Oriole Resources Regulatory News (ORR)

31 Jul 2006 12:57

Stratex International PLC31 July 2006 Stratex International Plc / Index: AIM / Epic: STI / Sector: Mining 31 July 2006 Stratex International Plc, ('Stratex' or 'the Company') Interim Results Stratex International Plc, the AIM-listed international exploration anddevelopment company currently focusing on gold and base metal opportunities inTurkey, announces its results for the period ended 30 June 2006. Chairman's statement It gives me great pleasure to review the first six months of your Company'sactivities since listing. Stratex - Strategic Exploration, has developed rapidlyand successfully in its short public period. True success in exploration, a rarecommodity, is defined by drilling of economic ore intersections. Your Companyduly delivered with the first drill hole at its 100% owned Inlice prospect inthe Konya Volcanic Complex (KVC). The intersection of 38.45 metres grading 2.98g/t Au confirmed the prospect as a serious new discovery of high sulphidationgold mineralization in Turkey. Since that early success in April our work onwhat we regard as our flagship discovery has progressed well, culminating in therecent exciting press release of 18th July declaring an intersection of 32.20metres grading 5.75 g/t Au with a high grade core of 16.50 metres grading 8.53 g/t Au. Strategic indeed, especially as your Company had rapidly moved to put itselfcompetitively ahead of other exploration companies by recognising the strategicimportance of the KVC and its potential for further epithermal and porphyrydiscoveries. High sulphidation gold systems are a major target worldwideespecially given the importance in terms of low cost production of such mines asYanacocha, Pierina and Veladero. These systems often come in clusters and thepresence of more than 20 target alteration systems in the KVC is highlyencouraging. Drilling is ongoing at Inlice; our understanding of the controls on goldmineralization is being added to. Your Company has now shown multi-million ouncepotential and is rapidly moving forward to defining a serious resource here.There will be holes with little or no gold but as long as your experienced teamis using such knowledge to enhance the prospect of finding the main focus of thegold mineralization the project will be developed further. Indeed recent mappingwith QuickBird high resolution imagery has identified a new large target northwest of the current Main Zone that the Company has quickly evaluated with soilsampling. I look forward to continuing encouraging news from the Inlice and KVCproject. Stratex has an exciting portfolio. Indeed as I write drilling has started on yetanother gold discovery - Karaagac in our Muratdagi project area. The style ofmineralization here is what is known as sediment-hosted gold. The Company haddefined gold with silicified and structurally prepared zones with encouraginggold grades up to 9.7 g/t Au. The aerial extent of the mineralization bodes wellfor discovery of a large-tonnage low-grade gold resource. In line with the plans given in the AIM Admission Document, the Company has alsoalmost completed mapping and sampling of the Dikmen property with theanticipation of identifying drill targets, and this effort will shortly bedirected to the Muratdere property also. Many companies espouse the use of so-called "black box" techniques such asadvanced remote sensing technology. Your Company uses such tools as a matter ofcourse as part of its normal exploration programmes. What is critical is havingqualified experienced economic geologists capable of making observations,defining risk and managing programmes for maximum value. Such people are rare,but Stratex in its dynamic CEO, Dr. Bob Foster, and Turkish General ManagerBahri Yildiz has such people and they are building a good support team. You can be assured of an exciting six months as the Company tests and developsthese projects and develops further its pipeline of projects. The StrategicAssociation with Teck Cominco means that Stratex has a willing and financiallyand technically capable partner to develop these projects further at no cost tothe Company if they exercise their back-in rights. Together with Teck Cominco weare reviewing additional opportunities and I anticipate expansion of our mutualinterests outside of Turkey in the coming months. Thank you for your past interest and support and I hope you will continue tosupport what I firmly believe to be a strategically positioned Exploration &Development company with very considerable assets in terms of its projectpipeline and its people. David J. HallChairman18 July 2006 Consolidated Income Statement Period from 24 6 months to 30 6 months to 30 August 04 June 06 June 05 to 31 December 05 Unaudited Unaudited Unaudited £ £ £ - - - Turnover (255,803) (120,578) (256,741) Other operating expenses (255,803) (120,578,) (256,741) Loss from operations 28,726 5,158 9,770 Finance income Loss from ordinary activities before tax (227,077) (115,420) (246,971) Tax (charge)/credit on profit on ordinary activities - - - _____ ___ _____ ___ __ ______Retained loss for the period attributable to shareholders (227,077) (115,420) (246,971) Loss per share - basic and diluted (0.17)p (0.15)p (0.33)p Consolidated balance sheet 30 June 06 30 June 05 31 December 05 Unaudited Unaudited Unaudited £ £ £ASSETSNon-current assetsProperty, plant & equipment 16,594 4,146 3,570Intangible assets 205,283 12,060 79,302 221,877 16,206 82,872Current assetsOther receivables 35,571 12,838 42,710Bank balances and cash 1,337,011 390,508 177,977 1,372,582 403,346 220,687Total assets 1,594,459 419,552 303,559 EQUITY & LIABILITIESEquityIssued capital 1,374,000 1,000,000 1,000,000Reserves 163,455 (601,461) (731,109) 1,537,455 398,539 268,891Current liabilitiesTrade payables 14,772 18,489 28,325Other payables 42,232 2,524 6,343 57,004 21,013 34,668Total equity and liabilities 1,594,459 419,552 303,559 Consolidated Statement of Changes in Equity Share Share Merger Accumul- Translation Capital Premium Reserve ted loss reserve Total £ £ £ £ £ £ As at 1 January 2006 1,000,000 0 (485,400) (246,971) 1,262 268,891 Issue of ordinary 374,000 1,496,000 1,870,000shares Share option -value 12,594 12,594of employee services Costs of share issue (329,940) (329,940)and admission to AIM Consolidated loss for (227,077) (227,077)the period Movement on _________ ___ _____ _________ _________ (57,013) (57,013)translation reserve As at 30 June 2006 1,374,000 1,166,060 (485,400) (461,454) (55,751) 1,537,455 Consolidated cash flow statement Period from 24 6 months to 30 6 months to 30 August 04 June 06 June 05 to 31 December 05 Unaudited Unaudited Unaudited £ £ Cash inflow from operating activitiesLoss before tax (227,077) (115,420) (246,971)Interest income (28,726) (5,158) (9,770)Depreciation 2,555 725 1,545Employee services for issue of share options 12,594 - -Exchange (loss)/gain (17,673) (685) 1,262Operating loss before changes in working capital (258,327) (120,538) (253,934) (Increase)/decrease in other receivables and prepayments 7,139 (12,838) (42,710)Increase in trade payables 22,336 21,013 34,668 ________ ________ ________Net cash outflow from operating activities (228,852) (112,363) (261,976)Cash flows from investing activitiesPurchase of intangible assets (163,275) (11,995) (79,302)Purchase of tangible assets (17,625) (4,892) (5,115)Interest received 28,726 5,158 9,770 Net cash used in investing activities (152,174) (11,729) (74,647) Cash flows from financing activitiesProceeds from the issue of shares 1,540,060 504,600 514,600Net cash inflow from financing activities 1,540,060 504,600 514,600 Net increase 1,159,034 380,508 177,977in cash and cash equivalentsCash and cash equivalents at the beginning of the period 177,977 10,000 0Cash and cash equivalents at the end of the period 1,337,011 390,508 177,977 Notes to the unaudited financial statements 1. Establishment and operations The principal activity of the Stratex Group is base metals exploration anddevelopment. Stratex International plc, the parent company, completed a listingon AIM on 4 January 2006. The funds raised as a result of the share placing inJanuary are forecast to provide sufficient working capital for the remainder of2006. 2. Financial information The financial information set out above does not constitute statutory accountswithin the meaning of Section 240 of the Companies Act 1985. It has beenprepared on a going concern basis in accordance with International FinancialReporting Standards (IFRS). The accounting policies applied in preparing thefinancial information are consistent with those that will be adopted in theGroup's 2006 statutory accounts. The financial information for the 6 months ended 30 June 2006, the 6 monthsended 30 June 2005 and the period to 31 December 2005 has not been audited. 3. Accounting policies Basis of preparation These financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRS) as adopted by the European Union (EU) andthose parts of the Companies Act, 1985 applicable to companies reporting underIFRS. The financial statements have been prepared under historical costconvention. A summary of the more important group accounting policies is setout below. The preparation of financial statements in conformity with generally acceptedaccounting principles requires the use of estimates and assumptions that affectthe reported amounts of assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting 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 On 21 November 2005 Stratex International plc acquired the entire issued sharecapital of Stratex Exploration Ltd by way of a share for share exchange. Thetransaction has been treated as a Group reconstruction, and has been accountedfor using the merger accounting method. Accordingly the financial informationfor the current period and comparatives has been presented as if StratexExploration Ltd had been owned by Stratex International plc throughout thecurrent and prior periods. 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 group enterprisesare eliminated on consolidation. Foreign currency translation (a) Functional and presentation currency Items included in the financial statements of each of the Group's entities aremeasured using the currency of the primary economic environment in which theentity operates (the 'functional currency'). The consolidated financialstatements are presented in sterling, which is the Group's presentationcurrency. (a) Transactions and balances Foreign currency transactions are translated into the functional currency usingthe exchange rates prevailing at the dates of the transactions. Foreignexchange gains and losses resulting from the settlement of such transactions andfrom the translation at year-end exchange rates of monetary assets andliabilities denominated in foreign currencies are recognised in the incomestatement. (b) Group companies The results and financial position of all the Group entities (none of which hasthe currency of a hyperinflationary economy) that have a functional currencydifferent from the presentation currency are translated into the presentationcurrency as follows: (i) assets and liabilities for each balance sheetpresented are translated at the closing rate at the date of that balance sheet; (ii) income and expenses for each income statementare translated at average exchange rates (unless this average is not areasonable approximation of the cumulative effect of the rates prevailing on thetransaction dates, in which case income and expenses are translated at the datesof the transactions); and (iii) all resulting exchange differences arerecognised as a separate component of equity. On consolidation, exchange differences arising from the translation of the netinvestment in foreign entities, and of monetary items receivable from foreignsubsidiaries for which settlement is neither planned nor likely to occur in theforeseeable future are taken to shareholders' equity. When a foreign operationis sold, such exchange differences are recognised in the income statement aspart of the gain or loss on sale. Intangible assets The Group recognises expenditure as exploration and evaluation assets when itdetermines that those assets will be successful in finding specific mineralresources. Expenditure included in the initial measurement of exploration andevaluation assets and which are classified as intangible assets relate to theacquisition of rights to explore topographical, geological, geochemical andgeophysical studies, exploratory drilling, trenching, sampling and activities toevaluate the technical feasibility and commercial viability of extracting amineral resource. Exploration and evaluation assets are assessed for impairment when facts andcircumstances suggest that the carrying amount of an 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 cash generatingunits does not lead to the discovery of commercially viable quantities ofmineral resources and the Company has decided to discontinue such activities atthat unit, the associated expenditures will be written off to the IncomeStatement. Property, plant and equipment Fixtures and equipment are stated at cost less accumulated depreciation. Depreciation is charged so as to write off the cost or valuation of assets overtheir estimated useful lives, using the straight-line method, on the followingbases: Plant & Machinery 10%Furniture & Fittings 20%Office and computer equipment 25% - 33%Software 33% Impairment At each balance sheet date, the Group reviews the carrying amounts of itstangible and intangible assets to determine whether there is any indication thatthose assets have suffered an impairment loss. If any such indication exists,the recoverable amount of the asset is estimated in order to determine theextent of the impairment loss (if any). If the recoverable amount of an asset is estimated to be less than its carryingamount, the carrying amount of the asset is reduced to its recoverable amount.Impairment losses are recognised as an expense immediately, unless the relevantasset is land or buildings at a revalued amount, in which case the impairmentloss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the assetis increased to the revised estimate of its recoverable amount, but so that theincreased carrying amount does not exceed the carrying amount that would havebeen determined had no impairment loss been recognised for the asset in prioryears. A reversal of an impairment loss is recognised as income immediately,unless the relevant asset is carried at a revalued amount, in which case thereversal of the impairment loss is treated as a revaluation increase. Deferred taxation Deferred tax is accounted for using the balance sheet liability method inrespect of temporary differences arising from differences between the carryingamount of assets and liabilities in the financial statements and thecorresponding tax basis used in the computation of taxable profit. Inprinciple, deferred tax liabilities are recognised for all taxable temporarydifferences and deferred tax assets are recognised to the extent that it isprobable that taxable profits will be available against which deductibletemporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply to theperiod when the asset is realised or the liability is settled. Deferred tax ischarged or credited in the income statement, except when it relates to itemscredited or charged directly to equity, in which case the deferred tax is alsodealt with in equity. Deferred tax assets and liabilities are offset when they relate to income taxeslevied by the same taxation authority and the Group intends to settle itscurrent tax assets and liabilities on a net basis. No liability to UK corporation tax arose on ordinary activities for the currentperiod or prior periods. The Group has losses to be carried forward on which nodeferred tax asset is recognised. Cash and cash equivalents Cash and cash equivalents comprise cash at bank and in hand, demand depositswith banks and other financial institutions, and short-term, highly liquidinvestments that are readily convertible into known amounts of cash and whichare subject to an insignificant risk of changes in value. Financial instruments Financial assets are recognised in the balance sheet at the lower of cost andnet realisable value. Provision is made for diminution in value whereappropriate. Interest receivable and payable is accrued and credited/charged tothe profit and loss account in the period to which it relates. Interest income is recognised on a time proportion basis, taking into accountthe principal amounts outstanding and the interest rates applicable. Share based incentives The fair value of the employee services received in exchange for the grant ofshare options is recognised as an expense. The total amount to be expensed overthe vesting period is determined by reference to the fair value of the optionsgranted. At each balance sheet date the Group revises its estimate of the numberof options that are expected to become exercisable. It recognises the impact ofthe revision of original estimates, if any, in the income statement, and acorresponding adjustment to equity over the remaining vesting period. The proceeds received net of any directly attributable transaction costs arecredited to share capital (nominal value) and share premium when the options areexercised. 4. Loss per Share The calculation of loss per share is based on a retained loss of £227,077for the period ended 30 June 2006 (30 June 2005: £115,420; 31 December 2005:£246,971) and the weighted average number of shares in issue in the period 30June 2006 of 137,400,000 (30 June 2005: 77,411,135; 31 December 2005:75,546,744). There is no difference between the diluted loss per share and theloss per share shown. The number of shares used to calculate the loss per share for the periodended 30 June 2005 and the period ended 31 December 2005 is based on the100,000,000 shares, which were issued as part of the business combination,weighted in accordance with the dates of issue of the underlying shares whichwere exchanged. 5. Dividends No dividend is proposed for the period. Independent review report to the Directors of Stratex International plc Introduction We have been instructed by the Company to review the financial information forthe six months ended 30 June 2006 which comprises the consolidated incomestatement, the consolidated balance sheet, the consolidated statement of changesin equity and the consolidated cash flow statement and the related notes to theaccounts and we have read the other information contained in the interim reportand considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report, including the conclusion, has been prepared for and only for theCompany for the purpose of the AIM Rules of the London Stock Exchange and for noother purpose. We do not, in producing this report, accept or assumeresponsibility for any other purpose or to any other person to whom this reportis shown or into whose hands it may come save where expressly agreed by ourprior consent in writing. Directors' Responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the Directors. The Directorsare responsible for preparing the interim report in accordance with the AIMRules of the London Stock Exchange which require that the accounting policiesand presentation applied to the interim figures should be consistent with thoseapplied in preparing the annual accounts except where any changes, and thereasons for them, are disclosed. Review Work Performed We conducted our review in accordance with the guidance contained in Bulletin1999/4; the review of interim financial information issued by the AuditingPractices Board for use in the United Kingdom. A review consists principally ofmaking enquiries of management and applying analytical procedures to thefinancial information and underlying financial data and, based thereon,assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with International Standards on Auditing (UK and Ireland) andtherefore provides a lower level of assurance than an audit. Accordingly, we donot express an audit opinion on the financial information. Review Conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2006. CLB Littlejohn FrazerChartered Accountants1 Park PlaceCanary WharfLondon E14 4HJ * * ENDS * * For further information please contact: David Hall Stratex International Plc Tel: +44 (0)20 7830 9650Bob Foster Stratex International Plc Tel: +44 (0)20 7830 9650Imran Ahmad HB Corporate Tel: +44 (0)20 7510 1166Hugo de Salis St Brides Media & Finance Ltd Tel: +44 (0)20 7242 4477 Notes to editors: Stratex International Plc is an AIM-listed exploration and development companycurrently focusing on gold and base metal opportunities in Turkey. Directed by ahighly experienced resource sector management team, Stratex's activities willidentify quality mineral resources, primarily gold, silver, copper, molybdenum,zinc, and nickel. Stratex has developed four high-priority prospects in central and western Turkeyand is undertaking an extensive exploration and resource drilling programme,together with mapping and sampling of key prospects. The Company has identifiedwidespread evidence for a 'high-sulphidation' style of gold mineralization onits Inlice property. This style of mineralization occurs at three of the largestand lowest cost gold mines placed into production in the last 15 years, namelyYanacocha, Pierina and Alto Chicama in Peru. Teck Cominco Limited The Company has a 'Strategic Alliance' with Teck Cominco Limited, a diversifiedmining company headquartered in Vancouver, Canada. Teck Cominco holds 14.5% ofthe Company. This enables the two parties to pool expertise, skills anddatabases to identify potential projects. Technical and financial risks are alsobeing reduced through the alliance with a major metal producer providingadditional project funding, a wealth of technical expertise and a ready buyerfor new resources ensuring rapid returns from discoveries. This information is provided by RNS The company news service from the London Stock Exchange