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Stratex (LON:STI) unveiled plans to set up a new company for its East African assets, which, it says, will strengthen its position in the region.
The new firm will be in partnership with Thani Emirates Resources Holdings - and will be a vehicle for growth in the Arabian Nubian Shield and Afar region.
Both firms will contribute US$1mln working capital and Stratex will own 40% of the new business, once it has divested certain assets.
Stratex executive director David Hall highlighted that Thani was a highly respected and prominent UAE-based company with extensive business knowledge and relationships in the region.
"We believe that, with the complementary skills of each partner, namely Stratex's technical expertise in exploration and the regional influence of Thani, this new company will provide the mechanism for achieving the new company's strategic objective to become one of the leading mineral resource developers in the region.
"The new company will initially focus on drilling the Pandora epithermal system in Djibouti as well as advancing key projects in Egypt that show potential for large Sukari-like gold deposits, as well as a range of other deposit-types with large-scale gold and copper potential.
"The partnership will continue to develop projects within the portfolio and has already identified other opportunities in the region that warrant further investigation. An evaluation process of these opportunities is currently in progress."
Following the deal, Thani will vest the Wadi Kareem and Hodine concessions, previously worked with AngloGold Ashanti, where a non-JORC resource of 520,000 ounces has already been defined at the Hutite prospect.
Stratex will vend in its Blackrock concession in Ethiopia where around 10,000 metres of drilling has confirmed the presence of epithermal gold mineralisation.
Broker Northland rates Stratex shares a 'buy' targeting a price of 10.9p.
Significantly, it says, the deal allows the firm a greater exposure to additional exploration prospects and introduces tangible value by means of exposure to the Hutite prospect.
"The deal also means that drilling at the exciting Pandora prospect in the Epithermal district of Djibouti will restart.
"The new company will benefit from Thani’s regional influence and Stratex's geological expertise as the company seeks to become a leading mineral resource developer in the region," it said.
Stratex shares edged 0.81% higher to 3.10p.