Gold Update at Iron and Gold Licence in Sierra ...

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

11 February 2013

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

             Gold Update at Iron and Gold Licence in Sierra Leone              

Sula Iron & Gold plc, an iron ore and gold exploration company focussed on
Sierra Leone, is pleased to announce that five target areas for hard rock gold
mineralisation have now been confirmed for follow-up exploration at Sula's
wholly owned 153 sq km Blue Horizon iron ore and gold exploration licence (`the
Licence') in Sierra Leone.

Highlights

  * Five target areas for hard rock gold mineralisation have been identified
    that appear to host source areas of placer gold
   
      + The Dalakuru and Lagunda prospects are high priority targets where
        further exploration including detailed ground magnetic surveys is
        planned
       
      + Defined exploration area of approximately 8 sq km identified for placer
        gold source at Lagunda prospect where extensive artisanal mining occurs
       
  * Areas prospective for gold in the licence are located in the highly
    prospective Sula-Kangari greenstone belt rocks (hosts Amara Mining Plc's
    2.91Moz Au Baomahun deposit)
   
  * Structures within the Licence display a strong northeast-southwest trend -
    typical of the gold-mineralised greenstone trend throughout West Africa
   
  * Historic drilling intercepted hard rock mineralisation that is open in all
    directions at the Dalakuru prospect. Historic diamond drilling intercepted:
   
      + 2.00m @ 8.76g/t gold (83.14 to 85.10m, SDD004)
       
      + 8.72m @ 10.46g/t gold (89.40 to 98.10m, SDD004)
       
      + 1.55m @ 11.68g/t gold (171.00 to 173.00m, SDD016)
       
      + 9.03m @ 6.63g/t gold (161.37 to 170.00m, SDD033)
       
  * Additional gold targets identified and remain to be explored
   
Sula's Non-Executive Technical Director Chris Wilson, said, "We are delighted
that reconnaissance work has identified five highly prospective exploration
targets that appear to host the source areas of placer gold within the Licence
area. The potential presence of these gold sources confirms our belief that the
Licence is highly prospective for gold. This marks another step in our efforts
to establish a leading dual-commodity iron ore and gold exploration company.
With defined exploration programmes in place to prove up the gold potential,
and work on-going on our iron ore prospects, we are confident that our Licence
offers investors significant upside potential."

Further Information

Exploration Alliance S.A. conducted a reconnaissance review of the gold
potential of Sula's wholly owned Blue Horizon exploration licence in Sierra
Leone. This included the compilation of existing data into a Geographic
Information System ('GIS') database allowing geospatial analysis of historic
drill intercepts, structural interpretation of publicly available regional
magnetic data, and interpretation of high resolution satellite imagery. This
work has provided Sula with a better understanding of the local geology and the
distribution and potential controls on gold mineralisation.

In January 2013, Sula acquired licence-wide GeoEye-1 satellite data with a
resolution of 50cm per pixel. The imagery generated provides detailed
information on the extent of artisanal placer gold workings which have occurred
within the Sula licence area for over 60 years, and indicates the source of
some of the placer gold within the Licence.

Five target areas for hard rock gold mineralisation have been identified based
on the location of historic drill intercepts, potential source areas for
alluvial gold deposits, and position of major structures as defined by airborne
magnetic data and drainage orientation. Of these, the Dalakuru and Lagunda
prospects are high priority targets.

Areas prospective for gold in the licence are located in the highly prospective
Sula-Kangari greenstone belt rocks, which trend northeast through the licence.
The Sula-Kangari belt hosts Amara Mining Plc's (previously Cluff Gold) 2.91Moz
Baomahun deposit in Sierra Leone and greenstone belts in general host all major
gold deposits in West Africa, which are commonly recognised at surface by
extensive artisanal workings.

Structure is known to exert a fundamental control on greenstone-type
mineralisation and all major deposits worldwide are associated with regional
scale faults. Major structures within the Licence display a strong
northeast-southwest trend, which is typical of the gold-mineralised greenstone
trend throughout West Africa. The bounding structures to the Sula-Kangari
greenstone belt pass through the Sula Licence, and smaller scale, sub-parallel
northeast-southwest trending structures and contact zones are also common.
Northeast trending lineaments are locally cross-cut and offset by small
northwest-southeast and east-west trending faults.

Sula consider the association of placer gold workings and major lineaments
within greenstone belt rocks at the Licence to be highly significant.
Furthermore, historic drilling in the Licence has discovered hard rock
mineralisation which is open in all directions at the Dalakuru prospect, and
also identified additional gold targets that remain to be explored.

Dalakuru is the most advanced prospect within the Licence, and historic diamond
drilling intercepted 2.00m @ 8.76g/t gold (83.14 to 85.10m, SDD004), 8.72m @
10.46g/t gold (89.40 to 98.10m, SDD004), 1.55m @ 11.68g/t gold (171.00 to
173.00m, SDD016) and 9.03m @ 6.63g/t gold (161.37 to 170.00m, SDD033).
Mineralisation is hosted in massive pyrite and pyrite cemented breccia with
quartz fragments and is open in all directions.

Dalakuru is located on a major northeast-southwest trending structure that
juxtaposes a strong magnetic high against a strong magnetic low. This
difference in magnetic response indicates that different lithologies occur
either side of the fault and the resultant competency contrasts are considered
important in focusing mineralising fluids. The Dalakuru structure is at least
5km long but extensive development of laterite masks bedrock geology along its
length. Sula is planning a detailed ground magnetic survey to better constrain
the location of the fault zone, which will then be followed by a soil and
channel sampling programme to assist with drill targeting along strike.
Step-out and step-back drilling of mineralisation intercepted in historic drill
holes is a priority.

Lagunda is defined by extensive artisanal alluvial gold workings which outline
a northeast-southwest trending target that is approximately 6km long and 2km
wide. The northwest boundary of the prospect is defined by a regional
northeast-southwest trending structure that juxtaposes a strongly magnetic unit
against a weakly magnetic unit. The Lagunda target area displays a mottled
mid-range magnetic response which defines multiple northeast-southwest trending
structures and contact zones. The potential presence of multiple structures and
contact zones, juxtaposing different lithologies, coincident with the source
area of the Lagunda alluvials is considered highly significant. Regional
magnetic data suggests that Lagunda is a dilational zone, where multiple faults
and contact zones provide excellent structural preparation, and competency
contrasts between lithological units could serve to focus fluids.

Sula considers Lagunda a high priority target. A detailed ground magnetic
survey is planned, in conjunction with reconnaissance soil sampling, in order
to better define the structural architecture and location of most prospective
targets.

The other prospect areas, known as Simbako, Simbako East and Northeast are
located on regional, northeast trending lineaments which define the contact
between magnetic highs and magnetic lows. Localised alluvial workings are
associated with each prospect indicating the potential for hard rock gold
mineralisation. These prospects are not covered by regional magnetic data and
the structural architecture of the projects is unknown. Further work comprising
acquisition of ground magnetic data and reconnaissance geochemical sampling
will be conducted following completion of the Dalakuru and Lagunda work
programmes.

The information in this announcement has been reviewed by Dr Chris 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:

Gavin Burnell               Sula Iron & Gold plc           [phone]                
                                                                               
James Caithie / Avi         Cairn Financial Advisers LLP   [phone]
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John-Henry Wicks / Alice    Northland Capital Partners     [phone]
Lane                        Limited                                            
                                                                               
Chris Rourke / Guy Wheatley Beaufort International         [phone]
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Felicity Edwards/ Charlotte St Brides Media and Finance    [phone]
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Notes

Sula Iron & Gold plc is an iron ore and gold exploration company focussed on
West Africa. The Company's main objective is to explore and advance its key
Exploration Licence EL54/2011, in Northern Sierra Leone, which boasts a dual
commodity focus and is highly prospective for iron and gold. The 153 sq km
licence area is contiguous to African Minerals' operational Tonkolili iron
mine, which has a JORC compliant resource of 12.8 billion tonnes.

Exploration work at the Project has confirmed the presence of banded iron
formation (`BIF') at surface over a strike length of 3.1km and drill-ready. The
BIF extends NE from the Tonkolili mine into Sula's licence area. An exploration
target of 500 million tonnes at 30.4% iron for magnetite and 55% iron for
hematite has been given by independent mining consultants SRK Exploration
Services Ltd.

Significant greenstone-style gold mineralisation has also been identified at
various prospects within the licence area. Greenstone-style deposits are
typically located on or proximal to regional scale, deep seated faults and
lineaments. 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.

The Company has a strong board and management team with in depth knowledge of
Sierra Leone and a proven track record in developing African resource projects.