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

Stratex International plc

(‘Stratex’ or ‘the Company’)

Final Results

Stratex International plc, the AIM-quoted gold exploration and development company focused on Turkey, East Africa and West Africa, is pleased to announce its results for the year ended 31 December 2015.

The results below are extracted from the Company’s audited financial statements which are available in full at the Company’s web site www.stratexinternational.com. Copies of the Company's Annual Report and Notice of AGM will be sent to shareholders in early April.

Operational Highlights:

· The Company entered a new phase in its existence with the start of production at the Altintepe gold mine in Turkey. Stratex has a 45% interest in the operation and undertook much of the early exploration work at the site. The first gold pour was achieved on 5 November 2015;

· Goldstone Resources Ltd ("Goldstone") (34% owned by Stratex) increased its interest in the Homase licence in Ghana from 65% to 90% on very favourable terms from its joint venture partner Cherry Hill Mining Company. Auger drilling west of the old Homase pit indicated two potentially new zones of mineralisation;

· Our partner Lodos completed a feasibility study at the Muratdere copper- molybdenum- gold project in Turkey as part of its commitment to earn into 70% of the project;

· Stratex’s 1% royalty on the Őksűt gold project, received as part of the consideration for the sale of a 30% interest in 2012, was sold to Centerra, the operator, for US$4.5 million.

Financial Overview:

· The Company and its subsidiaries (the "Group") realised a loss after tax for the year of £638k, which compares with a loss in 2014 of £2.5m;

· Administration costs, which includes all costs associated with exploration operations not capitalised, as well as office overheads, amounted to £2.1m , a 20% reduction over 2014. This reduction reflects the efforts during the year to cut costs across the board;

· The Company’s share of losses of associate companies, i.e. those enterprises where the Company has significant influence, but less than 50%  interest and has little or no management control, amounts to £1.37m , which compares to £86k in 2014. The increase is mainly attributable to Thani Stratex Resources Limited where the Company’s share of losses for the year amounted to £1.2m and includes an impairment write-off of £850k in respect of the Wadi Kareem project in Egypt;

· The sale of the Őksűt royalty generated £3m of cash and a similar amount of profit and resulted in a total cash balance for the Group at 31 December 2015 of £4.1m.

Chairman’s Statement

Stratex achieved some significant objectives in the year ended 31 December 2015, although the political and economic environment in which the mining industry operates continues to be uninspiring.

Mining share price indices have declined significantly, metal prices are weak, dividends are being cut and global economic growth remains patchy. Add to this the risk of terrorist activity from which no country seems immune and it is no surprise that the attitude of investors towards exploration and mining shares remains cool.

Stratex has made further progress in several key areas. Administration expenses, which include the UK, Turkey and Senegal together with 100% of Goldstone’s expenses, which we consolidate, were reduced by almost 20% compared with 2014. Other income of £2.8 million, compared with £190k last year, included the sale proceeds of the Öksüt royalty (US$4.5 million) whilst the share of losses of associates of £1.37 million (a non cash item) was the result of an impairment write-off in Thani Stratex Resources Ltd. The overall loss for the year was reduced to £638k (2014 loss: £2.5 million) resulting in a year end cash balance of £4.1 million.

Key developments during the year included the completion of a feasibility study by our partners Lodos on the Muratdere copper-gold porphyry project in Turkey and, most pleasingly, the first gold pour at our 45% owned gold mine, Altıntepe, in Turkey.

Management efforts at Altıntepe have been focused on overcoming the problems caused by unusually high levels of rainfall, which interfered with the completion of the heap leach pad. Added to the delays brought about by the Turkish permitting regime, we were relieved to see production begin just 12 months later than originally anticipated. Our partners Bahar, who are delivering ore to the crusher under a mining contract, and the Altıntepe management, are now concentrating on forward planning to optimise the development of the remaining parts of the resource.

Once ramp-up is completed in the coming weeks it will allow a clear grip on costs and we look forward to updating the market on the technical and economic parameters of the operation. In the meantime, it has to be borne in mind that Stratex’s financial investment in the mine to date is comfortably less than US$2m whereas our partners have financed the entire operation, to the tune of more than US$40m. We remain confident that we will see a recurrent cash flow in the current year.

The Muratdere feasibility study, completed in March 2015, used a base copper price of $5,580/t and generated acceptable levels of return. The project is sensitive to the copper price and later in the year we were able to revisit the economics, having reviewed some of the operating parameters using a slightly higher price.

Since that time the price of copper and other metals has weakened and is currently US$4,699/t. In order to maintain its 30% interest, Stratex was required to invest further significant sums in project development, detailed engineering, permitting and the operating costs of the joint-venture company. At the present time the projected economics do not meet Stratex’s investment criteria and as a result your Board has decided not follow its investment and has therefore accepted a dilution of its interest to 14.9%. We will continue to assess the supply-demand scenario for copper and may consider supporting future work to prevent further dilution, should we believe that the demand for copper, and hence the price, justifies our participation, bearing in mind that dilution below 10% will lead ultimately to a royalty position under the terms of the agreement. This would be a disappointing development but we would prefer to concentrate on opportunities where we have management control.

In 2012, Stratex sold a 30% residual interest in its 1.0 million oz Őksűt gold discovery in Turkey to partner Centerra. In addition to a US$20 million cash payment, we also received the right to a 1% royalty capped at US$20 million. Since that time Centerra published a feasibility study showing the production profile. With a lower gold price it was clear that we were unlikely to receive the full US$20 million and that although production was set to commence in 2017, uncertainty remained regarding the start and size of any payments. Your Board decided to sell the royalty, and contacted a number of potential buyers, including Centerra. Various offers were received but in the end the one-off, unconditional cash payment from Centerra was found to be the most acceptable. As a result net proceeds of US$4.5 million were banked in December.

In common with most junior explorers, Stratex has had to balance the need for meeting work commitments and moving prospects forward, with conservation of limited cash balances. Some positive results were obtained at Dalafin in Senegal and, indirectly, at Homase/Akrokerri in Ghana and through Thani Stratex Resources in Egypt and Djibouti. Little progress was made by Tembo Gold Corp in Tanzania where the management was concentrating on project maintenance and obtaining support from new investors.

Much management time and effort has been invested in the identification and evaluation of merger and acquisition targets in line with our stated policy thus by-passing or accelerating the traditional exploration process. These were likely to involve “stranded assets” either because they were non-core, apparently uneconomic, or due to lack of finance. It was felt that with a new approach, possibly on a less ambitious scale, and with a strong operating partner, they could be developed economically within two years. We have been in advanced negotiations for the acquisition of several such projects during the year, however, we have so far been unable to close an acquisition on terms which met our investment criteria.

The continuing depressed conditions in the junior mining sector, which have outlasted the expectations of most commentators, are playing into the hands of companies like Stratex. We have an outstanding record of exploration success; an ability to turn that success into cash; an aversion to equity issues to finance overheads; a virtually carried 45% interest in a producing gold mine, and a healthy cash balance.

The quest for more rapid growth by acquisition will continue whilst market conditions favour that strategy and we remain optimistic of success, with a focus on West Africa.

We would like express our gratitude to John Cole-Baker who retired from the Board on 31 March 2015 but will continue to provide support to the management of our operations in West Africa.  On 1 February 2016, Chris Worcester was appointed to the Board as an independent non-executive director, bringing a wealth of corporate finance expertise, enhancing our ability to grow as planned by acquisition.

Since the year end, we have also seen the resignation of the Managing Director of Goldstone. He has been replaced, as interim Chief Executive Officer, by Emma Priestley, a director of Stratex, who will not participate in any discussions regarding Goldstone at Stratex Board meetings.  She will continue to work on the strategic review of Goldstone’s assets to find the optimum way forward for the company in this difficult market.

Looking forward, the outlook for the industry is far from rosy. Nevertheless Stratex is better placed than many of its peers. We continue to seek to reduce overheads and are making progress with this in Turkey, Senegal and with Goldstone. Production at Altıntepe is expected to develop into cash flow and the Board and management are redoubling efforts to find a new project which will increase and diversify our cash flow. These efforts have been reflected in the share price since the turn of the year and we hope that this improved market recognition is set to continue.

Christopher Hall

Non-Executive Chairman

8 March 2016

Financial Statements

Statement of consolidated comprehensive income

Statement of consolidated financial position

Statement of consolidated changes in equity