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Stratex International (LON:STI) has struck a deal with a Turkish operator that will see exploration take place at the Karaağac gold project.
Under the terms, Anadolu will budget up to US$1.5mln for exploration and drilling within a maximum period of two years.
Anadolu will pay Stratex US$500,000 cash if minimum JORC-compliant indicated resource of 50,000 ounces of gold is confirmed within the two years, plus a 1.5% net smelter returns royalty on any future mineral production.
An application has also been made to the Turkish authorities for the transfer of the Karaağac exploration licence from Stratex's subsidiary to Anadolu and a further announcement will be made once this process is complete, said Stratex.
Bob Foster, Stratex chief executive, told investors: "We are delighted to have signed this agreement with the operating subsidiary of a major Turkish company.
"Karaağac is not a core project for Stratex, and has been on hold for several years, but we have always felt that it has potential for upgrading the resource.
"This agreement allows us to share in that upside potential should it be realised and the eventual royalty flow would augment our anticipated cash flow from Altintepe and from the Öksüt project where we will benefit from a 1% NSR royalty when it is put into production by Centerra Gold."
At the project, Stratex has previously defined an in-house non-JORC compliant inferred resource of 6,389,011 tonnes grading 0.78 g/t of gold for a total of 156,798 ounces.
The project was valued at around £53,000 in the group's latest financial statements.