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Sula Iron & Gold plc, a multi-commodity exploration company focussed on Sierra Leone, have announced that an independent valuation of the Company’s wholly owned 153 km2 Ferensola Project in Sierra Leone, which is prospective for both iron and gold, has been prepared by independent mining consultants SRK Exploration Services.
SRK Exploration Services (‘SRK’) has established a maximum potential value of approximately US$200 Million for Sula’s Ferensola Project in Sierra Leone, which is prospective for both iron and gold, based on the currently available geological data and SRK’s understanding of the geological models applied. With a current market cap of £10 million (US$16.4 million) this valuation highlight’s Sula’s significant value potential.
In terms of the maximum potential for gold, SRK considers that the highest level of prospectivity is the geological model for mesothermal gold which could be expected to contain in the region of 250,000 – 400,000 ounces of gold and may be as large as 40 Mt. Lower prospectivity may be represented by the model for gold associated with banded iron formation or laterite. In support of this gold target, it is worth noting local operators in the region – current resource estimates at the nearby Komahun gold deposit are 3.6 Mt @ 4.69g/t Indicated and 2.6Mt @ 4.08 g/t Inferred (cut-off 2.4 g/t), and current resource estimates at the Baomahun gold deposit (southern Sula-Kangari greenstone belt) are 23.3 MT @ 1.62g/t probable reserves and 38.4 MT @ 1.82 g/t Indicated Resources with additional inferred resources.
In addition to the prospectivity for gold SRK ES also consider that the licence area has excellent potential for an iron ore resource to be delineated, demonstrated by the drilling conducted in mid-2013, on an extension of African Mineral’s Tonkolili BIF which is contiguous to Sula’s Ferensola project. The existence of BIF mineralisation over a strike extent exceeding 3km has now been proven, though further drilling is required to outline a resource. SRK ES is confident that the exploration target of 500 MT is achievable, and the potential for a DSO component is good. Whilst the potential for iron is unlikely to be on the same scale as Tonkolili it is still substantial.
It should be noted that the “potential” value for the gold targets has been heavily discounted due to their stage of development and the potential value of the Iron target has been equally discounted on the basis of its size.
Furthermore, a technical valuation of US$ 36.7 million has also been applied to the licence area based upon the geological information available and SRK’s view on the current status of Ferensola, and Sula’s probability of success. (It is worth noting that 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 status of the mining industry or the sellers financial position.)
Sula Iron & Gold plc is a multi-commodity exploration company focussed on West Africa. The Company’s main objective is to explore and advance its Ferensola Project, in Northern Sierra Leone, which is highly prospective for iron and gold. Sula is currently focussed on delineating a maiden JORC compliant iron resource and proving up the gold mineralisation in 2014, by conducting soil geochemistry and ground geophysics prior to a diamond drilling programme, in order to maximise the Licence area’s value potential. 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 Fe.
Exploration work at the project has confirmed the presence of Banded Iron Formation (‘BIF’) at surface, which has a known strike length of 3.1km. The BIF is proven to extend NE from the Tonkolili licence into Sula’s licence area. A 2,000m scout drilling programme conducted over a 2.2km section of BIF, confirmed the Licence area’s prospectivity for consistently high grade iron mineralisation. An exploration target of 500 million tonnes at 30.4% iron for magnetite and 55% iron for hematite has been given by exploration consultants SRK Exploration Services Ltd.
Significant Greenstone Belt-style gold mineralisation has also been identified at various prospects within the licence area. Five target areas for hard rock gold mineralisation have been identified based on the location of historic drill intercepts, the source areas for alluvial gold deposits, and the position of major structures as defined by airborne magnetic data and drainage orientation.
