Ferensola Gold - Project Update

RNS Number : 3149T

Sula Iron & Gold PLC

17 July 2015

 

17 July 2015

Sula Iron & Gold plc

("Sula" or the "Company")

Ferensola Gold - Project Update

Sula Iron & Gold plc ("Sula"), the exploration and development company focused on iron ore, gold and coltan in Sierra Leone, is pleased to announce that a JORC compliant Exploration Target has been defined for the primary gold target in the Company's flagship Ferensola Project after the assimilation of all historical exploration data and after receiving the assay results from a recent programme of independent check sampling.

Highlights:

·   Independent JORC compliant gold exploration target (the "Exploration Target") defined by SRK Consulting (UK) Ltd ("SRK") over a strike length of 2 km within the Ferensola licence.

·   The Exploration Target forms part of a large, complex fold structure, with a strike length in excess of 10 km with potential for high grade fold hinges to be targeted in future exploration.

·   Independent check sampling of historic drill core indicates apparent intersection thicknesses and reports grades of:

·     19.5 m at 9.2 g/t Au including 6.1 m at 14.8 g/t Au and 5.0 m at 17.4 g/t Au from historical drillhole SDD004

·     5.3 m at 3.4 g/t Au including 1.1 m at 12.3 g/t Au from historical drillhole SDD033

·     4.3 m at 5.2 g/t Au including 0.5 m at 21.0 g/t Au from historical drillhole SDD016

·   Eight (8) grab samples of "near source" artisanal "goldstone" within close proximity to a potential fold hinge report results of:

·     Average of 5.0 g/t Au

·     Minimum of 0.2 g/t Au

·     Maximum of 12.4 g/t Au

·   Two (2) grab samples of "near source" transitional massive sulphide within close proximity to a potential fold hinge report results of:

·     7.5 g/t Au

·     4.2 g/t Au

·   Independent check sampling of recently excavated trenches report oxide intersections of:

·     20 m at 2.3 g/t Au, including 4 m at 3.4 g/t Au and 8 m at 4.0 g/t Au from trench BHTR02

·     24 m at 1.0 g/t Au, including 4 m at 1.3 g/t Au and 4 m at 3.9 g/t Au from trench BHTR05

·   Anomalous silver and copper assays reported within the massive sulphide samples.

·   A preliminary drill programme has been prepared to assist in the generation of the maiden JORC compliant Mineral Resource Estimate for the Ferensola gold project and to test the potential strike length of the magnetic anomaly.

SRK has defined an Exploration Target for the Ferensola Project with a tonnage range of between 5 and 7 million tonnes ("Mt") at a grade range of between 4 and 8 grammes per tonne ("g/t") which equates to between 0.8 and 1.5 million ounces ("Moz") Au. The Exploration Target has been restricted to a 2 km strike length segment of a regional fold belt that has a potential overall strike length in excess of 10 km, and which has additional mineralisation potential to that included in the Exploration Target area. More specifically, the revised geological interpretation has identified numerous potential fold hinges that could represent high grade targets. These were recognised from geophysical data and are supported by existing exploration data, evidence from grab samples and recent regolith sampling.

Given the updated interpretation of the geological, analytical and geophysical data for the Ferensola Project, along with the previously reported anomalous samples outside of the current Exploration Target area, SRK considers it reasonable to assume that further exploration could increase the Exploration Target as currently defined. Based on the work undertaken, Sula has defined the initial area on which to undertake a detailed exploration drill programme. Sula is determining the best and most commercially viable route in which to complete the drill programme on the Exploration Target for the benefit of all shareholders, which may include a joint venture partnership or a Sula-led exploration programme. The Board of Sula looks forward to updating the market with further news regarding the planned drill programme in due course.

The potential quantity and grade is conceptual in nature and there has been insufficient exploration to estimate a JORC compliant Mineral Resource and it is uncertain if further exploration will result in the estimation of a JORC compliant Mineral Resource. In SRK's opinion, the historical exploration data reviewed and verified here, is sufficient in both quality and quantity for an Exploration Target as defined by the JORC Code to be defined.

Assumptions

In defining the Exploration Target, SRK used the magnetic anomaly to define a fold structure and to establish a trace length for the mineralisation which approximated to 2 km between N1017000 and N1018300 with a dip extent of 300 m. Mineralisation is assumed to comprise discontinuous sheets of massive sulphide of between 2 and 5 m in width, with nominal strike extents of between 100 m and 300 m. The most significant accumulations of mineralisation are assumed to be contained in fold-hosted shoots akin to 'saddle reefs'. In determining the range of grades and the tonnage applied to the Exploration Target, a factor of ±25% has been applied to base case estimates.

SRK notes that, in addition to the area where an Exploration Target has been defined, there remains a significant strike length of the fold structure (>10 km) which continues to be highly prospective but lacks sufficient data to warrant reporting as an Exploration Target at this stage.

The accompanying SRK presentation supporting the Exploration Target will be made available through Sula's website in the coming weeks.

Site Visit

Additional details relating to the recent site visit and work programme undertaken can be found in the following RNS, dated 25 June 2015:

http://www.sulaironandgold.com/wp-content/uploads/2015/06/Project-Update.pdf

Recent Work Programme

Mr Howard Baker, Non-executive Technical Director of Sula, and Dr Chris Bonson, Principal Consultant (Structural Geology) of SRK, completed a site visit to the Ferensola Project in June 2015. The site visit was undertaken to consolidate all work completed to date, to undertake an independent check sampling programme and to define an Exploration Target along with an associated drill programme for the Ferensola Project that is compliant with Internationally Recognised Reporting Codes for Mineral Resources and Mineral Reserves.

In total, 108 samples were collected from areas of interest across the licence area, the results of which have now been received from ALS [Minerals] laboratories ("ALS") in Ireland and form the basis of the Exploration Target generated by SRK. Table 1 sets out a summary of the samples collected during the site visit. Of the 108 samples collected, only 25 samples (23%) have returned grades below the assay detection limit.

Table 1: Breakdown of samples collected during the June site visit

Sample Type	Quantity	Samples at or below detection limit
Historic Diamond Drill Core	15	0
Sula Trenching	30	1
Artisanal Goldstones	8	0
Sulphide Stones	2	0
2014 Programme Soil Samples*	33	5
Road Cutting	12	12
1958 Historic Trench	8	7
Total	108	25   (23%)

*samples not previously submitted for assay

Historic Diamond Drill Core - Independent Inspection and Resampling

Between 2008 and 2010, Golden Leo Resources Limited drilled 34 diamond drillholes across various targets within the Ferensola licence. With the exception of drillhole SDD033, all holes were drilled at 50° towards the WNW at 287 to 290°. SDD033 was drilled at 50° to the ESE at 110°. Previously reported results from the main target include:

·   Drillhole SDD004: 8.72 m at 10.5 g/t Au and at 2.0 m at 8.8 g/t Au

·   Drillhole SDD033: 9.03 m at 6.6 g/t Au

·   Drillhole SDD016: 1.55 m at 11.7 g/t Au

Drillholes SDD016 and SDD033 fall on the same section line and are scissor holes targeting the same mineralised interval. SDD004 lies approximately 150 m to the north of SDD016 and SDD033.

SRK examined drill core from the holes listed above in addition to drill core from holes SDD020 and SDD032. The inspection was limited to a certain degree due to the general degradation of core boxes over time. Of the holes inspected, only drillhole SDD033, interval 165.8 m to 170 m appeared slightly affected by missing core. It was also reported that the historic holes were structurally orientated although no evidence for this could be found. Under the supervision of SRK, the historic diamond drillholes were sampled with quarter core being taken from the remaining half core. In total, 15 samples were submitted for analysis at ALS. Due to the high sulphide content, all samples were analysed via fire assay using a 30 g nominal sample weight with a range of 0.01 to 100 ppm (Au-AA25).

Table 2 sets out the results of the resampling programme. As shown, SDD004 returned 19.5 m at 9.2 g/t Au including 6.1 m at 14.7 g/t Au and 5 m at 17.4 g/t Au. Of note, SDD004 also returned a silver assay of 7.9 g/t and a copper assay of 0.5% from the associated 5 m at 17.4 g/t Au. Drillhole SDD033 returned 5.3 m at 3.4 g/t Au including 1.1 m at 12.3 g/t Au and SDD016 returned 4.3 m at 5.2 g/t Au including 0.5 m at 21 g/t Au.

Table 2: Assay results of resampled historic drill core (15 samples)

Drillhole	From (m)	To (m)	Apparent Thickness (m)	Au (g/t)	Ag (g/t)	Cu (%)
SDD004	80.9	82.9	2.0	0.1	0.1	0.04
SDD004	82.9	85.1	2.2	1.0	1.9	0.02
SDD004	85.1	86.3	1.2	0.5	0.2	0.02
SDD004	86.3	92.4	6.1	14.8	2.9	0.01
SDD004	92.4	94.7	2.3	0.2	0.3	0.02
SDD004	94.7	99.7	5.0	17.4	7.9	0.47
SDD004	99.7	100.4	0.7	0.3	0.9	0.02
SDD004	80.9	100.4	19.5	9.2	3.2	0.134
SDD033	162.4	164.8	2.4	*0.03	0.1	0.003
SDD033	164.8	165.8	1.0	2.7	0.1	0.004
SDD033	165.8	166.9	1.1	12.3	0.3	0.003
SDD033	166.9	170.1	3.2	0.6	0.2	0.003
SDD033	164.8	170.1	5.3	3.4	0.2	0.003
SDD016	169.0	169.8	0.8	*0.06	0.1	0.01
SDD016	169.8	171.9	2.1	4.0	0.9	0.02
SDD016	171.9	172.5	0.5	21.0	1.6	0.02
SDD016	172.5	174.1	1.7	1.6	0.3	0.02
SDD016	169.8	174.1	4.3	5.2	0.7	0.02

*interval not used in the length-weighted grade calculation

One of the major uncertainties regarding the mineralisation is the actual dip of the mineralised structure. SRK undertook a first pass analysis of the potential mineralisation orientations based on alpha angle measurements of the structures in four holes; three that were drilled to the WNW and one that was drilled to the ESE. The review suggests that the vast majority of the drilling (97%) has been inclined in an unfavourable orientation, being sub-parallel to the observed structures, and may explain the general lack of drilling success across the targets previously drilled. It is worth noting that the one drillhole (SDD033) that was orientated to the ESE was one of the three drillholes that intersected mineralisation in the Exploration Target area and that this hole appears to have been one of the last holes drilled.

Field Mineralisation Observations

Principally, mineralisation in the field is seen as clusters or arrays of fragments of quartz veins and hematite (goethite) aggregates within the duricrust. Elevated trench assay results (discussed below) can be correlated with the occurrence of such material in all of the instances that were inspected. Certain trenches intersect two or three of these intervals separated by tens of metres, potentially indicating numerous mineralised features or structural repetition. In addition, the hematite rich zones are very similar to the goldstones targeted by the artisanal miners and an inspection of samples taken from spoil heaps local to artisanal pits contain partially weathered sulphides and indicate that hematite and goethite in the goldstones is a weathering product after massive sulphide mineralisation. Moreover, fresh sulphide material has been found in the waste dumps to the artisanal pits and lodged in up-turned tree roots, at a location where goldstones were sampled. The observations made above indicate all mineralised materials (i.e. hematitic material in trenches; goldstones from artisanal workings; and, massive sulphide intervals in drillholes and grab samples) are simply variably weathered products of the same mineralising system.

Sula Trenching - Independent Inspection and Resampling

Due to a hard pervasive duricrust across the licence area, the trenches excavated were limited in depth, generally not exceeding 0.5 m. Assay results from this phase of exploration were reviewed by Howard Baker of Sula and during the recent site visit, an independent and supervised sampling programme was undertaken to verify the original results and to inspect the exposed geology. Of the five trenches sampled, three reported anomalous assay results. During the supervised reassaying programme, it was clear that the sampling methods employed were undertaken to best practise and as such, it is deemed appropriate to report an average of the two sampling programmes. Of note, trench BHTR02 reports a zone 20 m in width averaging 2.31 g/t Au and trench BHTR05 reports a zone 24 m in width averaging 1 g/t Au. Trench BHTR11 located to the south of the interpreted fold belt reports two minor zones, from 224 m to 228 m and from 264 m to 268 m, where grades of 3.28 g/t and 2.54 g/t were returned. However, it is noted that the re-assays are generally lower than the original assay and, furthermore, it is worth noting that Trenches BHTR02 and BHTR05 were excavated roughly perpendicular to the azimuth of the fold belt whereas Trench BHTR11 was excavated parallel with the identified fold hinges and is not considered the optimal orientation.

Artisanal goldstones and sulphide stone sampling and assaying

During the site visit, eight goldstone samples and two sulphide stone samples were collected for assaying. The samples were collected from a location just to the north of the "Kuwait" artisanal mining area with the samples marking the southern extent of the Exploration Target defined by SRK. Samples were taken from artisanal pit waste dumps and are considered to be near source samples. The samples are also believed to be located within close proximity to a fold hinge as interpreted from the ground magnetic data and corroborated through field evidence where isoclinal folding is preserved from one sample where the pyritic massive sulphide has developed an axial planar fabric. This sample, along with the location of collection, clearly indicates that the project occupies a high strain environment and that folding took place syn- to post sulphide mineralisation.

Table 5 sets out the assay results of the eight goldstone and two sulphide stone samples collected from this location.  The goldstone samples average 5.0 g/t Au with a minimum assay of 0.2 g/t Au and a maximum assay of 12.4 g/t Au. The two sulphide stones returned assays of 7.5 g/t Au and 4.2 g/t Au. Of note, the two sulphide stone samples returned silver assays of 6.4 g/t and 5.3 g/t respectively.

Table 5: Assay results of goldstones and sulphide stones from location 221519 X and 1017239 Y

Sample Type	X	Y	Z	Au (g/t)	Ag (g/t)	Cu (%)
Goldstone	221519	1017239	504	9.3	0.6	0.08
Goldstone	221519	1017239	504	12.4	2.5	0.04
Goldstone	221519	1017239	504	2.3	0.2	0.02
Goldstone	221519	1017239	504	0.2	0.1	0.01
Goldstone	221519	1017239	504	3.1	1.4	0.02
Goldstone	221519	1017239	504	1.3	0.5	0.02
Goldstone	221519	1017239	504	3.3	0.2	0.02
Goldstone	221519	1017239	504	8.2	1.8	0.05
Sulphide Stone	221519	1017239	504	7.5	6.4	0.01
Sulphide Stone	221519	1017239	504	4.2	5.3	0.02

Soil Sampling

Due to the extensive duricrust within the region, shallow soil sampling is not considered the most appropriate sampling technique. It is clear from the recently excavated trenches that the duricrust is pervasive with only minor occurrences of hematite-goethite "goldstones" being observed within the upper portions of the soil profile. As such, shallow soil samples within hard duricrust are unlikely to encounter significant near surface mineralisation and, accordingly, even minor, near detection limit assays could be considered significant. Previous soil sampling campaigns resulted in an assay of 54.4 g/t Au with this location now realised to possibly coincide with a fold hinge as interpreted from the magnetic anomaly data.

In 2014, Sula undertook a soil sampling programme over the Dalakuru target within the Ferensola licence. This accompanied a soil sampling programme previously completed over the Lagunda-Yanfarina area of the licence. The Dalakuru samples collected in 2014 have been stored in Freetown and, upon realisation of the potential extent of the mineralised unit at Ferensola, a selection of 33 samples were submitted for assay. Of the 33 soil samples assayed, only five samples (15%) were below detection limit (0.005 g/t Au). Notably, a sample taken coincident with a potential fold hinge reported an assay of 5.7 g/t Au.

Future Exploration

As part of the future exploration, it has been recommended that holes should be planned to be drilled at -50°/130° in the first instance and that all holes should be orientated so that detailed structural data can be collected. Two drillholes should attempt to verify the existing intersections in holes SDD004, SDD016 and SDD033 and step out holes should be completed from these locations once the structural data has been evaluated. The potential for fold-controlled "saddle reef" style shoots should be tested under the location of the folded grab samples.

Nick Warrell, CEO, commented:

"This is a highly exciting stage in our gold exploration programme and another critical milestone in Sula's corporate history. The high grade assay results received following the visit to our Ferensola Project by Mr Howard Baker, Sula's Non-executive Technical Director and Dr Chris Bonson of SRK is highly encouraging. Their subsequent identification of drill targets over a 2 km strike length, with the minimum Exploration Target of between 0.8 Moz Au and 1.5 Moz Au, is enormously significant because the strike length of the mineralised zone is potentially in excess of 10 km containing areas of significant gold mineralisation. We look forward to updating the market with further news regarding the planned drill programme in due course."

**ENDS**

For further information please contact:

Sula Iron & Gold plc
Nick Warrell / Matt Wood	[phone]
Strand Hanson Limited (Financial and Nominated Adviser)
Simon Raggett / James Harris / James Dance	[phone]
VSA Capital Limited (Broker)
Andrew Raca / Richard Buckle	[phone]
Yellow Jersey PR (Financial PR)
Dominic Barretto / Kelsey Traynor	[phone]

Notes:

Sula Iron & Gold plc is a multi-commodity exploration company focused in 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 coltan, gold and iron ore. In December 2014, the Company achieved a corporate milestone in delivering its JORC MRE for the BIF 1 iron ore project in which total resource of 514.5Mt @ 31.8% Fe was identified and total oxide resource of 55.5Mt @ 45.26% Fe.

The information in the SRK presentation to which this statement is attached and that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr Chris Bonson (Principal Consultant, Structural Geology) of SRK, a Competent Person who is a Chartered Geologist (Geological Society, London), Professional Geologist with the Institute of Geologists of Ireland and a European Geologist (EurGeol #745) through the European Federation of Geosciences, all being Recognised Professional Organisations (RPOs) accepted by the Australian Securities Exchange pertaining to the reporting of Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves.

In addition, the information in this release that relates to Exploration Results has been reviewed by Mr Howard Baker, Non-Executive Technical Director of Sula Iron and Gold plc. Mr Baker is a Chartered Professional Fellow of the Australasian Institute of Mining and Metallurgy (#224239) and a Competent Person as defined in the Australasian Code for reporting of exploration results and Mineral Resources and Ore Reserves.

Chris Bonson and Howard Baker have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as Competent Persons as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration targets, Exploration Results, Mineral Resources and Ore Reserves'. Chris Bonson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

 

END

 

 

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