The broker noted that the share price had already increased 53% since the company began a new strategy to deliver increased shareholder value.

The initial strategy laid out in April comprised three elements, including joint venturing its current gold assets and exploration portfolio to reduce risks and costs and exploring the possibility of using its cash to acquire assets outside of Turkey.

Since them, the company has formed two JVs (joint ventures) to develop its existing projects in Turkey and implemented the third part of the plan by acquiring a 5.6% stake in Sheba and signing an earn-in to an initial 60% of Sheba’s Shehagne gold project, which can later be increased to give the company a 80% holding.

The two companies also formed a JV split 70:30 in Stratex favour to explore and acquire licenses over new prospective targets in northern Ethiopia.

Hanson Westhouse said Ethiopia and the underfunded Sheba were a good fit for Stratex, also noting the world’s largest miner BHP Billiton’s interest in the country’s potash resources, while another high profile miner Antofagasta recently agreed to invest US$10 million in exploration projects in Eritrea, just north of where Stratex and Sheba are focusing their attention. Another junior, Dwyka Resources (AIM & ASX: DWY), also recently entered the country and released a maiden resource statement at its primary gold project this week.

The region has been associated with an unstable political and economic environment, but the situation appears to have changed to the better, which is reflected in the increased interest from some of the market’s leading players, Hanson Westhouse said in the statement.

The broker valued the company at US$20 million, or 8p per share based on its current assets, investments and cash reserves, representing a significant premium to its current stock price of 3.75p per share. Hanson Westhouse’s previous valuation put Stratex at 6.9p per share back in August, prior to the company’s expansion into Ethiopia.

Stratex rallied almost 17% on the London Stock Exchange, rising to 4.37p per share. Source: (Proactiveinvestors)

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