Corporate Update

RNS Number : 6066C

Sula Iron & Gold PLC

19 October 2015

 

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

19 October 2015

Sula Iron & Gold plc

("Sula" or the "Company")

Corporate Update

New Drilling Contract & Coltan Project IFC Loan Application

Sula Iron & Gold plc, a multi-commodity exploration company focused on Sierra Leone, is pleased to announce the following corporate update.

Highlights:

·   Successful £500,000 gross fundraising concluded to carry out an extended drill programme on the Company's Ferensola Gold Project;

·     New drilling contract entered into with Energold Drilling Corp to carry out an extended drill programme commencing in November 2015;

·   Ferensola Gold Project drill programme now comprises a total of 1,500 metres - sufficient level to subsequently seek to formally engage with a potentially interested Tier 1 international gold company; and

·     Coltan Project IFC loan application to enable the Company to potentially monetise a small scale operating coltan and gold mine project without significant dilution for shareholders.

Commenting today, Sula's CEO, Nick Warrell, said:

Since reporting our interim results in June, the Company has continued to make good progress with its Ferensola Project. The extended drilling programme is an important factor in enabling Sula to potentially attract a Tier 1 gold producer. Further to the recent placing, the Company now has the necessary funds in place to complete this programme.

We also await the outcome of a loan application from the IFC for our Coltan Project. While it is not certain that the IFC will, at this stage, approve our proposal and work remains to be completed to establish that we have a viable coltan and gold deposit, the prospect of a successful outcome is exciting as it would boost local employment and enable Sula to monetise a small scale coltan and gold mine without major shareholder dilution. 

I am delighted with all the recent developments and the very real prospect of attracting a major industry player to partner with Sula. I look forward to updating the market with further news in due course."

New Drilling Contract

Further to the announcement of 14 October 2015, in which the Company announced that it had successfully raised £500,000 (before expenses) to carry out an extended drill programme on its Ferensola Gold Project, Sula is pleased to announce that, on 16 October 2015, a drilling contract was entered into with Energold Drilling Corp (EGD: TSX-V) ("Energold"). Energold is a leading global specialty drilling company that services the mining and energy sectors in the Americas, Africa and Asia and operates over 230 rigs in 22 countries worldwide. Energold is scheduled to mobilise two drilling rigs on 1 November 2015 to the Company's Ferensola licence area in Sierra Leone.

A comprehensive drill programme will therefore commence in November 2015 and be overseen on-site by both SRK Consulting and Howard Baker, the Company's Technical NED, to ensure that the most optimal technical structural data is derived from the drilling programme. Further to the recent fundraising, the drill programme will now comprise a total of 1,500 metres which the directors believe should be sufficient to subsequently formally engage with a potentially interested Tier 1 international gold company.

Coltan Project IFC Loan Application

In April 2015, Nick Warrell, Chief Executive Officer of Sula, and Des Congdon, Sula's Operations and Country Director, visited the offices of the International Finance Corporation ("IFC") in Freetown, Sierra Leone. The IFC is a member of the World Bank Group ("WBG") and the Company understands that the WBG has mobilised approximately US$1 billion in financing for the countries most affected by the Ebola crisis. This is expected to include approximately US$450 million from the IFC to enable trade, investment and employment in Guinea, Liberia and Sierra Leone.

Following the Company's meeting with the IFC, Blue Horizon submitted an investment proposal for the potential establishment of a small scale operating mine to produce and process coltan and gold (the "Investment Proposal") to the IFC's Senior Country Officer.

The Investment Proposal contains certain capital and operational expense projections, in respect of a potential small scale operating coltan and gold mine, which total approximately US$6 million, for which Blue Horizon has requested a loan from IFC. The request has now been passed to its Audit Committee in Ghana (the "Audit Committee") which will make the final decision as to whether to pursue the proposal and, if the Investment Proposal is accepted by the Audit Committee, it will then be passed to IFC's offices in New York for final ratification. 

The US$6 million figure set out in the Investment Proposal has been derived using information that the Company currently has on its coltan project. It is not yet known if the Company has a mineable coltan resource and this will not be established until Sula has completed its internal financial and technical modelling with all the relevant sensitivities which is currently expected to be completed by the end of this year. If Sula's coltan resource is viable, the board believes that the potential loan from the IFC would enable the Company to monetise the project without significant dilution for shareholders.

It should be noted that, whilst the Board and the Senior Country Officer in Freetown, are confident that Blue Horizon's Investment Proposal meets the IFC's investment criteria, the IFC has not yet ratified the Company's application and there can be no guarantee that it will so do, nor as to when any loan, if granted, would be made available or the commercial terms of such a facility.

**ENDS**

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

Sula Iron & Gold plc Nick Warrell / Matt Wood / Howard Baker [phone] Strand Hanson Limited (Financial and Nominated Adviser) James Harris / Matthew Chandler / James Dance [phone] JVSA Capital Limited (Joint Broker) Andrew Raca / Richard Buckle [phone] Daniel Stewart & Company Plc (Joint Broker) Martin Lampshire / David Coffman [phone] Yellow Jersey PR (Financial PR) Dominic Barretto / Harriet Jackson [phone] [phone]

Notes:

Sula Iron & Gold plc is a multi-commodity exploration company focused 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, gold and coltan. 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 including a total oxide resource of 55.5Mt @ 45.26% Fe.

 

END

 

 

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