Stratex International PLC (AIM: STI) announced a move into Ethiopia via acquiring a stake in a PLUS-listed company that holds an exclusive exploration license (EEL) in the north of the country and entering a joint venture with its new partner to explore new prospective targets and licence areas.
So far, Stratex has been focusing on exploring, developing and then joint venturing projects in central and Western Turkey, and is now planning on repeating this in Ethiopia.
Stratex has put up £40,000 to take a 5.6 percent stake in Sheba Exploration (UK) PLC and has signed a binding letter of intent with Sheba to earn-in to an initial 60 percent of the prospective Shehagne project near the northern Ethiopian town of Adwa.
Additionally Stratex and Sheba have agreed a joint venture on a respective 70:30 basis to explore new prospective targets and license areas in northern Ethiopia. The company believes that potential license areas, which currently are under review, have excellent potential for gold and/or copper and massive sulfide occurrences. Under the terms of the new JV, Sheba may earn up to 50 percent of the JV by reimbursing Stratex a further 20 percent of the total exploration costs.
Stratex chairman David Hall said: “The Arabian Nubian Shield, which encompasses areas of Egypt, Sudan, Eritrea, Saudi Arabia and Yemen as well as Ethiopia, is a region with high discovery potential as shown by Centamin’s Sukari gold mine in Egypt, and Nevsun’s Bisha gold-rich volcanogenic massive sulphide deposit in Eritrea.
“We believe that Ethiopia offers similar exciting opportunities for rapid low cost discovery and is not subject to many of the economic and political constraints that neighbouring countries are exposed to, such as product sharing agreements and security issues. Ethiopia is both logistically and financially an easy and cost effective place to explore,” he added.
The company can earn 60 percent in the 50 square kilometre Shehagne EEL by expending £100,000 in the initial three months and a further £250,000 over the subsequent 18 months. It may also earn a further 20 percent by taking the project to completion of a feasibility study.
The Shehagne EEL has already been explored by Sheba and extensive gold anomalism in soil has been identified. The main target to date is the Tsemmetti prospect in the south-eastern part of the EEL where Sheba has defined a large – 100 parts per billion – gold-in-soil anomaly over a three kilometre strike.
Stratex intends to undertake regional sediment sampling of the entire concession and complete systematic exploration of prospects already defined.
Ethiopia’s mineral resources’ potential is high – gold copper zinc and potash are the major minerals mined in Ethiopia, the company said.
(By Andre Lamberti | Proactive Investors)