Deal STI

Stratex (“Stratex” or the “Company”), the AIM-quoted gold-focused exploration and development company in Turkey and Africa is pleased to announce that, further to the announcement released by the Company dated 12 June 2018 (the ‘Placing Announcement’), it has successfully raised £1.15 million before expenses and will apply for the Placing Shares to be admitted to AIM with admission expected to take place at 8.00 a.m. on or around 19 June 2018. Teathers has secured an allocation of £150,000 in the Placing of 30,000,000 shares priced at 0.5p per share (the “Allocation”). Teathers will make its Allocation available on the App by way of a Live Market Bookbuild to onboarded users of the Teathers App. The Live Market Bookbuild will be conducted through the Teathers App and will involve the issue of up to 30,000,000 new Ordinary Shares at the Issue Price of 0.5 pence per share. The Live Market Bookbuild will commence at 12pm on 13 June 2018 and will close at 12pm on Monday 18 June 2018. Settlement will occur on Monday 18 June, on which date contract notes will be issued on completion of the deal.

About Stratex & use of funds Stratex has entered into a conditional option agreement (the ‘Option Agreement’) with Bureau d’Etudes et d’Investigations Géologico-minières, Géotechniques et Géophysiques SARL (‘BEIG3’), a well-established Cameroonian company with strong in-country technical and logistic support, for its two early-stage gold exploration projects, Bibemi and Wapouzé, in north Cameroon (the ‘Projects’).

To support the Company’s ongoing exploration programme, Stratex intends to use the funds generated by the Placing to progress the Projects and, together with the Company’s existing cash, to support Stratex’s other projects and for general working capital. The Bibemi (202 km2) and Wapouzé (181km2) licences, held by BEIG3’s wholly-owned subsidiary Reservoir Minerals (BVI) Cameroon, are located in north Cameroon. The Bibemi licence has a renewal date of April 2019 and renewal of the Wapouzé licence until 2020 is under application. Surface exploration (predominantly stream sediment, soil, rock and trench sampling) on the Bibemi project to date has focused on the central Bakassi area of the licence where gold is predominantly hosted in quartz veins which can be discontinuous and irregular. Three parallel mineralised trends were identified on the licence by former operator Reservoir Minerals Inc. (‘Reservoir’), over a strike distance of c.20km. During its due diligence, Stratex noted that 7,744 trench samples were assayed for gold and the best results previously reported by Reservoir included 14m @ 1.00g/t Au to 6.2m @ 8.05g/t Au (Reservoir announcement dated 18 November 2014). The earlier stage Wapouzé licence is located 20km north of Bibemi and the main gold anomaly is located in the east of the licence. Reservoir conducted 1.5/ km2 stream sediment sampling between 2011 and 2015 and results (269 out of 573 samples analysed) included 14 samples >10ppb Au, 6 samples >25ppb Au and 3 samples >50ppb Au. The main anomalous structure follows the same orientation as at Bibemi and additional zones showing signs of mineralisation have been identified for follow-up. The work plan under the US$1.5m budget for the first stage option includes infill trenching at Bakassi to better define key gold anomalies and identify drill targets. Drilling to target key anomalies will be subject to a full project evaluation. At Wapouzé, Stratex intends to conduct detailed mapping and reconnaissance soil and rock sampling and trenching in order to define areas of more concentrated gold anomalies which can subsequently be drilled. BEIG3 is in partnership with BRGM-France (French Geological Survey) and GTK-Finland (Finnish Geological Survey) in carrying out Geological Mapping, Geochemical Prospection and the establishment of a Geological and Mining Information System in Cameroon, in the framework of the ‘Project to Strengthen Capacity in the Mining Sector’ (PRECASEM). PRECASEM, the Institution placed under the care of the Ministry of Mines, Industry and Technological Development in Cameroon, will release data later this year. For further information on the Cameroon projects, please see Stratex’s latest corporate presentation:

Further Details on the Option Agreement Under the terms of the Option Agreement, Stratex will earn an initial 51% of both Projects by funding US$1.56m of exploration over the next two years (the ‘First Option’). Thereafter, Stratex can earn a further 39% for an additional U$1.56m exploration expenditure, or on the completion of a pre-feasibility study on at least one of the Projects, over the subsequent two years (the ‘Second Option’). BEIG3 will retain a 10% free carried interest in both projects up to completion of the Second Option or the completion of a pre-feasibility study on at least one of the Projects. Stratex and BEIG3 will form a JV company managed by a committee, comprising three representatives of Stratex and two representatives of BEIG3 following exercise of the First Option, that will hold and operate the Projects. Stratex will manage the exploration programme and BEIG3 will provide operational and logistical support via a technical services agreement.

Result of the Placing Pursuant to the Placing Announcement, the Company has raised funds of £1.15m before expenses (the ‘Proceeds’) through a placing of 224,500,000 new Ordinary Shares (‘Placing Shares’) and a subscription of 5,500,000 new Ordinary Shares (‘Subscription Shares’), for a total of 230,000,000 New Ordinary Shares representing approximately 32.8 per cent of the issued share capital of the Company as enlarged by the Placing, at a price of 0.5 pence per share (the ‘Placing Price’). For conducting the Placing, the Company will also issue 4,490,000 Ordinary Shares at the Placing Price to Turner Pope Investments (TPI) Ltd (‘Turner Pope’), (‘Commissioned Shares’) and 13,470,000 warrants for new Ordinary Shares exercisable at the Placing Price (‘Broker Warrants’). The Broker Warrants will be exercisable at any time in the three years after issue. No application will be made for the Broker Warrants to be admitted to trading on AIM. Application will be made for 234,490,000 new Ordinary Shares to be admitted to trading on AIM which is expected to occur on or around 19 June 2018. Following Admission, the total number of Stratex Ordinary Shares in issue will be 701,801,276 with voting rights. This figure of 701,801,276 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA’s Disclosure Guidance and Transparency Rules.

Tim Livesey, CEO of Stratex, commented: “We are delighted to have secured this financing, quickly and efficiently, in what are tight market conditions for exploration companies. We have a focussed and defined plan to use the funds to expand and advance our footprint in West Africa, in particular the initial earn-in to the two early-stage gold exploration projects in Cameroon, under the recently executed option agreement with BEIG3 that represents a highly exciting opportunity for the Company. We look forward to further developing this under-explored region of Cameroon and to working towards generating some early drill targets over existing gold anomalies in what is a relatively new prospective belt.

Director Participation in the Placing

Please refer to the Company’s announcement of Wednesday 13 June for details of the directors’ participation in the Placing and details of the related party transaction.–sti-/rnxs/

Risk Warning

Market and Funding Risks

  • Continued Access to Equity and Debt Capital to Maintain Solvency and to Fund Operations
  • Excessive Cost of Available Capital – Interest Rate Fluctuations – Discounted Equity Offerings
  • Currency Volatility in the UK and in Currencies in Which the Company Operates
  • Deterioration in Commodity Prices
  • Company Share Price Volatility
  • Commodity Investor Risk Appetites
  • Low World GDP Growth– Perceived Demand for Commodities May Decline
  • Natural Resource Market Sentiment
  • Perceived Oversupply of Certain Commodities

Geological Risks

  • Base Probability of Exploration and Development Success
  • Time and Monetary Costs of Drilling Unsuccessful Prospects
  • Low Rate of Deposits and Reserves Developed from Targets
  • Geological Setting Variations and Data Uncertainties
  • Style of Mineralisation and Variability of Geological Targets
  • Grade/Tonnage Issues – Failure to Achieve Economic Deposits or Reserves During Development
  • Uncertainty Over Recoverability of Reserves

Operational Risks

  • Operational and Development Cost Variability and Uncertainty
  • Natural Resource Policy and Regulatory Changes Impact Operations
  • Social License to Operate – Permitting and Approvals May be Denied and/or Delayed
  • Resource Nationalism – Threatens Project Ownership During Development
  • Infrastructure Access – Poor Infrastructure May Require Government Upgrades and Investment
  • Staffing and Expertise – Key Geological and Operation Staff May be Difficult to Recruit and Retain
  • Breakdowns of Key Plant and Equipment – Mechanical and Technical Problems
  • Extreme Weather Conditions at Operational Sites May Delay or Increase the Cost of Operations
  • Exposure to and Reliance on the Performance of Operating and Joint Venture Partners

If you are buying outside of normal market size then this may prevent you from selling the shares at market price.

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