Sula Iron & Gold issues 52.4m shares to Equity Drilling Ltd

Sula Iron & Gold has paid Equity Drilling Ltd for its 3783m of drilling on the Ferensola gold project in northern Sierra Leone, with a large portion of that payment in new shares.

Equity would receive 52.4m new shares in Sula based on a price of 0.43p each, or about 2.3% of the enlarged capital. This was the mid-market closing price for Sula's shares on 18 May.

"This is price is almost a 100% premium to the share price when the drill contract was entered into in December 2016," said Sula.

"At the time we entered into the contract Sula's shares were around 0.22p," said chief executive Roger Murphy.

"So this innovative payment mechanism means that we have issued around half as many shares to pay for the drilling as we would have, had we paid all in cash; this mechanism has thereby helped us to drill far more than we would have been able to if we'd had to pay all in cash."

At 10:51 BST, shares in AIM-traded Sula were down 1.2% to 0.41p each.