BUY
Stratex International
(STI)
Maintained
3 March 2010
52-wk Range: 1.75-4.63p Market Cap (M): £10.4
12 month target £0.07 EV (M): £7.8 Mining
Increasing gold resources
Summary
Stratex is an exploration company currently
focussed on its gold and base metals targets in
Turkey.
These include a 0.5Moz resource at
Altintepe and highly prospective grass roots
projects such as Oksut.
Key Metrics
Shares Outstanding (M): 286.8
Current Price (GBp): 3.63p
Event
Stratex has announced a preliminary in-house resource estimate at its Oksut project,
a high-sulphidation gold discovery located in the Central Anatolian region of Turkey.
The resource, which relates to the Ortcam zone, the first zone to be drilled and totals
147,814oz grading 1.21g/t with a cut-off grade of0.2g/t for all categories.
Stratex is
currently exploring the Oksut project in tandem with its joint venture/option partner.
Centerra Exploratio B.V.
a wholly owned subsidiary of Centerra Gold Onc.
Comment
This is an oxide gold resource, estimated to JORC standards, with 86% of the gold
being in the Indicated category with the balance in the Inferred category.
In total, the
indicated resource amounts to 2.88Mt grading 1.38g/t and containing 127,825oz of
gold.
The inferred category contains 927,970t grading 0.67g/t and containing
19,989oz of gold.
The gold is contained in steeply dipping breccia pipes that exhibit
intense oxidation down to depths od 100m.
Despite the conservative approach to rsouce estimation, Stratex has added 45oz of
gold to its resource invebtory for every metre drilled at Oksut.
The down-dip extension of the Oracam Zone and a further four zones of
mineralisation containing anomalous values are currently the subject of detailed
evaluation by the Stratex-Centerra team with a view to prioritising the 2010 drilling
programme.
Whilst the near surface oxide resource sare expected to be expanded by this
ongoing drilling, the real uside to the project is the potential to identify a substantial
sulphide sulphide gold resource associated with porphyry-style mineralisation below
the ancient volcanic centre.
Recommendation
We retain our Buy recommendation with an unchanged target price of £0.07.
FYE Dec 2008 2009E 2010E 2011E 2012E
Revenue (£M): 0.3 0.1 0.1 4.9 13.7
EBITDA (£M): -1.3 -1.3 -1.3 2.4 8.7
NPAT (inc significant items): -0.9 -1.2 -1.3 1.4 6.6
EPS (GBp): -2.5 -0.5 -0.4 0.7 2.7
Cash Flow/Share (GBp): -0.6 -0.5 -0.4 0.7 2.7
Gold Price (US$/oz): 872.6 936.5 1075.0 1100.0 875.0
Contact
Peter Rose
+44 (0)207 936 5246
Disclaimer
This is a marketing communication.
It has not been prepared in accordance with legal requirements
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Non-US research analysts who have prepared this
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Stratex International
3 March 2010 Page 2
Research Disclosures
Peter Rose
Peter Rose has 20 years experience in equities as a resources analyst, most recently having spent 11 years with Deutsche Bank in
Australia.
Prior to this he spent three years with Prudential Bache and five years with James Capel.
Peter"s industry experience
includes 16 years as a metallurgist, three years with De Beers in South Africa and eight years in the uranium industry, five of
which were spent at the Ranger Uranium mine.
Peter holds a BSc degree in Applied Mineral Science from Leeds University UK
and a Bachelor of Commerce from the University of South Africa.
Peter is also a member of the Institute of Mining & Metallurgy
and a chartered engineer.
+44 (0)207 936 5246
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Stratex International
3 March 2010 Page 3
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Stratex International (STI) 7
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Stratex International
3 March 2010 Page 4
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Fox-Davies Capital Coverage
Fox-Davies corporate client & coverage universe as of 03 March 2010:
Company Ticker Recommendation Date Target Price Last Price
Mining
Angel Mining ANGM LN Equity BUY 03.03.10 £0.16 £0.09
Atlantic Coal ATC LN equity BUY 21.01.10 £0.025 £0.005
Discovery Metals DME LN Equity BUY 01.02.10 £0.72 £0.40
EMED Mining EMED LN Equity BUY 16.02.10 £0.62 £0.12
Exco Resources EXS AU Equity BUY 18.01.10 A$0.65 A$0.25
Gippsland Limited GIP LN Equity BUY 06.10.09 £0.02 NA
Hambledon Mining HMB LN Equity HOLD 12.02.10 £0.16 £0.04
Highland Gold HGM LN Equity BUY 11.02.10 £1.24 £1.03
Hochschild Mining HOC LN Equity HOLD 20.01.10 £3.26 £2.71
KEFI Minerals KEFI LN Equity Spec.
BUY 06.10.09 NA £0.02
Kryso Resources KYS LN Equity BUY 18.01.10 £0.28 £0.12
Lydian International LYD CN Equity BUY 18.10.10 C$1.76 C$0.69
Minera IRL MIRL LN Equity BUY 20.01.10 £1.06 £0.66
Oxus Gold OXS LN Equity BUY 12.02.10 £0.12 £0.07
Stratex International STI LN Equity BUY 03.03.10 £0.07 £0.04
Stratex International
3 March 2010 Page 5
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