Exploration Update

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

18 January 2013

                Sula Iron & Gold plc (`Sula' or `the Company')                 

        Exploration Update - Iron and Gold Licence Area in Sierra Leone        

Sula Iron & Gold plc, an iron ore and gold exploration company focussed on
Sierra Leone, is pleased to announce an exploration update at its 153 sq km
iron ore and gold licence area (`the Project') in Sierra Leone, which is
contiguous to African Minerals' operational Tonkolili iron mine which hosts a
12.8 billion tonne resource.

Overview:

Iron

  * Completed detailed mapping and reconnaissance work at the Project -
    presence of banded iron formation (`BIF') confirmed at surface over a
    strike length of 3.1km and drill-ready
   
  * BIF presence located at Area 1 in the south-west of the licence area -
    orebody extends NE from Tonkolili's 12.8 billion tonne mine
   
  * 2,000 metre diamond drilling programme planned to commence before the end
    of Q1 2013 to test the strike continuity, thickness and iron grade of BIF -
    a rig contract will be signed shortly
   
  * Exploration target of 500Mt at 30.4% iron for magnetite and 55% iron for
    haematite, given by independent mining consultants SRK
   
Gold

  * Significant greenstone-style gold mineralisation at the Dalakuru and
    Lagunda prospects identified following field work, re-logging of historic
    drill core and data review
   
  * Diamond drilling by previous operators at Dalakuru intercepted significant
    quartz-sulphide breccias in three holes:
   
  * 8.72 m @ 10.46 g/t gold (89.40 to 98.10 m, SDD004);
   
  * 1.55 m @ 11.68 g/t gold (171.00 to 173.00 m, SDD016) and
   
  * 9.03 m @ 6.63 g/t gold (161.37 to 170 m, SDD033)
   
  * Mineralisation at Dalakuru remains open in all directions
   
  * Further work including a ground magnetic survey and follow-up geochemical
    sampling planned to ascertain economic potential of both target areas
   
Sula's Chief Executive Nick Warrell said: "Detailed mapping and reconnaissance
work at our flagship iron and gold project in Sierra Leone has returned highly
positive results, which confirm outcropping banded iron formation over a 3.1km
strike, and advances the project to a drill ready status. From here we plan to
implement a 2,000 metre drilling programme and are due to sign a drill contract
shortly to commence work. The drilling work will further test the strike
continuity, thickness and DSO grade potential of the Project and it is our
intention to delineate a JORC compliant resource in terms of the iron at the
Project in 2013. In addition, we are highly excited by the gold prospectivity
of the Dalakuru and Lagunda target areas having analysed past drilling data
where results returned best intersections of 8.72m @ 10.46 g/t gold. We look
forward to commencing further work over these two target areas including a
ground magnetic survey and follow-up geochemical sampling and will report on
these developments in due course."

Further Information

The Project is located in the northern part of the Sula-Kangari greenstone belt
in Sierra Leone, and is contiguous to African Minerals' operational Tonkolili
iron mine which hosts a 12.8 billion tonne resource. The Sula-Kangari
greenstone belt is also host to AIM quoted Amara Mining's (previously named
Cluff Gold Plc) 2.91 Moz Baomahun greenstone-style gold deposit, and the
Project is considered prospective for similar styles of iron and gold
mineralisation to Tonkolili and Baomahun respectively.

Iron Exploration

Area 1 is a priority iron target, located in the south-western part of the
Project area and directly along strike from an undrilled magnetic high within
the Tonkolili licence. The target comprises a 2.7 km long, northeast trending,
linear magnetic high. Recent detailed mapping and reconnaissance work has been
undertaken by the Company at Area 1 and has defined BIF outcrop and Banded Iron
Formation (`BIF') fragments in duricrust over a strike length of 3.1 km
coincident with this magnetic high.

A 2,000 metre diamond drill programme has now been designed to test the strike
continuity, thickness and iron grade of BIF at Area 1, with the ultimate aim of
testing the potential for an iron deposit in excess of 0.5 Bt. The drilling
programme will comprise eight drill collars spaced 320 metres apart over a
strike length of 2.2 km. Each hole will be drilled at an azimuth of 140Ëš and a
dip of 50Ëš, to a downhole depth of 250 metres.

Following this first phase of diamond drilling, shallow vertical holes are
required to test the potential for direct shipping ore (DSO) +60% grade iron
mineralisation.

Initial field mapping has indicated that BIF outcrops are variably oxidised to
higher grade haematite mineralisation. Such supergene processes are responsible
for the formation of the higher grade DSO ores. The Company look forward to
reporting on its iron focussed drilling programme over Area 1 in due course.

Gold Exploration

Artisanal miners have exploited placer gold within the Project area for more
than 60 years, and active workings are observed in at least five separate
areas. Gold mineralisation observed at the Project is associated with
quartz-sulphide, greenstone-style veins, lenses and breccias. This style of
mineralisation is very common in West African greenstone belts and is
recognised elsewhere in greenstone belts of Sierra Leone. Greenstone-style
deposits are typically located on or proximal to regional scale, deep seated
faults and lineaments. Mineralisation occurs in shoots and lenses on second and
third order structures at low angles to the main structure, and is associated
with quartz sulphide mineralisation and disseminated to massive sulphide.

Following reconnaissance work completed in December 2012, which included field
work, re-logging of historic drill core and data review, the Dalakuru and
Lagunda target areas are considered the most prospective for hard rock gold
mineralisation.

Additionally, previous operators on the Project completed 3,406 metres of RAB
drilling and 5,392 metres of diamond drilling at three prospects considered
prospective for gold. Nineteen diamond drill holes totalling 3,402 metres were
completed at Dalakuru and intercepted significant quartz-sulphide breccias in
three holes:

  * 8.72 m @ 10.46 g/t gold (89.40 to 98.10 m, SDD004);
   
  * 1.55 m @ 11.68 g/t gold (171.00 to 173.00 m, SDD016); and
   
  * 9.03 m @ 6.63 g/t gold (161.37 to 170 m, SDD033)
   
Mineralisation at the Dalakuru target area comprises steeply dipping
quartz-sulphide breccias hosted in amphibolite. As there is no outcrop, and no
more than one hole intercepted each mineralised structure, the dip and strike
direction of the structure is not known.

Historic drilling at Dalakuru did not adequately test the mineralised system.
Therefore, despite the historic drilling at the Project gold mineralisation is
open in all directions, and further work to include re-logging and sampling of
drill core and ground magnetic surveys are required to explore the size
potential and morphology of Dalakuru.

The Lagunda prospect comprises a large, active, artisanal alluvial gold field
striking northeast over at least 2 km. The alluvial gold field is coincident
with and parallel to the contact between a magnetic high and magnetic low
identified from regional airborne magnetic data. This magnetic signature is
considered significant as it potentially represents a fault zone or
lithological contact, which act as conduits for hydrothermal fluids and are
excellent traps for gold mineralisation in greenstone-style environments.

Lagunda is considered an attractive exploration target for greenstone-style
mineralisation and further work including a ground magnetic survey and
follow-up geochemical sampling is planned.

The information in this announcement has been reviewed by Dr Christopher
Wilson, Technical Director of Sula, a Chartered Professional Geologist with 24
years' experience, a Qualified Person (NI43-101 and JORC), Fellow of the
Australian Institute of Mining and Metallurgy and a Fellow of the Society of
Economic Geologists.

                                   **ENDS**                                    

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

Brian Moritz                Sula Iron & Gold plc           + 44 (0) 7976 994300
                                                                               
James Caithie / Avi         Cairn Financial Advisers LLP   [phone]
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John-Henry Wickes / Alice   Northland Capital Partners     [phone]
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