Stratex Share Discussion Threads

[luminoso] 11/8/2016 21:24

Thanks, blobby.

[observer007] 11/8/2016 19:28

Oh and another matter, has anyone seen any closure cost statements or potential cash distribution delays, over at Turkish based Ariana, are these still to come I wonder??

It is worth remembering that Stratex management are ultra conservative, the mine is beating forecasts on production and cash generation but they still refuse to promote it strongly.

The mug(s) that are trashing the company are financially broke, they cannot buy the shares even if the want to. They are bitter, angry, aggressive due to the fact they bought at 7p-8p+ and sold out at 1p-2p, they are certainly no experts at spotting undervalued companies.

[observer007] 11/8/2016 18:52

I see the multi alias loss makers are baying for blood at the other place.

Nothing wrong with the production update, had anyone dare suggest that production would be close to 20,000oz by end H1 back in November they would have said it was ramping and impossible.

Stratex are not strapped for cash, so what if the money takes a while longer to come. It makes no difference at all.

Focus on half year revenues of $33m and the rising hold price, focus on the cash costs of $560oz, one of the lowest around, focus on the ludicrous market value of Stratex which is under £9m.

Try buying in size at the current share price and see what happens!

[dogwalker] 11/8/2016 18:27

No, it'll be fine Charles. You'll always get someone ramping any old thing, just for the publicity if nothing else. No worries.

[blobby] 11/8/2016 18:24

Charles, unless something goes wrong (always a possibility) then production should be well over target.

On sales and production, I calculated that (on average) for every oz of gold there is 5 oz of silver so at 20$ per oz there should be 100$ over the gold price raised in sales. It still does not explain why sales should be so far ahead of production though. (better that way around though).

[charles clore] 11/8/2016 17:55

blobby - I agree with you and also could not work out how they get the $32.7m revenue figure from the production of 19.467k oz gold. Either they produced more than they are saying or something else. It will probably become clear in due course.

Despite some teething problems with the clay circuit which was probably due to scrimping initially to contain costs, everything else at Altintepe looks to be on track to meet the full year's target of 30k oz - although it seems more likely they will hit 40k imho.

Analysts won't like the absence of cash distribution and lack of financial and operational detail though so target price upgrades may be thin on the ground.

[blobby] 11/8/2016 17:32

I've been trying to get my head around the announcements quite a bit today. I have to say I'm not that sure I understand exactly what the production is, where we are with phase 2, what the likely costs for mine closure might be (in 15 years time?) etc etc. I just can't seem to reconcile the sales and production figures yet.

My easiest way to look at this is what Stratex say in Note 4. ie the companies share of profits for H1 is £1.6 million. It seems that production will be greater in H2 and it also looks like we are accelerating to a point where Stratex's profit share is 45% rather than 20% so I'd say we are beating targets set by Northland for example.

If Altintepe comes in with £3 million profit this year and this set to more than double soon then what does that make the project worth?

I think I can understand the cash sitting in the subsidiary at this stage. Neither Stratex or Bahar have received any money profits yet and I'm sure the Bahar accountant is just as keen to get it as we are.

[greedfear] 11/8/2016 16:49

Edit: double post.

[greedfear] 11/8/2016 16:47

Problem being that I don't trust Bahar (who is pulling the Altintepe strings). I think they've allready proven to be an unreliable partner. Coming up with all kind of extra costs that they should be compensated for before any distribution. This was not part of the original agreement. Why should Stratex be withold cash payment because of Bahars mistake(s)? How do we know what the extra costs are and how they're calculated? Or suddenly Altintepe can not distribute because of it has to reserve for mine closing expenditures. Why and how much? Where does this end? It looks to me like the Turkish way of doing business is that an agreement is not an agreement but only some kind of letter of intent. A never ending (re)negotiating story.

Meanwhile Stratex bod have proven to be incompetent imo. The unsecured loans to GRL still makes my blood boil when I think of that. And then the headless chicken talk of investing in (almost) producing goldminers. Guess what? You're (too) late, every opportunity there might have been past (two) years will cost you fivefold now. The incompetence keeps going on and on and on.

[romeike] 11/8/2016 16:13

What other company could turn H1 Revenues of US$32.73 million into a 16% share price crash? Who the fk is doing this company's PR?

[tightfist] 11/8/2016 14:04

Charles, GP;As an occasional visitor to this BB (and long term, patient holder) thanks for your straightforward appraisal of both mining operations and working within a JV relationship. More patience required before that growing cash generation starts flowing to STI. I keep reminding myself of the current mkt. cap.Cheers, tightfist

[charles clore] 11/8/2016 14:04

greedfear - just a feeling in the old water. I think by the time cashflow from Altintepe begins you may want to stay in.

[charles clore] 11/8/2016 13:56

Thanks guys, it's all there on the Stratex web site to be found if you need to check anything.

GamesPlayer - I would imagine Bahar is very keen to get their $39m and ongoing payments. Ironically it could be Bob the stickler who is holding things up!

[juju44] 11/8/2016 13:49

Good post Charlie

[gamesplayer] 11/8/2016 13:07

Bahar will presumably be keen to progress discussions efficiently so that they can get their hands on their 80% share that is currently sitting in the JV company.

[gamesplayer] 11/8/2016 12:58

Good post, Charles.

[gamesplayer] 11/8/2016 12:53

Just re-reading the 1st RNS. One thing that I missed before is that construction of the Phase II leach pad is underway. Isn't that only needed if the mine life is extended? If so, they must be pretty confident that it will be.

[charles clore] 11/8/2016 12:50

The situation is pretty straightforward as far as I can see.

A brief recap on the Altintepe mining operation ownership:

On 6th December 2011, the Company signed a Heads of Agreement to enter into a joint venture with private Turkish mining company Bahar to advance the 490,000 oz Altintepe oxide-gold project in northern Turkey to production.

Stratex subsequently transfered the two Altintepe licences to Altintepe Madencilik, a wholly-owned company of Stratex Gold AG, which in turn is wholly owned by Stratex International plc, and Bahar paid Stratex US$250,000.

Following the completion of an Environmental Impact Study and a Feasibility Study, Bahar has vested at 55% of Altintepe Madencilik and has commenced site clearance to facilitate construction.


It may, or may not, benefit anyone criticising the company to understand that all $32.73m generated (less $1.8m for capital costs including the new clay circuit) in H1 from the mining at Altintepe is held by Altintepe Madenlicik pending agreement over any outstanding costs, future mine development costs including drilling and analysis and net distribution of profits. I don't see anything unusual in that. To make it clear, to say that Bahar is withholding payment from Stratex is incorrect.

Improvements and modifications invariably have to be made at the start of a mine and it is only fair that both partners contribute, as the $39m agreement with Bahar was only to take the mine to production, not for any capital costs incurred afterwards. These have to be borne by both partners in the ratio of 55:45.


Production is progressing very well indeed and I would not be surprised to see an end of year figure of 40k oz at an increasingly favourable gold price.

The project is healthily cashed and Stratex has a healthy bank balance. By the time the partners have all the information they need to agree on the pot for division of profits it may even be possible to reimburse Bahar their $39m setup costs in one payment and skip the 20%, moving directly to a 9/20th share to Stratex from that point onward.

[juju44] 11/8/2016 12:42

What good news is that - Bob resigning ?

[romeike] 11/8/2016 12:19

Yet again investor communication is very poor with this company. They are very careful to headline all the uncertainties and shove the good news to the back.

[greedfear] 11/8/2016 12:11

Revenues means nothing, profit means nothing, all that counts is the hard cash that Altintepe will distribute to Stratex. Our "partner" is BS us. How many more costs will Bahar come up with that first have to be paid to them before any distribution to Stratex? What other reaseons will there be in future not to distribute cash to Stratex. I bet you it will be the legal objections people are having against Altintepes operation. Surely Altintepe should take the possible obligations of thist into account and reserve cash.
I can only hope Stratex will have it's day soon, so I can get out with an acceptable loss.
I've had it with these incompetent bunch of clowns! Overpaid, underdelivering, all should have retired years ago.

[romeike] 11/8/2016 11:24

And yet they are currently spending serious amounts of money based on cash they expect to receive. While still generally positive longer term I am very disappointed that they are not showing cash flow in this statement as it is inconsistent with their stated strategy. The fact they are spending and loaning out cash they have yet to receive is also concerning.