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Stratex Int PLC (STI)

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Thursday 01 March, 2018

Stratex Int PLC

IAMGOLD Enters into Option Agreement on Dalafin

RNS Number : 4357G
Stratex International PLC
01 March 2018
 

 

Stratex International Plc

 

('Stratex' or 'the Company')

 

IAMGOLD Enters into Option Agreement on Dalafin

 

Stratex, the AIM-quoted gold-focused exploration and development company in Turkey and Africa, is pleased to announce that it has concluded an option earn-in agreement (the 'Agreement') with AGEM Senegal Exploration Suarl ('AGEM'), a wholly-owned subsidiary of IAMGOLD Corporation ("IAMGOLD"), in respect of the Dalafin gold project (the 'Project') in Senegal.

 

Highlights

 

-     Stratex EMC SA ('Stratex EMC'), the Company's 85%-owned Senegalese subsidiary, has entered into the Agreement with AGEM. Under the terms of the agreement:

 

AGEM will have the right to acquire an initial 51% interest in Dalafin by expending US$4m over 4 years at the project (the 'First Option'), potentially diluting Stratex's interest to approximately 41.65%;

Subject to the First Option being exercised by AGEM, AGEM and Stratex EMC may agree to form a joint-venture ('JV') company for the management of Dalafin;

AGEM has the option to increase its interest by a further 19%, to 70%, by expending a further US$4m at the project over the subsequent 2 years (the 'Second Option'), potentially diluting Stratex's interest to approximately 25.5%;

Thereafter, AGEM and Stratex EMC will be required to contribute on a pro rata basis towards the Project, or will be diluted. Should either party be diluted below 10%, their interest will convert to a 2% Net Smelter Returns ('NSR') royalty (the 'Royalty') on production from Dalafin, of which AGEM will retain the right to buy-back 0.5% of the Royalty for consideration of US$0.5m (thereby reducing the Stratex EMC royalty to 1.5%);

Subject to governmental approval in Senegal.

 

-     IAMGOLD will focus the exploration work initially on the Madina Bafé prospect which is contiguous with IAMGOLD's Boto gold project, where they have defined Indicated and Inferred Resources of 2.52 million ounces grading 1.61 g/t Au (inclusive of Proven and Probable Reserves of 1.4 million ounces grading 1.64 g/t Au).

 

 

 

Tim Livesey, CEO of Stratex, commented:

 

"Following a project review in 2017, we reported that whilst we believed there was still exploration upside at Dalafin, we were not prepared to commit further funding and that seeking a joint-venture partner to progress exploration would be the best route for all stakeholders. We are therefore delighted to have delivered on this agreement, with such a high-profile company, to fast-track exploration at Dalafin whilst minimising our financial exposure. IAMGOLD produces 800,000 gold ounces per annum, has an extremely good reputation in West Africa and we look forward to working with them and to developing a broader strategic relationship in the region."

 

 

 

 

 

Project Information

 

Located in south-eastern Senegal, the 472.5 sq km Dalafin licence is positioned in the centre of the Birimian-age Kédougou-Kenieba gold belt that extends from eastern Senegal into western Mali and has already seen multiple major gold discoveries, including IAMGOLD's Boto gold project.

 

The Company currently owns 85% of the Project through its Senegal-registered operating company Stratex EMC, with the remaining 15% being held by its local private Senegalese partner Energy & Mining Corporation S.A. ('EMC').

 

To date, four main targets, Faré, Baytilaye, Saroudia, and Madina Bafé, have been confirmed by a variety of drilling methods, with the greatest potential having been identified at Faré and Madina Bafé.

 

Best results from diamond and RC drilling programme at Faré include 7 m @ 86.39 g/t Au from 19m (FARC-007) (Announcement dated 18 December 2013), 14m @ 2.94 g/t Au from 11.1m incl. 3 m @ 10.47 g/t Au and 96 m @ 1.51 g/t Au from 4.1m incl. 10m @ 5.07 g/t Au (FADD-002) (Announcement dated 19 February 2014), ,19.5 m @ 1.08 g/t Au from 93.4m (FADD-021) and 23.5 m @ 1.41 g/t Au from 6m (FADD-023) (Announcement dated 19 May 2014). Potential for strike extension of the mineralisation to the north remains.

 

At Madina Bafé, trenching, mapping, and sampling programmes have confirmed the presence of a 1,200 m x 30-45 m NE-striking mineralised zone in the south-east of the prospect, with mineralisation comprising sheeted tourmaline-quartz veins and quartz-tourmaline breccias. RC and diamond drilling has returned excellent intersections including 9.6 m @ 16.08 g/t Au and 1.5 m @ 2.84 g/t Au (MBDD-002) that indicate depth-continuity of the zone (Announcement dated 16 July 2014). Mineralisation remains open to the east.

 

IAMGOLD's initial focus will be on the southernmost Madina Bafé prospect, which is contiguous with its Boto project that has a resource of 2.52 million ounces of gold averaging 1.61 g/t Au. The work programme will primarily look to prove the continuity of high-grade mineralisation at depth and along strike, with the intention of developing resources for either a stand-alone deposit(s) or satellite deposits for Boto. Exploration may also be extended to other areas within the licence, including Faré, where the majority of work to date has been focused.

The Project has a carrying value of £6.48M in the Company's balance sheet as at 31 December 2017 (2016: £6.28M) and the Company incurred no expenditure on the Project in the year to 31 December 2017 (2016: £323,787).

Further Details on the Agreement

 

Stratex EMC has signed an option agreement with AGEM for the potential purchase of an interest in the Dalafin Project. Under the terms of the Agreement, AGEM will earn-in to an initial 51% interest in the Project by expending US$4m over 4 years as per the following schedule:

 

-     US$0.5m on or before the first Anniversary Date;

-     Aggregate Expenditures of US$1.5m on or before the second Anniversary Date;

-     Aggregate Expenditures of US$2.5m on or before the third Anniversary Date; and

-     Aggregate Expenditures of US$4m on or before the fourth Anniversary Date.

 

Subject to the First Option being exercised, the AGEM and Stratex EMC may agree to form a local JV company, comprising two representatives of each party, that would hold and operate the Project. Upon formation of the JV company, AGEM will become the operator and has the further option to increase its interest to 70% by expending an additional US$4m over the subsequent 2 years.

 

Subject to the Second Option being exercised, each of AGEM and Stratex EMC will be required to contribute on a pro rata basis, or will be diluted. Should either party be diluted below 10%, their interest will convert to a 2% NSR royalty on production from Dalafin. AGEM will have the right to purchase one quarter of the Royalty (0.5%) by giving a notice to that effect, together with a cash payment to the Stratex EMC of US$500,000. Should AGEM exercise this right, the Royalty due to Stratex EMC will accordingly be reduced to 1.5%.

 

The Agreement is subject to the receipt of governmental approval from the Ministry of Industry and Mines in Senegal and a further announcement on receipt of such approval will be made in due course.

 

 

For more information on the Project, including a map, please visit http://www.stratexinternational.com/project/dalafin.

 

** ENDS **

 

 

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Following the publication of this announcement, this inside information is now considered to be in the public domain.

 

For further information please visit www.stratexinternational.com, @StratexPLC on Twitter, 

or contact:

 

 

Stratex International Plc

Tel: +44 (0)20 830 9650

Tim Livesey / Claire Bay




Camarco (IR/PR Contact)

Tel: +44 (0)20 3757 4980

Gordon Poole / Nick Hennis / Monique Perks




Grant Thornton UK LLP

Tel: +44 (0)20 7383 5100

Samantha Harrison

Hannam & Partners

Tel: +44 (0)20 7907 8500

Neil Passmore / Andrew Chubb




 

Notes to Editors:

 

Since listing in 2006, Stratex has discovered more than 2.2 million ounces of gold and 7.09 million ounces of silver, as well as 186,000 tonnes of copper. The Company owns an exciting exploration project in Senegal and 14.87% of a copper-gold project at feasibility stage in Turkey, which will likely default to a 1.2% (post-Turkish tax) royalty position within the next 3 months. The Company also has significant interests in Thani Stratex Resources Ltd and Tembo Gold Corp. for their exploration projects in Djibouti and Egypt, and Tanzania respectively. The Company is currently pursuing value-accretive opportunities within its existing portfolio as well as identifying new value-appropriate projects in Africa and Europe.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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