Sula Iron plunges after placing

Shares in Sula Iron & Gold plunged over 30% on Wednesday after the group raised £500,000 from a discounted placing.

The London-listed miner said it has issued 166.6m new shares at 0.3p each, adding for every two placing shares issued it will also issue a warrant for one further new share at an exercise price of 0.6p per share.

The company said the proceeds from the placing will be used to fund an extended drilling programme on its Ferensola gold mine in Sierra Leone.

A number of gold company have registered interest in developing the company’s gold assets, while "one of the largest international gold producers" will evaluate the Sierra Leone after signing a non-disclosure agreement with Sula.

However, the miner warned there was no guarantee that negotiations with the interested parties would result in any form of arrangement of agreement.

"The directors believe that any interested party will expect to view the results of a more detailed, extended drill programme,” the company said in a statement on Wednesday.

“Having consulted with both its financial advisers and its geological consultants, the directors therefore believe that it is in the company's best interests to raise these additional funds now in order to extend the drill programme in as cost effective a manner as possible.”

Sula shares were down 31.20% to 0.344p at 1041 BST on Wednesday.