Oriole Resources Regulatory News (ORR)

10 Mar 2008 07:01

Stratex International PLC10 March 2008 Stratex International Plc / Index: AIM / Epic: STI / Sector: Mining 10 March 2008 Stratex International Plc, ("Stratex" or the "Company") Final Results Stratex International Plc, the AIM quoted international exploration anddevelopment company currently focusing on gold and base metal opportunities inTurkey, announces its results for the year ended 31 December 2007. HIGHLIGHTS • Initial gold resource at Inlice defined and at a cost of less than US$2 per ounce; • Teck Cominco exercise back-in right early on Konya projects; • £7 million fund raising and issue over-subscribed; • Altintepe: early encouraging results and aim to substantially increase on current 311,543 oz resource. CHAIRMAN'S STATEMENT 2007 has been an excellent year for the Company. We have grown our gold resourcebase from zero to over 800,000 ounces, which we aim to further define andincrease in the coming year. In addition, given that the gold price was US$688when we announced the Inlice resource and is now above US$975, the value of theCompany has increased both through resource addition and through the price ofthe product. In May 2007 we advanced the Inlice gold discovery to an initial ore resourceestimation of 372,971 contained ounces of gold. The discovery rate and cost atInlice is something we are very proud of; 97 ounces per metre drilled and lessthan US$2 per ounce. Work has progressed at Inlice with further drilling aimed at increasing thelevel of confidence of the resource as well as scoping studies on metallurgy andan initial environmental study. It is our intention, along with our strategicpartner, Teck Cominco Limited ("Teck Cominco"), to review all of thisdevelopment work and plan the future path for Inlice accordingly. The Inlice discovery was the catalyst for the definition of the Konya district.Your Company proved the concept that the Konya volcanics are host to large areasof lithocap (areas of altered rock commonly associated with porphyry andepithermal gold deposits). This was done at a cost of some US$150,000. The workalso convinced Teck Cominco Limited's Turkish subsidiary, Teck Cominco Arama veMadencilik San. Tic. A.S.,to exercise back-in rights on three of the fourprojects at greater than the 2.5 times expenditure. The option to earn 51% byexpending US$3 million over three years was a significant uplift on the value ofour asset at such an early stage. The Konya play has been aggressively pursued since the agreement, with thecompletion of an airborne magnetic geophysical survey, detailed stream sedimentsampling and soil grids, mapping of major silica zones as well as scout drilltesting of the Doganbey porphyry gold system. As you can imagine, this isgenerating large volumes of data and we are working closely with Teck Cominco onintegrating this data into a state-of-the-art Geographic Information System andapplying latest geological models to aid target definition. The Company's success was recognised by the market in July when we closed a £7million placement when had hoped to reach £5 million. Even then we wereoversubscribed! Whilst Konya has been a key focus for us, Stratex is not a company to standstill and has a number of other very exciting projects underway at variousstages of development. At the Altintepe project in north-eastern Turkey, we aregetting encouraging results where a substantial resource of 311,543 oz goldalready exists. The target is to increase this resource with focus on easilytreatable oxide material whilst still exploring for the ultimate dream 2 millionounce, US$1.9 billion in-situ blockbuster discovery! We continue to gather ideas from current projects to aid development, which weare using in tandem with our in-house knowledge base to define new areas whereStratex can make discoveries and add value to the Company. We have been lookingat other areas in Turkey with similar geology to that of Konya and we are usinggeological models for porphyry gold and high-sulphidation mineralisationtogether with our in-house geochemical and alteration databases to assist inprioritising these areas. The early stages of this work, something we are nowcalling "Proof of Concept", is not market news but you will hear a lot morethrough the coming year as we develop these targets and advance them to drilldefinition stage. We are now extending this Proof of Concept exploration to other metallogenicbelts with the aim of defining new district plays. This is being done inconsultation with Teck Cominco who continue to provide valuable support andadvice. The intimate link of a dynamic Exploration & Development company such asStratex, with a leading mining company, in this case Teck Cominco, enablesfocused work more likely to deliver genuine results, so we are delighted withthis strengthening relationship. In the past twelve months both Paul Foord and Andrew Malim stepped down fromtheir roles as Non-executive Directors. This is no way reflects on the Companybut only that Paul and Andrew felt new commitments would not allow them todevote as much time as they would like to their duties. We respect theirdecisions entirely and wish them all the best in the future. We were pleased to announce the appointment of Christopher Hall as a newNon-executive Director, who was previously the in-house mining adviser providingspecialist support, principally with AIM quoted resource companies, at GrantThornton LLP, UK. I believe Christopher's wide-ranging technical and financialexperience will be of more than considerable value to the Company. We are all extremely excited about the potential of the Company and thedirection we are moving in. Results from our drilling campaigns aimed atproving the economic potential of our projects are increasingly encouraging andwe expect the year ahead to be just as active with a steady flow ofcomprehensive news. We understand the importance of investor relations and tothis end we presented at the Mines and Money conference last year in London andhosted a site visit to Konya for institutional shareholders and selected press,both of which were highly successful. In order to maintain close links withour shareholders, we have recruited a dedicated Investor Relations/CorporateDevelopment, manager, Claire Palmer, who will be happy to answer shareholderqueries. Thank you for your continuing support. David J. HallChairman10th March 2008 Consolidated Income Statement - by function of expense Year ended 31 Year ended 31 December 2007 December 2006 Restated £ £Revenue - -Cost of sales - -Gross profit - -Administrative expenses (1,270,654) (645,106)Exchange gains/(losses) - net (5,678) 1,344Operating loss (1,276,332) (643,762)Finance income 247,014 66,351Loss before income tax (1,029,318) (577,411)Income tax (expenses)/credit 3,559 16,158Loss for the year attributable to equity holders of the Company (1,025,759) (561,253) Loss per share for losses attributable to the equity holders ofthe Company during the year (expressed in pence per share) - basic and diluted (0.51) (0.39) Consolidated Balance Sheet As at 31 December 2007 2006 Restated £ £ASSETSNon-current assetsTangible assets 99,728 27,961Intangible assets 1,970,931 731,701Trade and other receivables 79,813 41,457Deferred tax asset 56,327 16,151 2,206,799 817,270Current assetsTrade and other receivables 481,216 140,550Cash and cash equivalents 6,274,553 1,563,170 6,755,769 1,703,720Total Assets 8,962,568 2,520,990 EQUITYCapital and reserves attributable to equity holders of the CompanyOrdinary shares 2,340,669 1,536,167Share premium 8,185,929 2,101,342Other reserves 141,732 (376,724)Accumulated losses (1,816,093) (808,224)Total equity 8,852,237 2,452,561 LIABILITIESNon-current liabilitiesEmployee termination benefits 2,477 1,152Deferred tax liabilities 33,843 593 36,320 1,745Current liabilitiesTrade and other payables 74,011 66,684 74,011 66,684Total equity and liabilities 8,962,568 2,520,990 Consolidated Statement of Changes in Equity Share Share Share Merger Option Accumulated Translation Total Capital Premium Reserve Reserve Loss Reserve Equity £ £ £ £ £ £ £ Balance at 31 December 1,000,000 - (485,400) - (246,971) 1,262 268,8912005 Issue of ordinary 536,167 2,559,433 - - - - 3,095,600shares Share Options - value - - - 14,304 - - 14,304of employee services Costs of share issue - (388,690) - - - - (388,690) Consolidated loss for - - - - (487,026) - (487,026)the period Movement on - - - - - (50,518) (50,518)translation reserve Balance at 31 December 1,536,167 2,170,743 (485,400) 14,304 (733,997) (49,256) 2,452,5612006 as previouslystated Share Options - value - - - 74,227 (74,227) - -of employee services Share Options - value - (69,401) - 69,401 - - -of services received Balance at 31 December 1,536,167 2,101,342 (485,400) 157,932 (808,224) (49,256) 2,452,5612006 as restated Issue of ordinary 804,502 6,346,622 - - - - 7,151,124shares Share Options - value - - - 243,909 - - 243,909of employee services Share Options - - 33,674 - (51,564) 17,890 - -exercise of options Costs of share issue - (295,709) - - - - (295,709) Consolidated loss for - - - - (1,025,759) - (1,025,759)the year Movement on - - - - - 326,111 326,111translation reserve Balance as 31 December 2,340,669 8,185,929 (485,400) 350,277 (1,816,093) 276,855 8,852,2372007 Consolidated Cash Flow Statement Year ended 31 Year ended 31 December 2007 December 2006 Restated £ £Cash flows from operating activitiesNet cash used in operating activities (1,208,593) (662,264)Cash flows from investing activitiesPurchases of property, plant and equipment (80,586) (30,612)Purchases of intangible assets (1,209,505) (644,592)Interest received 247,014 66,351Net cash used in investing activities (1,043,077) (608,853)Cash flows from financing activitiesNet proceeds from issue of ordinary shares 6,855,415 2,656,310Funds received from related party 107,638 -Net cash used in financing activities 6,963,053 2,656,310Net increase in cash and cash equivalents 4,711,383 1,385,193Cash and cash equivalents at beginning of the period 1,563,170 177,977Cash and equivalents at end of the year 6,274,553 1,563,170 Notes to the Financial Statements 1. General information The principal activity of Stratex International plc ('the Company') and itssubsidiaries (together 'the Group') is exploration for, and development of,precious and base metal deposits. The Company was admitted to AIM on 4 January2006. The address of its registered office is 212 Piccadilly, London W1J 9HG. These group consolidated financial statements were authorised for issueby the Board of Directors on 7th March 2008. The Annual General Meeting of Stratex International plc will be held on28 April 2008. Venue to be decided. 2. Summary of significant accounting policies The principal accounting policies applied in the preparation of theseconsolidated financial statements are set out below. These policies have beenconsistently applied to all the years presented. Basis of preparation: These financial statements have been prepared in accordance withInternational Financial Reporting Standards (IFRS) as adopted by the EuropeanUnion (EU), IFRIC interpretations and those parts of the Companies Act, 1985applicable to companies reporting under IFRS. The financial statements have beenprepared under historical cost convention. A summary of the more important groupaccounting policies is set out below. The preparation of financial statements in conformity with generallyaccepted accounting principles requires the use of estimates and assumptionsthat affect the reported amounts of assets and liabilities at the date of thefinancial statements and the reported amounts of revenues and expenses duringthe reporting period. Although these estimates are based on management's bestknowledge of the amount, event or actions, actual results ultimately may differfrom those estimates. Basis of consolidation: Stratex International plc was incorporated on 24 October 2005. On 21November 2005 Stratex International plc acquired the entire issued share capitalof Stratex Exploration Ltd by way of a share for share exchange. The transactionhas been treated as a Group reconstruction, and has been accounted for using themerger accounting method. Where necessary, adjustments are made to the financial statements ofsubsidiaries to bring the accounting policies used into line with those used byother members of the Group. All significant intercompany transactions and balances between groupenterprises are eliminated on consolidation. Intangible assets: The Group recognises expenditure as exploration and evaluation assetswhen it determines that those assets will be successful in finding specificmineral resources. Expenditure included in the initial measurement ofexploration and evaluation assets and which are classified as intangible assetsrelate to the acquisition of rights to explore topographical, geological,geochemical and geophysical studies, exploratory drilling, trenching, samplingand activities to evaluate the technical feasibility and commercial viability ofextracting a mineral resource. Exploration and evaluation asset are assessed for impairment when factsand circumstances suggest that the carrying amount of any asset may exceed itsrecoverable amount. The assessment is carried out by allocating exploration andevaluation assets to cash generating units which are based on geographicalareas. Where the exploration for and evaluation of mineral resources in cashgenerating units does no lead to the discovery of commercially viable quantitiesof mineral resources and the Company has decided to discontinue such activitiesat that unit, the associated expenditures will be written off to the IncomeStatement. 3. Restatement of prior period The amounts previously reported as at 31 December 2006 have beenrestated in respect of share based payments to employees and third parties. Thisis reflected in operating expenses, share premium and accumulated reserves of 31December 2006. 4. Expenses by nature 2007 2006 £ Restated £Employee benefit expense 509,739 257,152Fees paid to related parties 60,303 49,260Consultant geologist services 93,465 76,519Depreciation, amortisation and impairment charges 125,643 3,064Other expenses 481,504 259,111Total cost of sales, distribution costs and administrative expenses 1,270,654 645,106 5. Cash generated from operations 2007 2006 £ Restated £Loss before income tax (1,029,318) (577,411)Adjustments for :- Services for issue of share options 243,909 88,531- Depreciation 18,908 4,600- Write off exploration projects 118,001 -- Interest income on short term loans (247,014) (66,351)- Interest income on intercompany indebtedness - -- Foreign exchange movements on operating activities 57,291 (5,504)Changes in working capital (excluding the effects and exchange differences onconsolidation)- Trade and other receivables (379,022) (139,297)- Trade and other payables 8,652 33,168Cash generated from operations (1,208,593) (662,264) 6. Dividend The Directors do not recommend the payment of a dividend. * ENDS * * For further information visit www.stratexinternational.com or contact: David Hall Stratex International Plc Tel: +44 (0) 20 7830 9650Bob Foster Stratex International Plc Tel: +44 (0)20 7830 9650Claire Palmer Stratex - Investor Relations Tel: +44 (0)20 7830 9650Anita Ghanekar Hanson Westhouse Limited Tel: +44 (0)20 7601 6100Victoria Thomas St Brides Media & Finance Ltd Tel: +44 (0)20 7236 1177 This information is provided by RNS The company news service from the London Stock Exchange