Stratex International plc (Stratex or the Company) has signed a binding Heads of Terms agreement with privately owned LozBez Mining Private Limited Company (LozBez), for the AbiAdi-Gichke Gold Project (AbiAdi) project located in the prospective Tigray province in northern Ethiopia.Highlights
- Licence area covers 967 sq km of highly prospective ground for gold and base metal mineralisation in northern Ethiopia within the Arabian-Nubian Shield
- Agreement in line with Stratex’s strategy to increase land position in prospective Ethiopian gold sector
- Gold mineralisation identified over a strike length of approximately 5 km associated with intrusive rocks and major NE-trending linear feature
- Stratex to undertake due diligence on AbiAdi over a three month period for an initial expenditure of US$50,000
- Stratex to earn 75% of AbiAdi through the expenditure of US$1 million over a 36 month period
- Option to earn a further 10% of a joint venture company (JVC) formed with LozBez following initial expenditure
Stratex International‟s Executive Chairman David J. Hall said, “We are delighted to sign an agreement with LozBez, which gives us access to this highly prospective ground in northern Ethiopia. We have a strong exploration portfolio in the region, the value of which was recently underpinned by our agreement with Thani Ashanti, an AngloGold Ashanti joint-venture company, to fast-track the development of our prospective licence
areas in the Afar Depression of eastern Ethiopia and Djibouti. We look forward to developing our presence further within the Ethiopian gold arena through our relationship with LozBez.
“The new AbiAdi licence area is strategically located across a significant northeast-trending structure where shear- and intrusion-associated gold mineralisation extends over more than 5 km, with historical chip sampling assay grades of up to 8.45 g/t Au and 41.9 g/t Ag in separate samples. Interestingly the geological setting is very similar to the Zara gold deposit in Eritrea where Chalice Gold has defined an indicated resource of 5 Mt grading 5.3 g/t Au for 840,000 oz.”
Detailed Information
Under the terms of the agreement, following expenditure of US$50,000 during an initial three month due-diligence period, Stratex can earn up to 75% of AbiAdi following the funding of all exploration to a total expenditure of US$1 million and the completion of 3,000 metres of diamond drilling over a 36 month period.
Upon earning the 75%, Stratex and LozBez will form a JVC, into which AbiAdi will be placed. Stratex may then earn a further 10% of the JVC through additional expenditure of US$2 million, the total expenditure of US$3 million giving Stratex 85% of the JVC. Stratex can commission a feasibility study at any time following the initial expenditure of US$1 million and the formation of the JVC.
Following the completion of the feasibility study and the decision to proceed to mine production, if either party fails to contribute to the construction and commissioning costs, their equity share will be reduced using an industry-standard contribute-and-dilute formula. Should either party be reduced below 10%, their equity share will be diluted to a 2% Net Smelter Return royalty.
Stratex’s interest in AbiAdi will reside in Stratex East Africa (SEA). As announced on 12 October 2010 SEA, presently owned 100% by Stratex, will hold all Stratex's Ethiopian and Djibouti assets. Under the terms of Stratex's agreement with Thani Ashanti, an AngloGold Ashanti Limited joint venture company, Thani Ashanti will acquire a 5% interest in SEA (and thereby a 5% interest in AbiAdi) once Thani Ashanti has expended their minimum US$500,000 commitment at the Company's Afar Project.
AbiAdi Licence Details
The AbiAdi project is located in the Tigray province of northern Ethiopia, approximately 60 km north-west of the provincial capital of Mekele, and 80 km south of Stratex‟s existing Tigray Exclusive Exploration Licence. The licence area is underlain by limestone, phyllite (fine grained sedimentary rock), volcanic rocks, and granite, which are all Proterozoic in age. The licence forms part of the highly prospective Arabian-Nubian Shield.
LozBez has completed a preliminary programme of geological mapping and sampling of outcropping rocks and stream sediments across the central-eastern portion of the licence. This work has identified a prospective northeast-trending structure and an elongate intrusive, both of which contain anomalous concentrations of gold over a distance of more than 5 km, with historical chip sampling assay grades up to 8.45 g/t gold and 41.9 g/t silver in separate samples. The geochemical analyses were undertaken at the Geological Survey of Ethiopia‟s laboratory in Addis Ababa that provides a good service but is not ISO-certified. Local artisanal miners are exploiting both alluvial and bedrock mineralisation and are recovering coarse flakes of gold up to 2 mm in size.
Stratex East Africa Ltd (SEA) – Ethiopia and Djibouti Portfolio
- 5.45% shareholding in PLUS-quoted exploration company Sheba Exploration (UK) plc (Sheba)
- A joint venture with Sheba to (i) earn-in to an initial 60% of the prospective 37 sq km Shehagne gold project in Ethiopia, and (ii) explore targets in northern Ethiopia on a 70:30 joint venture basis
- Berahale and Gademsa EELs cover a combined area of 1,225 sq km in northern and central Ethiopia respectively and are prospective for gold and base metals
- 2,780 sq km land position over new epithermal gold discovery and multiple related gold targets in the Afar Depression of eastern Ethiopia and Djibouti, collectively named as the Afar Project
- Stratex International has signed a binding Heads of Agreement with Thani Ashanti, an AngloGold Ashanti Limited joint venture company, to fast-track development of the Afar prospects. Thani Ashanti can earn 51% of the currently identified prospects (collectively the Afar Project) by spending US$3 million on exploration and development over two years
For further information please visit www.stratexinternational.com
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