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UPDATE - Stratex International advances Tembo Gold investment

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Stratex International's (LON:STI) previously announced investment into Tembo Gold (CVE:TEM) to gain a 10.3% stake has taken a step further.

Following shareholder agreement, the firm has inked a subscription agreement to the tune of C$1.657mln.

As reported earlier this month, Stratex is part of a strategic group of investors that includes the New Africa Mining Fund II and Concept Capital Management. The trio are funding up to £5.2mln (C$8.66mln) to continue work on the Tembo gold property in Tanzania.

It is Stratex’s first investment in Tanzania, adding to its portfolio of Turkish and East and West African assets.

Stratex chairman Christopher Hall told investors: "The remaining hurdles are largely administrative and we expect all outstanding conditions to be met soon, enabling us to get started on the ground.

"We look forward to pulling together the encouraging results obtained by Tembo and focussing on the objective of defining a resource. We will announce the closing as soon as it is confirmed.”

The trio could end up controlling more than 60% of Tembo, whose gold property comprises 100 square kilometres of highly prospective licences and applications in Tanzania, next to Barrick Gold’s Bulyanhulu mine.

Broker Northland, which rates the shares a 'buy', highlighted the project has 33 prospecting licences and five prospecting licence applications that have a proven and probable reserve of 10.6 million ounces of gold

Tembo had received encouraging results from 35,000m of drilling on six targets at the project but hadn’t defined a resource, says Dr Ryan Long.

"...we believe Stratex and the other investment group members can add significant value to their stake in Tembo by funding the resource definition drilling. Stratex continues to look significantly undervalued and we maintain our price target of 12.8p."

Stratex shares were unchanged at 4.375p.

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