Sula Iron & Gold raise £800k

PUBLISHED: 10 Oct 2013 @ 20:08 | Comments (10) |

Sula Iron & Gold (LSE:SULA), a multi-commodity exploration company focussed on Sierra Leone,has raised £800,000 by way of a placing of 40,000,000 new ordinary shares in the capital of the company (‘the Placing Shares’) at a price of 2 pence per Placing Share (‘the Placing’) with a range of institutional and other investors (‘the Placees’).

Each Placing Share includes a warrant to subscribe for a further new ordinary share at 3 pence per share (‘the Warrants’), subject to the approval of Sula shareholders as more fully described below. The funds raised will be used to advance the company’s wholly owned 153 sq km Ferensola Project (the ‘Project’ or ‘Ferensola’), located in the northern part of the Sula-Kangari Greenstone Belt in Sierra Leone, which is prospective for iron and gold, as well as for general working capital purposes.

Recent exploration work completed in September 2013 confirmed Ferensola’s iron prospectivity, with a 2,000m drill programme intersecting highs of 12.28m @ 57.10% iron (‘Fe’), 14.59m @ 55.54% Fe and 73.18m @ 43.66% Fe (see announcement dated 24 September 2013).

The company drill tested a 2.2km strike of a 3.1km Banded Iron Formation (‘BIF’) coincident with a strong linear magnetic anomaly proven to extend from African Minerals Limited’s (‘AML’) operational Tonkolili iron mine (‘Tonkolili’), which hosts a 12.8 billion tonne resource. Consequently, Sula will utilise the funds raised through the Placing to implement a second phase exploration programme to test the direct shipping ore (`DSO’) potential of the project.

Sula’s CEO Nick Warrell said, “With a strengthened cash position, exciting exploration results in hand and defined development programmes in place, I believe Sula is well set to advance Ferensola and unlock the Project’s inherent value. Work to date has confirmed that the Project is highly prospective for both iron and gold, and we are focused on delineating a maiden JORC compliant iron resource in 2014 and proving up the gold mineralisation.

“Interestingly, in terms of our iron exposure, Tonkolili, which is contiguous to Ferensola, has recently been subject to a US$990m proposed strategic investment by Tianjin Materials and Equipment Group Corporation, which values Tonkolili at US$6 billion. This valuation, we believe, further underpins the region’s prospectivity and Sula’s significant upside potential, which we hope to unlock through future exploration.”

The Placing Shares will, when issued, rank pari passu in all respects with the existing ordinary shares of the company. Application has been made to the London Stock Exchange for 37,110,000 of the Placing Shares to be admitted to trading on AIM (‘the First Admission’). It is expected that admission of these shares will become effective and that dealings in such 37,110,000 Placing Shares will commence at 8.00am on 15 October 2013.

Application will be made to the London Stock Exchange on or around 17 October for the remaining 2,890,000 Placing Shares to be admitted to trading on AIM (the “Second Admission”), and it is expected that the Second Admission will become effective and that dealings in such 2,890,000 Placing Shares will commence on or around 24 October 2013. A further announcement will be made to confirm this.

Placees will receive one Warrant for every Placing Share subscribed for, exercisable at 3p per share for a period of three years from 15 October 2013. Exercise of the Warrants is subject to shareholder approval for an increase in the Company’s authority to issue and allot new ordinary shares, to be sought at a general meeting of the Company to be held as soon as practicable.

Such increase in the company’s authority to issue and allot new ordinary shares is being sought not only to enable any exercise of outstanding warrants and options, but also to enable the Company to raise further funds in the future.

A circular will be sent to shareholders shortly convening a general meeting and a further announcement will be made when the circular is posted.

Following the First Admission, the company’s enlarged issued share capital will comprise 159,076,674 ordinary shares with voting rights. The company does not hold any shares in treasury. This figure of 159,076,674 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 FCA’s Disclosure and Transparency Rules.

The Placing has been conducted by Daniel Stewart & Company (LSE:DAN).

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.