Setting a 12p per share price target, Stratex’s house broker based its assessment on the ‘imminent commissioning’ of the Altintepe mine.
Altintepe is the company’s most advanced project and is being developed as a gold mine by Stratex’s local Turkish partner, Bahar, which is funding the estimated US$39mln capital expenditure to earn 55% of the project.
The mine is currently under construction with the first gold pour expected to occur early in 2015, subject to winter weather.
“In our view at US$30m, the Altintepe phase 1 project alone is worth more than double Stratex’s current market value,” said the broker.
Stratex has operated in Turkey since the company’s formation in 2006 and despite subsequent expansions into East and West Africa its Turkish operations are still at the core of the company's business.
SP Angel says Stratex’s Turkish business remains ‘pivotal’ and this is reflected in its valuation, which attributes US$66m (76%) of the company’s value to its Turkish businesses.
Stratex has a current market value of £13mln.
The broker also commented on the firm’s healthy cash position (£5.3mln as of October) and says unlike many junior exploration companies, Stratex is well placed to fund its own exploration programmes.
Meanwhile, strategic investments in GoldStone Resources (LON:GRL) and Tembo Gold bode well for the future.
In October Stratex acquired 34% of Goldstone Resources for £1.25mln.
Goldstone has an advanced exploration project at Homase/Akrokerri near AngloGold Ashanti’s flagship Obuasi mine in Ghana as well as other early-stage assets in West Africa.
Stratex shares are currently priced at 2.7p.