Sula Iron & Gold PLC Ferensola Gold Project Update (8070V)

TIDMSULA

RNS Number : 8070V

Sula Iron & Gold PLC

02 February 2017

2 February 2017

Sula Iron & Gold plc

("Sula" or the "Company")

Ferensola Gold Project

Operational Update & Grab Sample Assay Results

Sula (AIM: SULA), the multi-commodity exploration company focused on Sierra Leone, is pleased to announce the following operational update and grab sample assay results for the Ferensola Gold Project.

Highlights:

   --    Two drill rigs en route to Sierra Leone from South Africa; 

-- Oxide ore collected from the Eastern Target of the Ferensola Gold Project returns a grade of 4.8g/t Au and the artisanal dump samples from an adjacent river returned grades of up to 11.2g/t Au; and

-- Significant preparatory work completed at the Dalakuru exploration camp ("Dalakuru") ahead of the planned drilling progamme.

Operational Update

Rig Mobilisation

As announced at the time of entering into the drilling contract with Equity Drilling Ltd ("EQD") on 5 December 2016, two drill rigs and associated support equipment (the "Drill Rigs"), were being mobilised from South Africa for deployment at the project site Sierra Leone. The Drill Rigs left South Africa in December and whilst originally anticipated to arrive in country in January 2017, the ship carrying the Drill Rigs is now not expected to dock in Freetown until early February. On arrival, and following customs clearance at the Freetown port, they will be transported directly to the Ferensola site, in order to commence the planned drill programme designed by Sula's Technical Director.

While Sula originally planned to use a single drill rig, Sula's chosen drilling partner, EQD, has mobilised two rigs for use at Ferensola at no additional cost to Sula. Accordingly, this should ensure that the planned drill programme, originally envisaged to be 2,400m, will be completed expeditiously.

Sula also notes that, as previously announced, EQD is taking a significant portion of its payment for the drill contract in the form of new ordinary shares in Sula, (with an agreed floor price for the ordinary shares of 0.35p), which will serve to assist the Company in conserving its cash resources. Sula currently anticipates that, as a result of this financing deal, it will be able to drill more than the 2,400m originally planned, thereby potentially enabling a larger JORC Exploration Target to be identified. Sula's geologists have planned additional holes to capitalise on this opportunity.

Dalakuru Camp

Since signing the drilling contract, significant preparatory work has been completed at the Dalakuru Camp ahead of the arrival of the drilling crews, Drill Rigs and other vehicles, including:

   --    construction of a new bridge and the upgrade and repair of local roads; 
   --    establishment of 10 new drill collar pads for the Drill Rigs; 

-- camp footprint expanded to accommodate the increased number of people and equipment during the drilling campaign; and

   --    three new water sources located to facilitate EQD's access to water required for drilling. 

Grab Sample Assay Results

As announced by the Company on 15 November 2016, gold was recovered from crushed and panned oxide samples collected from a road cutting that cross cuts the TZ2 ("Eastern Target") IP anomaly within the Ferensola licence. A sample from this location was submitted for assay along with additional samples collected from artisanal waste dumps located within the main river that flows from the Kuwait artisanal mining area and which cuts across the TZ2 IP anomaly.

Two artisanal dump samples returned grades of 11.2 and 2.6 g/t Au respectively, with the oxide sample extracted from the road cutting returning a grade of 4.8 g/t Au. Whilst the exact source of the river terrace artisanal waste dump samples is unknown, Sula believes that the road cutting sample directly relates to the TZ2 IP anomaly and is likely to be close to the mineralised source (see Figure 1).

Figure 1 shows the location of the samples in relation to the IP anomaly data and regional grab samples collected to date, with Figure 2 showing the samples submitted for assay. All samples are related to quartz / pyrite mineralisation being similar to the previous samples collected and the dominant mineralisation observed in the November 2015 diamond drilling campaign at the TZ0 / Sanama Hill anomaly. Figure 1 also shows the full IP anomaly data whereby 8.5km of potentially mineralised targets has been identified.

http://www.rns-pdf.londonstockexchange.com/rns/8070V_-2017-2-1.pdf

Figure 1: Grab sample locations in relation to the TZ2 IP anomaly

http://www.rns-pdf.londonstockexchange.com/rns/8070V_1-2017-2-1.pdf

Figure 2: Recent samples submitted for analysis

Roger Murphy, Sula's CEO, commented:

"I am pleased that the latest assay results provide further evidence of gold mineralisation on the Eastern Target, which we will be drilling soon. Whilst the delay in shipping, which is outside our control, somewhat frustrating, we are confident that with two rigs deployed we will complete the programme faster than originally planned. I would also like to thank our team on site in Sierra Leone for their efforts in preparing for the forthcoming drilling campaign, especially over the holiday season. We look forward to updating the market on our progress in due course as appropriate."

For further information, please contact:

 
 Sula Iron & Gold plc 
  Roger Murphy (CEO)                 [phone] 
 
 
 Strand Hanson Limited (Financial 
  and Nominated Adviser) 
  James Harris / Matthew Chandler    [phone] 
  / James Dance                       3494 
 
 
 VSA Capital Limited (Broker)        [phone] 
  Andrew Raca                         5000 
 

Notes:

Sula is a multi-commodity exploration company focused on Sierra Leone. The Company's main objective is to explore and advance its 153km(2) Ferensola Project in Northern Sierra Leone, which is highly prospective for gold, iron ore and coltan. In December 2014, the Company achieved a corporate milestone in delivering its JORC MRE for the BIF 1 iron ore project. A total resource of 514.5Mt @ 31.8% Fe was identified and total oxide resource of 55.5Mt @ 45.39% Fe. In July 2015, the Company defined a JORC Exploration Target on its Ferensola Gold Project. The Exploration Target centres on Sanama Hill, with a tonnage range of between 5 and 7 million tonnes ("Mt"), grading at between 4 and 8 g/t Au, which equates to between 0.8 and 1.5 million ounces ("Moz") Au. The Exploration Target was restricted to a 2km strike length segment of the regional fold belt that is believed to extend for over 10km.

The information in this release that relates to Exploration Results has been reviewed by Mr Howard Baker, Non-Executive Technical Director of Sula. Mr Baker is a Chartered Professional Fellow of the Australasian Institute of Mining and Metallurgy (Membership Number 224239) and a Competent Person as defined by the rules of International Reporting Codes that are aligned with CRIRSCO.

Mr Baker therefore has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration targets, Exploration Results, Mineral Resources and Ore Reserves', also known as the JORC Code and as a qualified person under the AIM Rules for Companies. The JORC code is a national reporting organisation that is aligned with CRIRSCO. Mr Baker consents to the inclusion in this announcement of the matters based on his information in the form and context in which they appear.

This information is provided by RNS

The company news service from the London Stock Exchange

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February 02, 2017 02:00 ET (07:00 GMT)