Subscriptions to raise £210,000 gross

RNS Number : 6170R

Sula Iron & Gold PLC

10 March 2016

 

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

10 March 2016

Sula Iron & Gold plc

("Sula" or the "Company")

Subscriptions to raise £210,000 gross and

Directors' Dealings

Sula (AIM: Sula), a multi-commodity exploration company focused on Sierra Leone, announces that it has conditionally raised £190,000 (before expenses) from Jub Capital Limited ("Jub Capital"), by way of a conditional subscription by Jub Capital for 118,750,000 new ordinary shares (the "Subscription Shares") of 0.1p each in the capital of the Company ("Ordinary Shares") at a price of 0.16p per Subscription Share (the "Subscription Price"), (the "Subscription"). Jub Capital is an existing institutional investor and was a cornerstone investor in the Company's fundraising in October 2015.

In addition to the Subscription Shares, 65,312,500 warrants will also be granted to, inter alia, Jub Capital for the right to subscribe for one further new Ordinary Share at a price of 0.16p per share during an exercise period commencing on the date of issue of the warrants and ending eighteen months after admission to trading on AIM ("Admission") of the Subscription Shares (the "Warrants"). The Warrants will not be issued until after the annual general meeting of the Company scheduled to be held on 30 March 2016, subject to the share capital authorities to be sought thereat, as set out in the formal notice of annual general meeting dated 7 March 2016, being approved by the Company's shareholders.

In addition, further to its announcement of 24 February 2016, the Company has conditionally raised an additional £20,000 gross by way of subscriptions by certain of its Directors and a director of the Company's subsidiary, for a further 12,500,000 new Ordinary Shares (the "Director Subscription Shares") at the Subscription Price (the "Director Subscriptions").   No warrants will be issued in connection with the Director Subscriptions.

Pursuant to the Director Subscriptions, Nicholas Warrell and Howard Baker, being directors of the Company, have undertaken to subscribe £10,000 and £5,000 respectively for 6,250,000 and 3,125,000 new Ordinary Shares respectively at the Subscription Price.  Each Director's participation in the Director Subscriptions is considered to be a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies.  Accordingly, the independent director of Sula (being Matthew Wood) considers, having consulted with the Company's nominated adviser, Strand Hanson Limited, that the terms of each Director's participation in the Director Subscriptions is fair and reasonable insofar as Shareholders are concerned.

Following Admission of the Director Subscription Shares and the Subscription Shares, each of the aforementioned directors' interests in the ordinary share capital of the Company will be as follows:

Director	Current holding of Existing Ordinary Shares	Subscription Shares	Holding of Ordinary Shares on Admission	% of Enlarged Share Capital on Admission
Nicholas Warrell	49,813,010	6,250,000	56,063,010	6.21%
Howard Baker	3,666,666	3,125,000	6,791,666	0.75%

In addition, Des Congdon, a director of the Company's subsidiary, Blue Horizon (SL) Limited, has undertaken to subscribe for 3,125,000 new Ordinary Shares. Mr Congdon is currently interested in 2,499,999 Ordinary Shares and following Admission will be interested in 5,624,999 Ordinary Shares representing approximately 0.62 per cent. of the Enlarged Share Capital. Mr Congdon's participation in the Director Subscriptions also constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies. Accordingly, the independent director of Sula (being Matthew Wood) also considers, having consulted with the Company's nominated adviser, Strand Hanson Limited, that the terms of Mr Congdon's participation in the Director Subscriptions is fair and reasonable insofar as Shareholders are concerned.

The net proceeds of the Subscription and the Director Subscriptions will be used to advance the Company's Ferensola Gold Project in northern Sierra Leone through a further drilling programme, which the Directors believe will enhance value for all shareholders.

Details of the Subscriptions

On completion of the Subscription and the Director Subscriptions, the Company will have 902,681,924 Ordinary Shares in issue (the "Enlarged Share Capital").  The Subscription Shares and the Director Subscription Shares will, when issued, rank pari passu in all respects with the existing Ordinary Shares. The Subscription Shares will represent approximately 13.16 per cent. of the Enlarged Share Capital. Completion of the Subscription is conditional on Admission of the Subscription Shares. The Directors' Subscription Shares will represent approximately 1.38 per cent. of the Enlarged Share Capital. Completion of each of the Director Subscriptions is conditional on Admission of the relevant Director Subscription Shares. The closing mid-market price of the Company's Ordinary Shares on 9 March 2016 (being the latest practicable business day prior to the date of this announcement) was 0.195p per Ordinary Share. 

Application will be made to the London Stock Exchange plc for Admission of the Subscription Shares and the Director's Subscription Shares and it is expected that Admission will become effective and that dealings in the Subscription Shares and the Directors Subscription Shares will commence at 8.00 a.m. on 16 March 2016.

Following the issue and allotment of the Subscription Shares and the Director Subscription Shares, the Company's enlarged issued ordinary share capital will comprise 902,681,924 Ordinary Shares. The Company does not hold any Ordinary Shares in treasury. This figure of 902,681,924 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

Nick Warrell, Chief Executive Officer of Sula, said:

"We are delighted to have raised these additional funds and with the continued interest from investors in our exciting gold project at Ferensola. The funds will be used for a drill programme following the completion of the geophysical survey currently being commissioned. The combined Gamma-Ray Spectrometry and Resistivity and Induced Polarisation survey is expected to commence in early April 2016 and will initially focus on the licence area drilled in November 2015 before expanding out beyond the Exploration Target area defined by SRK Consulting (UK) Ltd. This will allow the geophysical signal to be calibrated over the area of known mineralisation which will assist greatly in the precise planning of additional drill targets through similarities observed in the geophysical signal received in other areas of the licence."

**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] VSA Capital Limited (Broker) Andrew Raca / James Deathe [phone] Yellow Jersey PR (Financial PR) Dominic Barretto / Harriet Jackson [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 a total resource of 514.5Mt @ 31.8% Fe was identified and total oxide resource of 55.5Mt @ 45.26% Fe.

 

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