Stratex International Plc / Index: AIM / Epic: STI / Sector:...

Stratex International Plc / Index: AIM / Epic: STI / Sector: Mining
Stratex International Plc
(“Stratex” or the “Company”)
Stratex Refutes Requisitioners’ Plan
Stratex, the AIM-quoted gold development and exploration company, provides an update in relation to the shareholder requisition (see the Company’s announcement of 19 September 2017). Stratex reports that it is has been made aware that David Hall and Paul Foord, who form part of the requisition group and seek to appoint themselves to the Stratex Board (the “Requisition Group”), have presented a strategy in a summary business plan (the “Requisitioners’ Plan”) to a select group of Stratex shareholders.
The Requisitioners’ Plan represents a reversal in their strategy as initially presented (Company’s announcement of 4 October 2017) and the Board believes it also exposes a number of fundamental flaws that shareholders of Stratex should be made aware of:

• The Requisitioners’ Plan involves combining the assets of Stratex and Thani Stratex and moving immediately towards acquiring production assets

Having contested the proposed Crusader acquisition on the grounds that a move towards production and cash flow runs contrary to the best value outcome for shareholders, the Requisitioners’ Plan details how they are themselves looking for cash flow and are in negotiations to acquire an Egyptian tailings dump which they intend to re-process to produce gold. No mention is made of the country and technical risk, lack of operating experience or funding requirements.

• Reversal of focus on gold and potential expansion into base metals

The Requisition Group have highlighted an intention to acquire new ground in Botswana and Namibia that will focus on copper and zinc, a marked departure from Thani Stratex’s and Stratex’ gold focus.

• Unsubstantiated promises to Stratex shareholders of Thani Stratex’s potential

Thani Stratex has consistently targeted >1moz Au resource at the Anbat project in Egypt. In the Requisitioners’ Plan they reference Thani Stratex’s exploration programme as having delivered an inferred resource of 208koz Au at Anbat.

At Thani Stratex's 50%-owned Pandora project, the Requisition Group claim an “in-house non-JORC resource” of 500koz Au. Although Stratex agrees that the Pandora project is prospective, this estimate is on the basis of just 2,159m drilling for 15 holes and the Board believes should be considered highly questionable.

• Significantly cut overheads, targeting US$2-3 M in savings

The Requisitioners’ Plan specifies that they would seek to significantly cut overheads by US$2-3m. Total current Stratex overheads are less than the targeted savings they hope to achieve.
The Requisitioners’ Plan also contemplates closing the Company’s Turkey and UK offices with an associated loss of the majority of Stratex staff, primarily six of seven experienced geologists.
To date Stratex has received irrevocable commitments to vote against the resolutions from shareholders representing 4,119,655 Stratex ordinary shares, equivalent to 12.34% of the issued share capital of the Company. This includes 981,171 Stratex ordinary shares, equivalent to 0.42% of the issued share capital of the Company, from directors of the Company.
Stratex will provide further updates in due course. The Board continues to recommend that shareholders VOTE AGAINST all resolutions to be proposed by the requisition party at the general meeting on 1 November.

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