As part of the Company's stated objective to minimise risk during exploration, and develop key projects towards production with companies having the appropriate technical and financial capability, the Company has now entered into the following joint-venture agreements, strategic alliances and strategic investments. This strategy of de-risking key projects, both financially and technically, has allowed Stratex to move forward, confident that we are managing in the best way possible, a portfolio that will take us towards gold production, provide the opportunity for sharing in the considerable upside potential of key exploration projects, and the flexibility to continue developing new exploration concepts and projects alongside partners and in its own right.
In February 2015, Stratex announced a joint-venture agreement with Anadolu for the Karaağaç project. Anadolou will spend up to US$1.5 million on exploration and drilling at the Project within two years and will pay Stratex US$500,000 cash if a minimum JORC-compliant indicated resource of 50,000 oz gold is confirmed for the Project within the Exploration Period, plus a 1.5% net smelter returns royalty on any future mineral production.
In May 2011, Stratex signed a Strategic Alliance Agreement with Antofagasta Minerals S.A., a subsidiary of a leading global copper producer Antofagasta plc, to undertake exploration for copper and copper-gold deposits in Turkey outside of the Company's existing licence areas.
Under the terms of the Agreement, Antofagasta funded an initial target-generation and exploration programme over a 16-month period expending US$1 million. Target-generation work undertaken after completion of the initial 16-month programme is done so at the cost of Antofagasta, by funding both desk-based and follow-up reconnaissance exploration work to the amount of at least US$250,000 for each subsequent year that the Alliance is extended. Any priority areas identified for detailed follow-up exploration, which may include drilling, are defined as Designated Properties ('DP'). DPs are initially vested 51% Antofagasta and 49% Stratex; Antofagasta has the option to earn a further 19% of any DP by expending an additional US$3 million on that DP, for an aggregate interest of 70%.
On 6th December 2011, the Company signed a Heads of Agreement to enter into a joint venture with private Turkish mining company Bahar to advance the 490,000 oz Altintepe oxide-gold project in northern Turkey to production.
Stratex subsequently transfered the two Altintepe licences to Altintepe Madencilik, a wholly-owned company of Stratex Gold AG, which in turn is wholly owned by Stratex International plc, and Bahar paid Stratex US$250,000.
Following the completion of an Environmental Impact Study and a Feasibility Study, Bahar has vested at 55% of Altintepe Madencilik and has commenced site clearance to facilitate construction.
Teck Resources Limited retains an underlying 1.5% Net Smelter Return ('NSR') royalty from any future production. One of the two projects is also held by a third party that holds a NSR royalty of 2.5 % which can be reduced to 1.25 % by a payment of US$ 750,000.
The Company signed a joint venture agreement with North American gold mining major Centerra on 13 August 2009 for the continued exploration and development of the Öksüt project. In November 2012, Stratex announced that, under the terms of the agreement, Centerra had vested at 70% of the project following US$6 million explroation expenditure within five years. On 24th January 2014, Stratex completed the sale of its remaining 30% to Centerra for US$20 million cash and a further US$20 million payable through a 1% Net Smelter Returns (NSR) royalty, capped at 1 million oz, upon commencement of production at Oksut. In December 2015, the Company sold its 1% NSR royalty to Centerra for US$4.5 million net cash.
In 2011, Stratex signed a second agreement with Centerra to advance its Altunhisar project in Turkey (announcement dated 17 May 2011). Following early-stage exploration and expenditure of US$355,000 of a US$500,000 initial earn-in commitment, no significant mineralisation was identified at Altunhisar (announcement dated 30 July 2013) and no further work has been undertaken. Centerra will instead direct the remainder of its initial commitment (US$145,000) towards the Company’s Enez gold project in Western Turkey as part of an amended Agreement with the Company, by 30 June 2014. Two further tranches of US$500,000 by 31 May 2015 and 31 December 2015, respectively, will see Centerra earn-in to 51% of the Project. Subsequent to vesting at 51%, Centerra has the option to earn a further 24% in the Project, taking its interest to 75%, by expending an additional US$2 million over the following two years. Stratex will manage the Project and exploration programme until further notice and has already commenced a soil geochemistry survey over the licence area.
In March 2013, the Company announced a strategic alliance with a subsidiary of Centerra Gold to explore for gold in a defined area in central Turkey. Centerra committed US$500,000 in year one and has the option to fund further work at a minimum level of US$250,000 per annum. Identification and acquisition of exploration targets will be managed by Stratex until further notice.
In December 2011, Stratex entered into a joint-venture agreement with Lodos, a wholly-owned mining investment company of Pragma Finansal Danışmanlık Ticaret A.Ş. ('Pragma', previously referred to as 'InvestCo'), a leading private Turkish financial institution and investment company, for the development of the Muratdere project.
Following the successful completion of a four-month due dilligence by Pragma, comprising confirmatory drilling and metallurgical testwork, a definitive share purchase agreement was signed by Lodos who acquired 51% of the joint venture company, Muratdere Madencilik Sanayi ve Ticaret A.Ş. ("Muratdere Madencilik") for a cash payment of US$1.7 million to Stratex. Lodos vested at 70% of Muratdere Madencilik through two further cash payments of US$250,000 each and the completion of a feasibility study in May 2015.
Since that time the economic environment has continued to deteriorate and the prices of copper and gold have declined. As such, Stratex has decided not to support its pro-rata share of recent project financing and as a result its interest in the project has been reduced to 14.87%. The Company will continue to assess the supply-demand scenario for copper and may consider supporting future work should we believe that the demand for copper and hence the price justifies our participation.
In the event that a party's equity interest falls below 10%, its interest shall be converted to a 1.2% Net Smelter Returns royalty.
In December 2013, Stratex entered into a C$5.95 co-investment with New Africa Mining Fund II and Concept Capital Management Ltd for the exploration and development of Tembo Gold Corporation's 100 sq. km Tembo gold licence, adjacent to Acacia Mining's 14 M oz Bulyanhulu Mine in Tanzania. The Company currently owns 12.89% of the issued share capital of Tembo Gold and this could increase to as much as 22.84% on exercise of matching warrants.
In October 2014, the Company announced that it had completed the formation of a new East and North African-focused exploration and development company, Thani Stratex Resources Ltd, in partnership with Thani Emirates Resource Holdings ("Thani"). Thani and Stratex combined their East and North African assets in the region (including Stratex's Blackrock and Pandora projects) and each contributed US$1.0M of initial working capital towards development of the portfolio. Following subsequent fund raising activities in early 2016, Thani Stratex is owned 32.4% by Stratex, 52.4% by Thani and 15.2% by Resource Capital Fund.
In January 2012, Stratex aquired private UK company Silvrex Limited for their option to earn-in to 75% of EMC's Dalafin Gold Project in south-eastern Senegal.
Following an earn-in to 75% of the project, the Company has now signed an agreement with EMC to acquire 85% through the establishment of a new Senegal-registered operating company Stratex EMC S.A.