, we would still retain a 30% interest in this substantial copper-gold porphyry project.

We are pleased to have agreed with Lodos a mechanism to proceed with evaluation of the project that avoids any further delays in satisfying the licence conditions. We share their view that there is considerable exploration upside and have been impressed by their thorough and professional approach to the due diligence, check drilling and documentation."

Further information

Stratex International plc, the AIM-quoted exploration and development company focussed in Turkey, East Africa and West Africa, is pleased to announce that, following the successful completion of its due diligence on the Company's Muratdere porphyry copper-gold-molybdenum project in Turkey (press release dated 30 July 2012) and the subsequent completion of the majority of the conditions precedent, Lodos Maden Yatırım Sanayii ve Ticaret A.Ş. ("Lodos") has now placed US$1.7 million in an escrow account to facilitate the purchase of 51% of the project holding company Muratdere Madencilik Sanayi ve Ticaret A.Ş. ("Muratdere"). The only remaining condition to be satisfied to facilitate release of the payment from escrow is the award and transfer of the Forest Permits for each licence. It is understood that the processing of such transfers may be delayed as a result of a new Governmental Decree, which changes the approval mechanism throughout the Governmental Hierarchy and the corresponding backlog of applications being dealt with by the appropriate authorities. Consequently, in order to allow Lodos to move to the next stage of drilling and ultimately payment of a further two tranches of US$250,000 each to increase its interest to 61% of Muratdere, the consideration for the 51% sale has been put into escrow. Lodos can increase its interest from 61% to 70% by funding and completing a feasibility study.

If the remaining condition precedent has not been met within two years, the escrow payment will be released back to Lodos and Stratex will resume 100% ownership of Muratdere. Stratex will reimburse Lodos with 50% of agreed project expenditure incurred during the intervening period.

In the meantime Lodos has now provided Stratex with the "Drilling Notice", formally declaring its intent to exercise its option to acquire a further 10% of Muratdere and to commence the minimum requirement of 3,000 m of drilling. The first tranche of US$250,000 will also be paid to Stratex as soon as the remaining condition precedent has been satisfied.

Lodos is the wholly-owned subsidiary of Turkish investment company Pragma Finansal Danışmanlık Ticaret A.Ş.

The terms of the joint venture are as follows:

·; Lodos purchases 51% of Muratdere for US$1.7 million in cash

·; Lodos may acquire a further 3% of Muratdere by making a cash payment to Stratex of US$250,000

·; Lodos may then acquire a further 7% of Muratdere by funding a further 3,000 metres of diamond drilling and making an additional cash payment to Stratex of US$250,000 within 15 months of the date of acquisition of 51% of Muratdere

·; Thereafter Lodos can acquire a further 9%, for a total of 70%, by funding a comprehensive feasibility study to be completed within a further twelve months

·; Upon Lodos vesting at 70%, all subsequent costs to be shared pro rata by Lodos and Stratex Gold AG, a wholly-owned subsidiary of Stratex

·; In the event that either party does not contribute, its equity interest will be reduced to a 1.2% royalty according to a standard contribute-or-dilute formula as defined by expenditures

The Muratdere copper-molybdenum-gold porphyry deposit has a JORC-compliant Inferred Resource of 51 million tonnes grading 0.36% copper ('Cu'), 0.12 g/t gold ('Au'), 2.40 g/t silver ('Ag'), 0.0125% molybdenum ('Mo'), and 0.34 ppm rhenium ('Re') - see press release dated 15 June 2011.

For more information on the Muratdere project, please visit:

http://www.stratexinternational.com/operations/exploration/turkey/muratdere.aspx 

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For further information please visit www.stratexinternational.com, email [email protected], or contact:

Notes to editors:

Stratex International is an AIM-quoted exploration and development company focussed on gold and high-value base metals in Turkey, East Africa and West Africa. Since listing on AIM in 2006, Stratex has had an impressive track record of successful exploration supported by joint-venture partnerships, both with major international mining companies and local companies to maximise the potential of its discoveries.

It currently has a substantial portfolio of projects, with Altıntepe in Turkey scheduled for gold production in 2013. To date Stratex has discovered more than 2.2 million ounces of gold and 7.9 million ounces of silver, as well as 186,000 tonnes of copper.