Stratex Share Discussion Threads

[charles clore] 04/1/2017 11:25

Would it not be better to try and focus on a positive future rather than what some perceive as a botched up past? The past is gone. What we are left with is an opportunity for this company - under new leadership - to provide excellent returns for shareholders. I like to read past reports and try to understand from them the difficulties and how they will be overcome. Also making my own judgement as to the final outcome. I do not read anything negative into Altintepe - except perhaps that it has taken a lot longer to achieve the cash cow than I ever expected but it is, nonetheless, getting there. This report by Chris Hall is well worth reading again imho posting the article as it won't accept the link

Stratex’s Altintepe gold mine is now generating hard cash
12:27 16 Aug 2016
Stratex's Altintepe mine has now delivered seven months of gold production
Stratex’s Altintepe gold mine is now generating hard cash
Gold production is now well underway

First half results from Stratex International plc (LON:STI) have confirmed that after a slightly protracted process the Altintepe mine is now up and running well.

For the six months to June Altintepe produced 19,467 ounces of gold, which translated into revenues of nearly US$33 mln for Altintepe Madencilik, the operating company 45% owned by Stratex and 55% owned by its partner, the Turkish conglomerate Bahar Madencilik.

“We’re quite confident with 19,000 ounces produced in the first half that we’ll hit the 30,000 ounces annual target,” says Stratex chairman Christopher Hall.

“We had some hiccups in the beginning,” continues Hall. “We knew the ore was clay-rich but we thought the plant could handle it. It couldn’t – and a new circuit had to be added. Now, though, the mine is working well.”

So well that serious cash is now flowing in and, with operating costs at around US$560, margins are looking very healthy indeed.

The slight disappointment is that although cash is starting to build up in the operating company, there’s no immediate sign of it filtering back up to Stratex itself.

It’s perhaps partly because of that that the shares are now slightly off their early July 2.40p highs, although at the current 1.98p they are still up by around 70% on the beginning of the year.

No doubt a distribution will eventually come, but for now the complexities of being a minority partner in a Turkish operation are mitigating against.

“It’s a question of deferred distribution rather than lost distribution,” emphasises Christopher Hall. In the short-term, he explains, cash needs to be set aside for development capital and for closure planning.

Chief executive Bob Foster gives further detail in written commentary accompanying the second quarter update.

“We are working with Bahar to establish a sound policy for funding future capital expenditure and mine-closure costs,” he says. “Once these requirements have been agreed and accurately costed, the level of distribution of net cash to both parties throughout the life of mine can commence.”

Foster also points out that Bahar will be entitled to an 80-20 split until their up-front capital is repaid. But Hall emphasises that this was capped at US$39mln and any overrun was at Bahar’s own cost – he is impressed that they have delivered what now looks to be a fairly high-end operation.

And all told, it’s a relationship that’s held up well over the past few years, to the point where Hall calls Altintepe “the high spot” in Stratex’s project portfolio, which is many and varied.

“We have seven months of production that we’ve reported,” he says. “It’s now firing on all cylinders and we can now look forward to it being a medium-term operation.”

The only real sadness, given the margins that are on offer, is that the mine life isn’t any longer, but that may yet change as further drilling takes place in the coming months.

Meanwhile, Stratex’s activities elsewhere continue. Investee companies Thani Stratex and Goldstone Resources (LON:GRL) have both raised money in recent months, taking advantage of a funding environment which Hall says is now offering “improved terms.”

This raises the possibility that with favourable tailwinds in the markets and with cash now coming in from Turkey, Stratex itself may embark on a new undertaking.

“We are looking for an acquisition,” says Hall. “We’re looking at second tier assets that are being put up for sale.”

What would be ideal, he says, would be “a second Altintepe in the right jurisdiction in Africa.”

This time round though, although Stratex is after a similar asset it might go for more favourable terms. The idea, says Hall, would be to bring in a partner but retain control. That way, he says, it would be “a step forward from Altintepe.”

But the repeated reference to Altintepe is instructive. It’s here that Stratex has delivered - and is delivering - on its long-stated strategy of project generation.

The trick at Altintepe was to get someone else to pay for the development. If Stratex can do that on its next project and still retain control, it will mark a real step forward.

[5huu] 04/1/2017 11:05

I agree Juju. All talk of our new"experienced & optimistic" CEO is all hot air until we see clear answers on these outstanding points.We've got to give him time to sort out the mess left by the previous board, but Steve's points need answering.

[charles clore] 04/1/2017 11:00

Gentlemen - I am not the kind of person to revel in negativity because I have learned through experience of its effect on the human psyche. If I am not happy with something I may say so and might even write to the CEO but I do not keep on persistently highlighting its negative attributes. That is why I call it tripe. If I look for positives in Stratex I can find many examples. Anyone who cannot should not be invested here imho.

[juju44] 04/1/2017 10:55

Most of the vitriol here reflects peeps frustration at the arrogant indifference or total incompetence of the board .Amazing what they can get away with

[steve1905] 04/1/2017 10:20

'Negative tripe'. Which point is untrue?

[flavio_monteiro] 04/1/2017 10:18

Well said Charles!

[steve1905] 04/1/2017 10:09

You've nailed it golden. You ask a pertinent question. Stratex never bothered with 3rd quarter figures and never explained why. You have to be the judge. Is everything going smoothly between Baha and Stratex - who knows the company have been shtum for months. You may wonder how the court case went?, well so do we - nothing ever said 2 years later. I hear you thinking. "Yeah, but they have a new man at the top and things must be happening". You could be forgiven for thinking that, but all we have heard (via a presentation) is a rehashed " share holder value, asset purchase of advanced projects ". In fact there has been nothing from the management team for months. Oh hang on, we got a RNs on 1500 Quid's cashflow coming from GRL (which is probably being paid from Stratex loan.
Don't worry about checking if management have dug in their own pockets and bought shares at these 'ridiculously low prices'. - they haven't.

[charles clore] 04/1/2017 10:09

Goldendigger - I think it boils down to faith at the moment as we have no definitive statement from Bahar as to their intentions either way and neither would I expect one. If you talked yourself out of owning a piece of the action you will have to decide whether you want to take a chance on getting back in. Bearing in mind that every day the mine is in operation and making a profit, the closer we get to when something has to give. Altintepe is cash rich and there is a distribution agreement of which I am sure you are aware.

[goldendigger] 04/1/2017 09:38

Been out of STI for some time after being a holder here for years. Had a quick look over the last few pages of posts and looks like not much has changed! Where are the Q3 production figures. What's going on? I would like to get back in here with the share price so low but uncertain that Bahar are playing ball. Would appreciate some comments.

[charles clore] 03/1/2017 23:47

novice - actually I agree with the thinking that dictates you can't start divvying up profits before you know what those profits are going to be (within reason) year in, year out for the life of the mine. I expect both Bob and Bahar thought the same except Bob was maybe a bit too embarrassed to let shareholders know which is possibly why he was replaced. We will likely never know for sure but I doubt his resignation was voluntary.

[novicetrade68] 03/1/2017 19:53

That would be my line of thinking too Charles. The mine is profitable and performing above expectation if the previous announcements are anything to go by, so if at last we can get idea of what will be net to STI then we should easily double. Interesting comment about the City's view on the board, wouldn't surprise if me if they'd just viewed Bob and Chris as too much old school, let's just hope Marcus leaves a better impression.

I hope Marcus really stands his ground with his Turkish partners, I think Bahar may well have viewed Bob as too easy to fob off during a nice diner and some belly dancing with promises of cheques in the post which never arrived.

[charles clore] 03/1/2017 18:48

novice - I remember that forestry permit rather well and to my surprise it didn't make that much difference to the price. What has also surprised me is the arrival of Marcus has not done a lot for the share price either. I thought it may have changed the City boys hard line but they are apparently unimpressed. Mind you, I hold a few other PM stocks at the moment that are not moving so maybe it's a sign of the current state of the market. I also understand why Marcus would choose to say less publicly and do more behind the scenes as he finds out everything he can about the company before making any big moves. A friend in the know once told me that the City didn't like the board because they were too overweight with geologists which didn't bode well for company profitability. Now that we have 2 less geos at the helm and a new successful businessman successor I guess the key question now is, can Marcus unlock the Altintepe Madencelik bank vault and share out some of the cash (or rather more appropriately, get some of it transferred to the Stratex bank account). If the man in charge can be seen to do that, then I think the share price will multibag like a coiled spring.

[novicetrade68] 03/1/2017 18:23

Let's hope so CC. What is a bit disappointing sometimes with STI is that we're always waiting for some sort news which we hope will propel the share price higher. I remember from long ago, that if STI would get their forestry permit the project would be derisked and future production could get priced in and it turned out that wasn't the case. I hope that monies coming in from Altintepe will at long last provide the proverbial rocket and hope the new CEO sticks to his word and provides some sort of update during Q1.

[charles clore] 03/1/2017 16:14

Some heads are kind of nodding now, and that's before any news. Even juju is using words like deliver, exciting and progress! If gold rises into the first quarter I believe it will do wonders for this company.

[juju44] 03/1/2017 16:07

STI has not moved

[romeike] 03/1/2017 16:02

STI up about 4%, not much but we welcome any rise at this stage.

[romeike] 03/1/2017 16:00

Were possibly worth the punt then :D Hopefully good drill results soon, will benefit GRL and Stratex

[novicetrade68] 03/1/2017 15:41

Ah, ok my bad, didn't realise more results were due.

I guess re STI it will only be any developments regarding Altintepe to get the share price moving.

[shortarm] 03/1/2017 15:38

Their drilling results are due... Mentioned as being exciting in December...Interesting that STI own 33+ percent and not even a flicker of a rise.

[novicetrade68] 03/1/2017 15:25

I though GRL was done drilling their two holes for the moment, sorry if that reads a bit funny, but perhaps they'll announce some 'other' developments this week ?

[juju44] 03/1/2017 15:16

2 years of no progress . Graveyard would be more exciting than this dog . Maybe thats where we will all be before they deliver anything

[kingivor] 03/1/2017 14:21

HNY all. Yep looks like some have wind of news at GRL.

[soulsauce] 03/1/2017 13:49

Would prefer news from STI :-/

[5huu] 03/1/2017 13:46

News tomorrow from GRL me thinks..?