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Stratex International's shares falter as subsidiary sees Ethiopian licences cancelled
Stratex International saw its shares plummet on Thursday after it announced that its 30.4% owned subsidiary Thani Stratex Limited (TSR) has failed to renew two licences in Ethiopia.
The cancellation of the Blackrock and Cussra licences by the Ethiopian authorities has resulted in a write-off to the subsidiary's profit and loss of approximately $8.7m, for which gold focused exploration and development firm Stratex's share is approximately $2.7m.
Tim Livesey, chief executive of Stratex, said the cancellation stemmed from the fact that TSR had applied for a sabbatical at the licences until 2019 after making the decision to focus its attentions on "core projects" in Djibouti and Egypt, but Ethiopian authorities said such a move is outside the scope of the nation's mining legislation.
"Whilst this cancellation and the related write-down is disappointing, the projects in Ethiopia have been non-core for TSR since it formed in 2014 and its focus continues to be on its projects in Djibouti and Egypt," said Livesey.
As of 1543 BST, Stratex International's shares were down 26.92% at 0.47p.