Placing to raise £2.1 million and Director’s...

Sula Iron & Gold plc / Index: AIM / Epic: SULA / Sector: Natural Resources   

7 March 2014

                Sula Iron and Gold plc ("Sula" or the "Company")                

               Placing to raise £2.1 million and Director's Dealing               

Sula Iron and Gold plc, a multi-commodity exploration company focussed on
Sierra Leone, announces that it has conditionally raised a total of
approximately £2.1 million, through an oversubscribed placing of 93,333,272 new
ordinary shares of 1p each in the capital of the Company (the "Placing Shares")
at a price of 2.25p per Placing Share (the "Placing Price") with institutional
and other investors ("Placees") (the "Placing").  Every four Placing Shares
also include a warrant to subscribe for one further new ordinary share at 4
pence per share ("the Warrants"). The net proceeds of the Placing will be used
to conduct further infill drilling to enable the Company to define a JORC
Direct Shipping Ore Mineral Resource Estimate by the end of 2014 (the "Drill
Programme"), which will help to further determine the commercial value of the
Company's flagship Ferensola Iron and Gold Project located in the mineral rich
Sula-Kangari Greenstone Belt in Sierra Leone (the "Project").

The Drill Programme, prepared by SRK Exploration Services, is anticipated to
commence next month, with the first drill core expected to be sent for analysis
within weeks thereafter. The Company anticipates regular news flow and drilling
updates throughout the 2014 field season as it works towards defining a JORC
resource.

The Board's confidence in the Project's iron ore prospectivity is underpinned
by African Minerals Limited's ("African Minerals") contiguous 12.8Bt Tonkolili
iron mine. African Minerals has an integrated mine, rail and port
infrastructure in place, and made its first product shipment in November 2011.
Significantly, African Minerals announced in January 2014 that exports totalled
12.1Mt iron ("Fe") during 2013, with 3.8Mt Fe exported in Q4 2013 and
production on track to achieve a 20Mtpa sustainable run rate.

Sula CEO Nick Warrell said, "I am delighted to announce that we have
successfully raised £2.1 million. These funds will enable us to commence our
stated exploration objective; conducting infill drilling at our highly
prospective Ferensola Project, with the ultimate aim of defining a JORC Direct
Shipping Ore Mineral Resource Estimate by the end of the year. The Project's
iron prospectivity is well established, with previous exploration demonstrating
consistently high grade iron mineralisation on a 2.2km section of a 3.1km
banded iron formation, which is coincident with a strong linear magnetic
anomaly proven to extend from African Minerals' 12.8Bt iron Tonkolili licence
area. With a strengthened cash balance, highly prospective licence and defined
exploration programme, this is a very exciting time of development for the
Company."

The Placing Shares will, when issued, rank pari passu in all respects with the
existing ordinary shares of 1p each in the Company ("Ordinary Shares
"). Application has been made to the London Stock Exchange for admission to
trading on AIM of the Placing Shares ("Admission"). Completion of the Placing
is conditional on, inter alia, Admission.

 It is expected that Admission will become effective and that dealings in the
Placing Shares will commence at 8.00 a.m. on 24 March 2014. As set out above,
Placees will receive one Warrant for every four Placing Shares subscribed for,
exercisable at a price of 4p per share for a period of three years from 24
March 2014.

Following the issue and allotment of the Placing Shares, the Company's enlarged
issued ordinary share capital will comprise 281,484,958 Ordinary Shares ("
Enlarged Share Capital").  The Company does not hold any Ordinary Shares in
treasury.  This figure of 281,484,958 Ordinary Shares may be used by
shareholders in the Company as the denominator for the calculations by which
they will determine if they are required to notify their interest in, or a
change in their interest in, the share capital of the Company under the
Financial Conduct Authority's Disclosure and Transparency Rules.

The Placing was conducted by Daniel Stewart & Company Plc and Allenby Capital
Limited.

Director's Dealing

The Company announces that Matt Wood, a director of the Company, has subscribed
in the Placing for 444,444 Placing Shares at the Placing Price. As a result,
Matt Wood is interested in 444,444 Ordinary Shares, representing 0.16% of the
Enlarged Share Capital.

 

                                   **ENDS**                                    

 

For further information please visit www.sulairongold.com or contact the
following:

Nick Warrell                Sula Iron & Gold plc           [phone]
                                                                               
Matt Wood                   Sula Iron & Gold plc           [phone]
                                                                               
James Caithie / Avi         Cairn Financial Advisers LLP   [phone]
Robinson                                                                       
                                                                               
Martin Lampshire / David    Daniel Stewart & Company Plc   [phone]
Hart                                                                           
                                                                               
Chris Crawford / James      Allenby Capital Ltd            [phone]
Reeve                                                                          
                                                                               
Felicity Edwards /          St Brides Media and Finance    [phone]
Charlotte Heap              Ltd                                                

Notes

Sula Iron & Gold plc is a multi-commodity exploration company focussed on West
Africa. The Company's main objective is to explore and advance its 153 sq. km
Ferensola Project, in Northern Sierra Leone, which is highly prospective for
iron and gold. The Company is focussed on delineating a maiden JORC compliant
iron resource both on the DSO and magnetite in 2014, and proving up the gold
mineralisation in order to maximise the Ferensola's value potential. An
exploration target of 500 million tonnes at 30.4% iron for magnetite has been
given by exploration consultants SRK Exploration Services Ltd.

Exploration work at Ferensola has confirmed the presence of Banded Iron
Formation ("BIF") at surface, which has a known strike length of 3.1km.
Significantly, the BIF is proven to extend NE from African Mineral's 12.8
billion tonne operational Tonkolili iron mine, into Sula's licence area, which
is located contiguously to Tonkolili. Furthermore, a 2,000m scout drilling
programme conducted over a 2.2km section of BIF in July 2013, confirmed
consistently high grade iron mineralisation at Ferensola.

Significant Greenstone Belt-style gold mineralisation has also been identified
at various prospects within the licence area. Five target areas for hard rock
gold mineralisation have been identified based on the location of historic
drill intercepts, the source areas for alluvial gold deposits, and the position
of major structures as defined by airborne magnetic data and drainage
orientation. Field work has been carried out recently and, following the
processing and interpretation of all geophysical and assay results, Sula will
be able to define robust drill targets at two principal target areas - the
Lagunda and Yanfarina prospects. Further targets are yet to be explored.