By Alastair Ford
“Construction at Altintepe, all being well, will complete by the end of this quarter”, says Stratex International’s Bob Foster. All eyes are on this, the company’s leading Turkish asset, because when it does finally come into production it will deliver Stratex its maiden operational cashflow, albeit that it will be delivered through a joint venture with a Turkish partner.
It’ll be a real feather in the cap too, for Stratex, which has shown a notable ability over the years to survive the slings and arrows of outrageous markets that have felled lesser juniors. The company’s activities as a project generator have continued unabated and, with Altintepe providing a new and reliable source of long-term cash, look set to continue on well into the future.
Not that it’s all been plain sailing. Construction at Altintepe has been subject to delay, “because of the rains”, says Bob. “The impact has been on the leach pad, where you’ve got to have a firm base.”
But Stratex’s partner Bahar Madencilik is now pressing on again, such that it is now a matter of counting in weeks rather than months to the time when the project produces its first gold.
What’s more the margins ought to be very healthy indeed, and not just because the gold price is at long last showing signs of life again. “At Altintepe costs should come in at around U$600 per ounce”, says Bob. “We’re looking at good margins.” Indeed, with gold hovering at around US$1,300 again, that’s something of an understatement.
And Bob’s relatively confident that the gold price is likely to remain relatively robust in the near-term. “Perception has reawakened that it’s still a safe haven”, he says. “I think we’re not going to be grubbing around at US$1,200 for now. But it depends on what the fallout is going to be from Switzerland.”
And indeed from the Eurozone’s new programme of quantitative easing. And from the Greek elections. And from the movements in the dollar and the oil price. And from ongoing tensions the Middle East. In fact, there’s a rising tide of uncertainty right across financial markets that’s likely to be favourable to gold.
And one way or another, that’s why Stratex is going to keep on looking for more of it, and for more of it to produce.
“We are explorers”, says Bob. “And we are continuing to explore. And we have good projects.” There are others in Turkey, including Muratdere, which is currently proceeding under the umbrella of another joint venture, this time with Turkish investment company Pragma. A feasibility study there is ongoing, and an update is due fairly soon.
Then there’s the Africa interests. The East African portfolio has now been spun out into a new vehicle in joint venture with Middle Eastern investment vehicle Thani. But Stratex retains a direct interest in projects in Senegal, and exposure to assets in Tanzania via a stake in Tembo Resources, and in Senegal, Ghana and Gabon via a stake in Goldstone Resources.
Where these projects will all be by the end of the year remains to be seen. As ever the drill bit will be the arbiter of a great deal. But Bob remains upbeat, buoyed by a £3 million cash pile in the bank which should see the company through the next 12 months and beyond, and by the impending cash flow.
“We will be sharing in gold production and we have gained expertise through this”, he says. “And we’ve gone on record as saying we want to grow production.”
Where and how will be a matter for another day, and will in part be decided by the attitude that influential shareholders like Sprott take.
But in the immediate term, Stratex looks set fair. If the gold price continues strong the share price just might take off on the new production and on any exploration success. We shall wait and see.