Quarterly Activity Report

RNS Number : 0605L

Sula Iron & Gold PLC

23 April 2015

 

23 April 2015

Sula Iron & Gold plc

("Sula" or the "Company")

Quarterly Activity Report

Issue 2

Updated technical valuation of Ferensola by SRK ES in February

Completion of 5 trenches in gold exploration programme each >300m long

Ongoing discussions with strategic partners

Sula Iron & Gold plc, the exploration and development company focused on iron ore, gold and coltan in Sierra Leone, is pleased to provide shareholders with the Company's second Quarterly Activity Report, which it anticipates will be issued to the market every three months. These Quarterly Activity Reports allow the Company to update its shareholders on its important non-regulatory activities over the previous quarter.

To view a full version of this announcement, including figures and maps, please visit the Company's website at: www.sulaironandgold.com

Exploration

SRK Valuation Update

On 3^rd February 2015 the Company released to the market an updated valuation report by SRK Exploration Services ("SRK ES").  SRK ES combined several valuation methods to arrive at a Technical Value for the property, the Technical Value being a value that SRK ES considers to be a fair and reasonable value for the property, based upon the geological information available and their view on the status of the assets and their probability of success.

SRK ES considers that the work conducted by the Company over the past year has increased the Technical Value to US$ 56 Million (from US$ 36.7 million a year earlier), and the maximum Potential Value of the property to US$ 210 Million. This does not address the market sentiment of such investments and as such a potential investor's valuation may differ greatly from the technical valuation as the result of their view of the current or future status of the mining industry, commodity prices, both now and future, and the Company's financial position.  Back in February, Nick Warrell, Sula's CEO commented at the time:

"I am delighted with both the Technical and Potential values that SRK ES has given to Sula's assets at our Ferensola Project. We have demonstrably unlocked and enhanced shareholder value during 2014 and are determined to replicate that during 2015"

Iron Ore Exploration

As reported in the previous quarterly report, Sula was pleased to update the market with a maiden iron resource estimate at its Ferensola Project.

Total estimated resource of 514.5Mt @ 31.8% Fe

Incl. a total oxide resource of 55.5Mt @ 45.4% Fe

Gold Exploration - Magnetic Survey

In December 2014, a ground magnetic survey was completed over the central portion of the licence and results have been merged with the two previous ground surveys.  These new results have greatly assisted the company in planning the current gold exploration programme and will further assist in any future iron ore exploration over the BIF-2 target area.

The three surveys combined have resulted in the identification of new structures and areas of potential magnetite depletion, often indicative of alteration, and are being followed up via a programme of trenching.

Gold Exploration - Trenching Programme

A total of 5 long trenches have been completed at Ferensola.

Following interpretation of the recently completed ground magnetics and earlier geochemical surveys a number of target areas were identified.  A series of long, +300m, trenches have been excavated across these areas and sampling and logging is currently in progress.  Dependent on results follow up exploration may include IP geophysics and diamond drilling.

The exploration team employ standard operating procedures for the sampling of the trenches which initially is on a 4m spacing.  Samples will be analysed for gold as well as trace elements to assist in understanding the mineralisation style, distribution and any alteration patterns.

Gold mineralisation at Darakuru is thought to be of the Homestake style or BIF hosted gold.  Normally the deposits are hosted by volcanic or volcaniclastic rocks in greenstone belts metamorphosed from greenschist through to moderate amphibolite grade.  Rocks are typically oxide or carbonate iron formations with mineralisation at the often unconformable contact between volcanic and sedimentary packages.

These deposits are characterised by strata bound massive to disseminated sulphide bodies or lenses and discordant quartz veins in tightly folded iron formations, mineralisation is very often found in the nose of these isoclinal folds.

Coltan Exploration

Coltan is a local or colloquial term and is an abbreviation used in parts of Africa for a columbite-tantalite mineral; it is a dull black metallic ore from which the elements niobium and tantalum are extracted.

Further to the 16 January 2015 news release, the Company is continuing with the exploration programme which was designed by SRK ES.  To date 4 batches of samples have been submitted with results from the first, as detailed in January's release, received, which confirmed the presence of alluvial tantalum mineralisation.

Due to the nature of pan concentrate sampling, the results are indicative only and do not provide values for in-situ grade.  Further results are expected and will be reported on once received and interpreted.

Sula's CSR Programme

Sula has always operated a CSR programme within its working area and its latest project is the Kania School.  This is a new build school programme sponsored by Blue Horizon (SL) Ltd, Sula's wholly owned operating subsidiary in Sierra Leone, and is now 70 per cent. complete.  Furthermore, a new four mile road has been constructed between the villages of Wasima and Morberyia in the Samaya Bendugu Chiefdom.  It is expected that this new road will initiate trade and assist in the development of this area, as well as facilitate the evacuation of the infirm of these two settlements for medical care and treatment.  For further information on Sula's CSR activities, please visit our website at www.sulaironandgold.com.

Continuation of strategic discussions

Discussions between Sula, its advisers and potential strategic partners, as referred to in the last quarterly activity report, are progressing. There can be no guarantee at this stage that any of the current discussions will lead to a formal agreement with the Company, however the Board will keep the market updated at the earliest opportunity.

Termination of Darwin EFF

The Company also today announces that the Company and Darwin Strategic Ltd have mutually agreed to the early expiration of the £2.0 million Equity Financing Facility ("EFF") agreement as announced on 13 August 2014. The Company confirms that it did not draw down any funds under the EFF.

Commenting on the latest Quarterly Activity Report, Nick Warrell, CEO of Sula, said:

"The last few months have seen the Company progress both its exploration activities and its discussions with potential strategic partners.  We are very proud of our ongoing CSR activities and anticipate that the new school project will be completed shortly.  We remain on track to generate drill targets on our gold project and advance our tantalum (coltan) project to the point where bulk sampling for metallurgical testing can commence with the identified off taker which, if positive, will allow future bulk samples/trial mining to commence. We look forward to updating the market on strategic news in due course."

To view a full version of this announcement, including maps and photos, please visit the Company's website at: www.sulaironandgold.com.

Sula Iron & Gold plc Nick Warrell / Matt Wood		[phone]
Cairn Financial Advisers LLP (Nominated Adviser) James Caithie / Avi Robinson		[phone]
VSA Capital Limited (Broker) Bhavesh Patel / Richard Buckle		[phone]
Strand Hanson (Financial Adviser) Simon Raggett / James Harris		[phone]
Yellow Jersey PR (Financial PR) Dominic Barretto / Kelsey Traynor		[phone]

Notes

The geological information in this release has been reviewed by Mr Andrew Dacey, Non-Executive Technical Director of Sula Iron & Gold plc. Mr Dacey is a Fellow of the Institute of Materials Minerals and Mining, a Registered Professional Geologist with the Australian Institute of Geoscientists and a Competent Person as defined in the Australasian Code for Reporting of exploration results and Mineral Resources and Ore Reserves.

 

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