The completed sale of Stratex’s (LON:STI) share of the Oksut project to partner Centerra for an initial £12.6mln (US$20mln) has Northland Capital looking at the mismatch between the company’s current value and broker’s target price.
The injection of funds will leave the AIM-listed explorer with around £14.5mln of cash at the year-end.
This suggests an enterprise value of just £8.3mln at the current share price of 5.15p (up 6%), said analyst Dr Ryan Long.
Reiterating his buy advice and 12.8 pence a share price target, he added: “With a very strong balance sheet, a number of potentially high impact projects, a proven record in gold discovery and the commencement of production at Altintepe expected this year, shares are significantly undervalued.”
Earlier the group confirmed it had completed the sale of its 30% stake in Oksut. The deal could ultimately be worth double the amount initially handed over.
The proceeds of the sale will be used to advance the company's exploration and drilling programmes in Ethiopia and Senegal, as well as allowing it assess new exploration initiatives in Turkey.