Stratex International (LON:STI) is ready to step up activity significantly in East Africa alongside its major partner Thani Ashanti.
The firm’s East African gold business took a step forward today as its deal with Thani Ashanti became unconditional.
In October Thani Ashanti - an alliance between one of the world largest gold producer AngloGold Ashanti (NYSE: AU) and Dubai based investment firm Thani - conditionally agreed to earn into the AIM-listed gold company’s projects in Ethiopia and Djibouti.
The assets span 2,780 square kilometres in the Afar Depression, which straddles Ethiopia and the Republic of Djibouti.
This morning Stratex confirmed that all the conditions of the October ‘heads of terms’ agreement have now been satisfied and as such the parties will go ahead with the project. Crucially Thani Ashanti’s US$500,000 investment in Stratex has also become unconditional.
To help it move forward with its active projects in both east Africa and Turkey, Stratex has decided to reorganise its board.
Subsequently David Hall – the current chairman – will step down from his role so he can focus on the East African assets. Non-executive director Christopher Hall will step up to take the role of chairman. Meanwhile Bob Foster remains chief executive.
“We welcome Thani Ashanti as a significant shareholder in Stratex, with approximately 2% of the equity, and look forward to making rapid progress with the evaluation of our numerous discoveries in the Afar region," David Hall said.
The new executive director of East Africa operations adds: "We are firm in our belief that the Afar region is emerging as a new gold district similar to that of the Santa Cruz gold region in southern Argentina,
“The Agreement and the Placing with Thani Ashanti allows Stratex to significantly step up the level of activity in Ethiopia and Djibouti.
The ‘heads of terms’ agreement set out the basis on which Thani Ashanti can earn up to 70 percent of the Afar project.
Thani Ashanti can initially earn up to 51% of the Afar Project by spending US$3 million on exploration and development over two years. In the first year Thani Ashanti must spend US$1 million. Also under the agreement, Thani Ashanti can acquire further 19% in Afar, by spending another US$4 million on any one licence in the project area.
Thani Ashanti’s initial spend will focus on the Megenta gold discovery in Ethiopia, with a 3,000 metre drill programme expected to fast-track exploration.
“With the Megenta 3,000 metre drilling programme expected to start in March 2011, the regional work load will increase markedly,” Hall said.