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Stratex International: 2014 looks to be "transformational", says Northland

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This year looks to be "transformational" for Stratex International (LON:STI), reckons City broker Northland.

Analyst Dr Ryan Long points to maiden production at the Altintepe project and the start of construction at Muratdere in Turkey as the reason.

"Not only are we expecting excitement from the development projects but the exploration projects also hold a lot of potential with drill results pending from both Dalafin and Tembo," he notes, rating the shares a 'buy'.

Earlier, the company updated on activities in Turkey and East and West Africa, saying it started 2014 from a strong cash position.

Its chairman Christopher Hall told investors 2013 had seen the group complete a 33,000 metre drilling programme on the Dalafin project in Senegal and begin a second phase diamond and RC (reverse circulation) programme, which is currently underway.

It has carried out follow-up drilling at Blackrock and Megenta in Ethiopia and made its first strategic investment in Tembo Gold Corporation based on the excellent prospectivity and proximity of the firm's ground holdings to the 14mln ounce Bulyhanlulu gold mine in Tanzania, it added.

"We start 2014 with a strong cash balance - approximately £10 million - and are increasingly confident of future operating cash flow from our 45% owned Altintepe gold mine in Turkey given the relatively short, six month construction period once we have received the final outstanding permits," said Hall.

The firm expects to release further results in the next few weeks from the Dalfin project, while results are also pending from drilling at Megenta.

"Stratex’s cash balance remains strong with £10mln in the bank and we look forward to further drill results and news on the advancement of the development projects," said analyst Long.

Meanwhile, house broker SP Angel said: "There is much to look forward to from Stratex. The team is focused on developing value and monetising gold and copper projects with a number of new areas offing good potential. We expect first production from the new gold mine this year to continue to support the company’s exploration and development programmes". It rates the shares a 'buy' targeting a price of 12.1p.

On AIM on Monday, shares gained 6.06% to stand at 4.375p.

Quick facts: Oriole Resources PLC

Price: 0.52 GBX

LSE:ORR
Market: LSE
Market Cap: £3.65 m
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