Oriole Resources Regulatory News (ORR)

1 Mar 2007 07:03

Stratex International PLC01 March 2007 Stratex International Plc / Index: AIM / Epic: STI / Sector: Mining 1st March 2007 Stratex International Plc, ('Stratex' or 'the Company') Preliminary 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 2006. Chairman's Statement It gives me great pleasure to report our maiden full year results and updateshareholders on the progress we have made in Turkey. Through discoveries we haveassembled a quality portfolio of exploration assets including the firstsignificant gold discovery of the 21st century in Turkey - Inlice - where threedrill rigs are currently active with a view to delivering our first resourcestatement in Q2 2007. We control over 300 square kilometres of a potential newgold +/- copper district at Konya, as well as other exciting prospects in ourportfolio. In line with this progress, Stratex's share performance has beenstrong since it joined AIM on 4 January 2006 at 5p, having increased 75% sinceAdmission, making it amongst the leading performers of new entrants to AIM. In 2006, the groundwork preparation was completed, which will position theCompany well for future growth. It is our belief that the best way of creatingvalue in the minerals sector is by discovery, which we believe can bedemonstrated by the Inlice gold discovery in the Konya district. This time lastyear the Inlice project was not yet drill tested but, following the 2006drilling programme, we now have a number of very encouraging intersectionsincluding: • INDD-1 13.2 metres grading 5.92 g/t Au; • INDD-10 16.5 metres grading 8.53 g/t Au; • INDD-11 19.0 metres grading 6.97 g/t Au; • INDD-13 15.0 metres grading 7.69 g/t Au; • INDD-15 13.2 metres grading 8.17 g/t Au; • INDD-19 15.0 metres grading 5.96 g/t Au. We are well on the way to defining an initial resource figure for the projectbut the real value, we believe, is in the exploration potential of the property.With three drill rigs active on the property we are drilling to define aresource and also to test the Bati, Ana West and Merkez Zones. A newintersection in any of these areas will have significant implications for thescale of the project. In November 2006, the world-renowned porphyry and epithermal economic geologistDr. Richard Sillitoe visited the Inlice and Konya projects with Dr. StewartRedwood, consultant economic geologist. Dr. Sillitoe made a striking comparisonbetween the Konya volcanic district and the Maricunga gold district in Chile. Inthe early 1980s the Maricunga district had no known gold or coppermineralisation, but is now an over 40 million ounce gold district withsignificant copper resources. The analogy with Konya is encouraging in terms ofstyles of mineralisation and type and age of the volcanic rocks hosting themineralisation. Until the recent discoveries by Stratex there was no knownrecord of gold mineralisation in the entire Konya Volcanic Belt. Additionally, Inlice is hosted by the type of Miocene volcanic terrain, whichelsewhere in Turkey is well-endowed with mineralisation (e.g. Kisladag gold mineof Eldorado Gold with reserves of 5 million ounces of gold and the Agi Dagihigh-sulphidation discovery in the Biga Peninsula), thus lending strong supportto the potential of our newly discovered Konya district. Commencement ofdrilling of the Doganbey porphyry gold prospect 15 kilometres north-west ofInlice in April 2007 is the next important step in our exploration of thedistrict. The importance of portfolio development is high in our strategy and the Companyhas a strong pipeline of projects. Using the same technique to identify silicaalteration as for the Konya area, we have identified a Konya look-alike area inthe Hasancelebi district east of Malatya. One gold-bearing system has beenidentified and a number of other zones await investigation. In north-westernTurkey the Muratdere prospect has the hallmarks of a large porphyry copper-gold-molybdenum system and we plan to start exploration drilling in April 2007. We have exercised our option from Teck Cominco Limited over the Muratdagiproject, having expended US$500,000 on exploration. The Company completed 2,300metres of drilling and has confirmed the presence of gold mineralisation in theKaraagac prospect. We will be reviewing the work programme and may seek to addfurther value by joint venturing the project whilst focusing our funds onpriority projects. In addition Stratex has an option from Teck Cominco Limitedover the Biga group of properties (Dikmen, Ergama, and Belen prospects) in thehighly strategic Biga Peninsula gold belt. The Board is keen to develop the Company's profile in the London market andelsewhere and has appointed Hanson Westhouse Limited as our new NominatedAdvisor and Broker. Hanson Westhouse is highly experienced in the resourcesector and we look forward to working closely with its team and building ourinvestor profile. The availability and retention of quality experienced people is a major issue inthe exploration and mining industry. We are fortunate to have a high quality,experienced management team including, Dr. Bob Foster, C.E.O. and Bahri Yildizour Turkish General Manager. Due to the progress we have made over the last yearand the rapid identification of targets, we are actively recruiting newgeologists to boost the team as well as supplying continual training to ouryoung and highly motivated Turkish staff. In our opinion, the other critical issue in the sector is lack of newdiscoveries and thus projects with the ability to be developed into new mines.There is evidence of the increasing demand for all metals, which is beneficialfor those mines currently in production. However, each mine has a finiteresource and the current boom is depleting these resources rapidly. The supplyside, through the Exploration & Development sector, is becoming progressivelymore important. We believe the best way to create value in our business is notby recycling old projects, nor by acquiring known well-explored mineralisedproperties, but by genuine discoveries of new mineral occurrences with thepotential to be developed into large deposits. With Inlice, and other potentialdeposits in its portfolio, Stratex has demonstrated that it has the ability todeliver these new discoveries. 2007 promises to be another exciting year in Stratex's development, and I thankyou for your continuing support. David J. Hall Chairman 28 February 2007 Consolidated Income Statement Year ended 31 December 2006 Period from 24 August 2004 to 31 December 2005 £ £Revenue - -Cost of sales - -Gross profit - -Administrative expenses (570,879) (256,834)Exchange gains - net 1,344 93Operating loss (569,535) (256,741)Finance income 66,351 9,770Loss before income tax (503,184) (246,971)Income tax credit 16,158 -Loss for the year attributable to equity holders of the Company (487,026) (246,971) Loss per share for losses attributable to the equityholders of the Company during the year (expressed inpence per share) - basic and diluted (0.34) (0.33) Consolidated Balance Sheet As at 31 December 2006 2005 £ £ASSETSNon-current assetsProperty, plant and equipment 27,961 3,570Intangible assets 731,701 79,302Trade and other receivables 41,457 15,035Deferred tax asset 16,151 - 817,270 97,907Current assetsTrade and other receivables 140,550 27,675Cash and cash equivalents 1,563,170 177,977 1,703,720 205,652Total Assets 2,520,990 303,559 EQUITYCapital and reserves attributable to equity holders ofthe CompanyOrdinary shares 1,536,167 1,000,000Share premium 2,170,743 -Other reserves (534,656) (484,138)Accumulated losses (719,693) (246,971)Total equity 2,452,561 268,891 LIABILITIESNon-current liabilitiesEmployee termination benefits 1,152 -Deferred tax liabilities 593 - 1,745 -Current liabilitiesTrade and other payables 66,684 34,668 66,684 34,668Total equity and liabilities 2,520,990 303,559 Consolidated Statement of Changes in Equity Share Share Merger Accumulated Translation Total Equity Capital Premium Reserve Loss Reserve £ £ £ £ £ £Balance on incorporation - - - - - -Issue of ordinary shares 1,000,000 1,000,000Merger reserve - - (485,400) - - (485,400)Consolidated loss for the period - - - (246,971) - (246,971)Movement on translation reserve - - - - 1,262 1,262Balance at 31 December 2005 1,000,000 - (485,400) (246,971) 1,262 268,891Issue of ordinary shares 536,167 2,559,433 - - - 3,095,600Share Options - value of - - 14,304 - 14,304employee servicesCosts of share issue - (388,690) - - (388,690)Consolidated loss for the year - - - (487,026) - (487,026)Movement on translation reserve - - - - (50,518) (50,518)Balance as 31 December 2006 1,536,167 2,170,743 (485,400) (719,693) (49,256) 2,452,561 Consolidated Cash Flow Statement Year ended 31 December Period from 24 August 2006 2004 to 31 December 2005 £ £Cash flows from operating activitiesNet cash used in operating activities (662,263) (265,021)Cash flows from investing activitiesPurchases of property, plant and equipment (30,612) (4,892)Purchases of intangible assets (644,592) (76,480)Interest received 66,351 9,770Net cash used in investing activities (608,853) (71,602)Cash flows from financing activitiesProceeds from issuance of ordinary shares 2,656,310 514,600Net cash used in financing activities 2,656,310 514,600Net increase in cash and cash equivalents 1,358,194 177,977Cash and cash equivalents at beginning of the period 177,977 -Cash, and equivalents at end of the year 1,563,171 177,977 Notes to the Financial Statements 1. General information The principal activity of Stratex International plc ('the Company') and itssubsidiaries (together 'the Group') is base metal exploration and development.The Company completed a listing on AIM on 4 January 2006. The address of its registered office is 212 Piccadilly, London, W1J 9HG. These group consolidated financial statements were authorised for issue by theBoard of Directors on 26 February 2007. 2. Summary of significant accounting policies A summary of the principal accounting policies applied in the preparation ofthese consolidated financial statements are set out below. These policies havebeen consistently applied to all the years presented. Basis of preparation These financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRS) as adopted by the European Union (EU),IFRIC interpretations and those parts of the Companies Act, 1985 applicable tocompanies reporting under IFRS. The financial statements have been preparedunder historical cost convention. 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 Stratex International plc was incorporated on 24 October 2005. On 21 November2005 Stratex International plc acquired the entire issued share capital of StratexExploration Ltd by way of a share for share exchange. The transaction has beentreated as a Group reconstruction, and has been accounted for using the mergeraccounting method. Accordingly the financial information for the current periodand comparatives has been presented as if Stratex Exploration Ltd had been ownedby Stratex International plc throughout the current and prior periods. Notwithstanding that the first period of accounts for Stratex International plcare for the period from 24 October 2005 to 31 December 2006, comparatives havebeen prepared for the period ended 31 December 2005 as Stratex International Plcdid not trade prior to 31 December 2005. 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 andbalances between group enterprises are eliminated on consolidation. 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 asset are assessed for impairment when facts andcircumstances 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 cash generatingunits does no lead to the discovery of commercially viable quantities of mineralresources and the Company has decided to discontinue such activities at thatunit, the associated expenditures will be written off to the Income Statement. 3. Expenses by nature 2006 2005 £ £Employee benefit expense 182,925 7,886Fees paid to related parties 49,260 76,000Consultant geologist services 76,519 41,711Depreciation, amortisation and impairment charges 3,064 824Other expenses 259,111 130,413Total cost of sales, distribution costs and administrative expenses 570,879 256,834 4. Cash generated from operations 2006 2005 £ £Loss before income tax (503,184) (246,971)Adjustments for :- Employee services for issue of share options 14,304 -- Depreciation 4,600 1,545- Interest income on short term loans (66,351) (9,770)- Foreign exchange movements on operating activities (5,503) (1,783)Changes in working capital (excluding the effects of exchange differences onconsolidation)- Trade and other receivables (139,297) (42,710)- Trade and other payables 33,168 34,668Cash generated from operations (662,263) (265,021) 5. Dividend The Directors do not recommend the payment of a dividend. * * ENDS * * For further information please 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 9650Anita Ghanekar Hanson Westhouse Limited Tel: +44 (0)20 7601 6100Phil Swinfen Hanson Westhouse Limited Tel: +44 (0)20 7601 6100Hugo de Salis St Brides Media & Finance Ltd Tel: +44 (0)20 7242 4477 Notes to editors Stratex International Plc is an AIM-quoted exploration and development companycurrently focusing on gold and base metal opportunities in Turkey. Directed by ahighly experienced resource sector management team, Stratex's activities aim toidentify quality mineral resources, primarily gold, silver, copper, molybdenum,zinc, and nickel. The Company has a Strategic Alliance with Teck Cominco Limited, a diversifiedmining company headquartered in Vancouver, Canada. Teck Cominco holds 13.35% 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