Operational Overview

• Diverse portfolio of exploration and development projects across Turkey and East Africa
• Results from Feasibility Study at Inlice oxide gold project („Inlice‟) in Turkey expected soon – indications are that the project is economically viable and near term production on track for 2012
• Revised resource from scoping study at Altintepe oxide gold project („Altintepe‟) in Turkey expected Q2 2011
• Prospective portfolio of multi-stage exploration projects in Turkey with potential to offer significant value uplift
• Strong JV partners committed to developing licences further during 2011
• Formation of Stratex East Africa Limited („SEA‟) to hold all Ethiopian and Djiboutian gold assets – David Hall to lead the development of SEA in new role as Executive Director East Africa
• Rapid expansion in East Africa – building land position in the Afar Depression straddling Ethiopia and Djibouti to 3,853 sq km – total East African land position increased to 7,018 sq km
• JV agreement with Thani Ashanti to fast-track 11 licences in the Afar Depression, the first move by a mining major into the region
• Results from 3,000m drilling programme at flagship Megenta discovery in Ethiopia anticipated mid 2011
• Encouraging results from initial exploration of Northern Ethiopian Arabian Nubian Shield prospects highlighting prospectivity of Tigray region

Financial Overview

• Healthy cash balance of £996,157 resulting from a £1.3 million public placing and payments from JV partners
• Loss for the year of £2,875,668 (2009: £2,144,926) – increase due mainly to the loss on sale of 54% of the 100% owned subsidiary as part of the agreement with NTF regarding future development of the Inlice and Altintepe projects
  • In accordance with International Financial Reporting Standards these funding commitments, which should enhance future value, are not reflected in the calculation of the loss on sale. See note 2 attached to the financial statements.
• Increased administration expenses reflect the establishment of operations in East Africa and increased exploration costs not capitalised in Turkey

Chairman’s Statement

As the newly appointed Chairman of Stratex it gives me great pleasure to report on the progress your Company has made during the period. Since being appointed to the Board in early 2008, I have enjoyed the challenge of being closely involved in the direction of a growing junior company. The success of our gold exploration efforts in Ethiopia has prompted a more formal division of executive responsibilities, and I was delighted to take up the position of Chairman, allowing David Hall to focus on the development of the East African portfolio in the new role of Executive Director for East Africa.

Before moving on to a review of the year, I would like to pay tribute to the work and commitment of your outgoing Chairman David Hall, who has combined the roles of co-founder, Director and Executive Chairman for more than five years. Together with your Chief Executive Officer Bob Foster and the rest of the Stratex team, he has helped steer the Company from a concept to a well-supported and successful exploration and development company with a solid portfolio of assets in Ethiopia, Djibouti and Turkey, where we are also moving towards production in 2012.

In his last statement, David noted that Stratex had emerged from the financial crisis as a stronger and better positioned company. I am pleased to say that we have continued to advance throughout 2010 and I look forward to updating shareholders on our developments both in Turkey and East Africa over the coming year.

Stratex has made great progress through its existing joint ventures with mining majors Centerra Exploration B.V. („Centerra‟) and Teck Resources, and also with Turkish

company NTF Insaat Ticaret Ltd Sti („NTF‟). The Company has also established two new joint ventures with Thani Ashanti, an AngloGold Ashanti Limited joint venture company, and Ayendiz Group („Aydeniz‟), a leading Turkish construction company. Additionally, we have a large and growing first-mover land position in Ethiopia and Djibouti, which is shaping up to be an exciting new gold province with similar geology to the epithermal gold mineralisation that is prevalent in the Santa Cruz gold district of southern Argentina, and the Great Basin in Nevada, USA.

Developments at our Öksüt and Hasançelebi high-sulphidation gold projects in central Turkey are progressing well and we are confident that with further work they will add value to our Turkish portfolio. In March 2010, a maiden JORC compliant resource of 147,814oz of oxide gold was announced at our Öksüt joint venture with Centerra. We expect to significantly build upon this resource in 2011 and are pleased that Centerra has approved a US$1.3 million work programme for the current year. Additionally, our JV partner Teck Madencilik Sanayi Ticaret A.S („Teck‟) has approved a further 2,000m drill programme at our Hasançelebi project for 2011.

Recent drilling at our Muratdere porphyry copper-gold project in western Turkey has produced positive results and this project is being developed as part of an earn-in programme by Aydeniz. Drilling will now focus on the 1,500 metre-long central zone within the 4,000 metre-long porphyry complex that is of significant interest.

Stratex has built up a resource base of over 1.1 million oz of gold in Turkey, of which some 540,000oz is represented by oxide resources at Inlice and Altintepe. As shareholders will be aware, in late 2009 we brought in a large and respected Turkish partner, NTF, to advance these projects. The agreement was completed in April 2010 and we received US$1.0 million from our partner. NTF is expected to earn into 54% of Inlice and Altintepe and is now managing the programmes to move the projects towards production. The feasibility study at Inlice, an open pit heap leach project, is nearing completion and an early draft indicates that there are no fatal flaws although aspects of the cost assumptions require further definition. We are advised that first production is still expected in the first half of 2012. NTF is also funding a scoping study on the larger Altintepe project which consists of infill drilling and a baseline environmental study. We expect to deliver a revised resource in the second quarter of 2011.

Throughout the year, we have also continued to add to our land position in the highly prospective Afar region in East Africa in response to positive exploration findings, including the discovery of previously unknown gold-bearing epithermal targets such as the Megenta hot spring project in eastern Ethiopia. Our total land position in the Afar region is 3,853 sq km, bringing our total land position in Ethiopia and Djibouti to 7,018 sq km. Although we are beginning to see the entry of some competition, we believe that we will maintain our first-mover advantage, having been delineating targets in the Afar region since 2009.

In spite of the attractive results in Ethiopia and our high hopes for the future, your Board considered it prudent to reduce exposure to the initial very high risk phase of drilling, and in October 2010 announced a joint venture with Thani Ashanti, an AngloGold Ashanti Limited joint venture company, which, to the best of our knowledge, signalled the first move by a major into the region. The agreement was completed post-period end and resulted in a placement of US$500,000 into Stratex by Thani Ashanti. We look forward with great excitement to the first results from the 3,000m drill commitment at our Megenta discovery, expected mid 2011.

Stratex has made significant strides over the past year, buoyed by the strong and appreciating gold price, and we are now ideally positioned to capitalise on this by advancing our solid portfolio of exploration and development assets in Turkey and East Africa. Both the Inlice and Altintepe gold projects in Turkey should provide us with near-term exposure to production, which will not only generate cash flow but will also increase our market visibility and prove our ability to progress our projects through from development to production. In Turkey, 2011 is likely to be a year of steady progress towards known goals. We look forward to regular news flow with drilling results from our four established joint ventures, an increased resource at Öksüt and progress with additional low-cost, conceptual initiatives.

In contrast, if our work in the Afar region in Ethiopia and Djibouti generates results which are commensurate with the potential we see, the added value could be significant. Consequently, although we have minimised the early-stage risk with Thani Ashanti funding the initial drilling, Stratex has retained a growing land position outside the joint venture.

Finally it remains for me to extend my gratitude for the support we have received from our shareholders during the past year, and would also like to thank our excellent management team for its continued dedication as we progress as a leading gold exploration and development company in Turkey and East Africa.

Christopher Hall

Chairman

14 March 2010

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