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Presentation on theme: "STRATEX IN DJIBOUTI – A CASE HISTORY"— Presentation transcript:

DAVID J. HALL – Executive Director

2 Disclaimer These presentation slides (the “Slides”) do not comprise an admission document, listing particulars or a prospectus relating to Stratex International plc (“the Company”) or any subsidiary of the Company, do not constitute an offer or invitation to purchase or subscribe for any securities of the Company and should not be relied on in connection with a decision to purchase or subscribe for any such securities. The Slides and the accompanying verbal presentation do not constitute a recommendation regarding any decision to sell or purchase securities in the Company. The Slides and the accompanying verbal presentation are confidential and the Slides are being supplied to you solely for your information and may not be reproduced or distributed to any other person or published, in whole or in part, for any purpose. No reliance may be placed for any purpose whatsoever on the information contained in the Slides and the accompanying verbal presentation or the completeness or accuracy of such information. No representation or warranty, express or implied, is given by or on behalf of the Company, Northland Capital Partners Limited or their respective shareholders, directors, officers or employees or any other person as to the accuracy or completeness of the information or opinions contained in the Slides and the accompanying verbal presentation, and no liability is accepted for any such information or opinions (including in the case of negligence, but excluding any liability for fraud). Any decision in connection with the purchase of shares in the Company must be made solely on the basis of the information contained in the Company’s Admission Document dated 22 December 2005 and any other publicly available information relating to the Company. Accordingly, neither the Company nor its directors makes any representations or warranty in respect of the contents of the Slides. The Slides contain forward-looking statements, which relate, inter alia, to the Company’s proposed strategy, plans and objectives. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such forward-looking statements. Accordingly, you should not rely on any forward-looking statements and the Company accepts no obligation to disseminate any updates or revisions to such forward-looking statements. The Slides and their contents are directed only at persons who fall within the exemptions contained in Articles 19 and 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (such as persons who are authorised or exempt persons within the meaning of the Financial Services and Markets Act 2000 and certain other persons having professional experience relating to investments, high net worth companies, unincorporated associations or partnerships and the trustees of high value trusts) and persons to whom distribution may otherwise lawfully be made. Any investment, investment activity or controlled activity to which the Slides relates is available only to such persons and will be engaged in only with such persons. Persons of any other description, including those that do not have professional experience in matters relating to investments, should not rely or act upon the Slides. 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Accordingly, subject to certain exceptions, the Shares may not, directly or indirectly, be offered or sold within Canada, Australia, Japan, South Africa or the Republic of Ireland or offered or sold to a resident of Canada, Australia, Japan, South Africa or the Republic of Ireland. The Securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “US Securities Act”) or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered or sold within the United States or to, or for the account or benefit of, any US Person as that term is defined in Regulation S under the US Securities Act. The Company has not been registered and will not register under the United States Investment Company Act of 1940, as amended. The Slides and their contents are confidential and should not unless otherwise agreed in writing by Northland Capital Partners Limited be copied, distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person. Northland Capital Partners Limited has not authorised the contents of, or any part of, the Slides and no representation or warranty, expressed or implied, is made by as to any of its contents. MAY 2013

3 Overview WHO IS STRATEX ?
Focussed on exploration and development of gold and high-value base metals, AIM-quoted STRATEX INTERNATIONAL is active in Turkey, East Africa and West Africa and, in the seven years since it was listed, has discovered more than 2.2 million ounces of gold and 7.9 million ounces of silver. The Company has a successful track record in forming joint-venture partnerships with both successful local private companies and major international mining companies, including Antofagasta, Centerra and Teck in Turkey, and Thani Ashanti in East Africa. Company Value - £24 Million Company cash - £17.5 Million 3

4 Redefining Exploration Success
Stratex in Djibouti – invested over US$1.5 million to date October 2009: Stratex discover epithermal gold in Afar in Ethiopia. January 2010: First visit to Djibouti – meet with HE President Ismail Omar Guelleh May 2010: Sign agreement for 5 EEL’s with Minister Moussa Bouh October 2010: Field review with Dr. R. Sillitoe, world renowned consultant Joint venture with Thani Ashanti – introduce one of world’s largest gold mining companies into Djibouti June 2011: New Minister Natural Resources - Fouad Ahmed Aye February 2012: Pandora discovery Oklila EEL June 2012: Exploration suspended by Minister Fouad September 2012: Work recommences April 2013: New Minister #3 – HE Ali Jacoub Mahamoud 4

5 Stratex-Thani Ashanti Joint Venture
Thani Ashanti – joint venture company (50:50) between Thani Group of Dubai and AngloGold Ashanti – world’s 3rd largest gold mining company. Thani Ashanti funded first US$1.4 million to earn 51% of Stratex projects in Djibouti Thani Ashanti now investing US$4 million per EEL to earn 70%. Standard industry joint venture sharing early stage exploration risk NOTE Exploration HIGH RISK – no guarantee of economic success Djibouti no domestic mining industry Stratex initially identified potential for gold mineralization View shared by Thani Ashanti Number of early stage discoveries to be tested by first pass drill programmes in 2013

6 The Exploration-Mining Value Curve
The E & D Business  The Mining  Business VALUE Resource definition US$10M Pre-feasibility To Feasibility US$30M Construction US$200M High risk Exploration US$1M to US$20M No cost to Djibouti POSITIVE FEASIBILITY LONG TERM VALUE ADDED For countries and companies Stratex-Thani-Ashanti At this point FINANCING & START-UP CONSTRUCTION PROBLEMS In recent times the brokers and markets have focused on the mining business……when will you be in production? Is the frequent question…………how much resources and reserves do you have? Not how far along are you in discovering major deposit? How many exploration projects have you in your portfolio? What is needed is the possibility of a major ore body that can be quickly and DECISIVELY tested. E&D is where the most value is added – one drill hole could define a billion dollars of metal……………..and also the low risk end. TIME Discovery Development Production

7 Key Factors for Attracting Investment
Public policy factors that encourage or discourage investment include: uncertainty concerning the administration of current regulations and environmental regulations; regulatory duplication; the legal system and taxation regime; uncertainty concerning protected areas and disputed land claims; Infrastructure; Socioeconomic and community development conditions; trade barriers; political stability; labour regulation; quality of geological database; and security, labour and skills supply, corruption and uncertainty.

8 What would a New Gold Mine mean to Djibouti?
TARGET 2 Million Ounce Contained Gold Deposit In-situ value at US$1500/oz = US$3 Billion Capital expenditure to build mine US$200 million Production of 200,000 oz / annum at total production cost of US$1000/oz Gross annual cash flow US$100 million Djibouti state 5% plus 2% royalty = US$7 million per year Djibouti tax revenues at 35% = US$35 million per year Total of potential US$42 million per year direct income to Djibouti PLUS employment, training, school and medical support for mine ALL FINANCIAL RISK TAKEN BY THANI ASHANTI / STRATEX SUCCESS BENEFITS EVERYONE - Republic of Djibouti, local population through employment, development of infrastructure, etc.

9 Pandora Prospect, Oklila Licence, Djibouti

10 Pandora, Afar Project g/t Au (P-CH-30) KEY g/t Au (P-CH-29) Early channel sampling over main 1,500 m vein has identified wide gold- mineralised zones with multiple higher-grade intervals Follow-up drilling anticipated Q3/Q – timing dependent on logistics 11.91 g/t Au over 2.60 m (P-CH-22) 20.35 g/t Au over 1.90 m (P-CH-17) 15.42 g/t Au over 1.65 m incl g/t Au over 0.50 m (P-CH-4) ) g/t Au (PS-CH-3) 65.7 g/t Au g/t Au (PS-CH-4) High-grade zones 10

11 Drilling – Key to Exploration Success
Drilling - US$180 per metre m = US$900,000 Assays for gold, silver and other elements US$35/sample = US$175,000 Plus camp support - US$500,000 Local labour First testing drill programme to cost excess of US$1,575,000

12 The Next Steps in Djibouti

13 Thank You!


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