Sula Iron & Gold raises £500,000 to extend Ferensola drill programme

The company raised £500,000 before expenses in a placing of 128.59m new shares priced at 0.40p each, a 13% discount on the closing middle-market price on Monday.

The Ferensola gold project is at Sula's high-conviction eastern target and at Sanama Hill, which already hosts an exploration target of 5-7m tonnes at a grade of between 4-8 grams per tonne, for between 0.8-1.5m ounces of contained gold.

Net proceeds from the placing would also be used to assess potential drilling of 4.5km of induced polarisation anomalies beyond the current drill programme. They would also go to other potential regional exploration programmes and working capital.

Sula has gained a new long-term investor from Asia through the placing, while two existing investors increased their stakes at a 90% premium on their previous investments.

Chief executive Roger Murphy said the board believed the placing's success was a particularly strong endorsement of the company's strategy at Ferensola.

“With two drill rigs and associated equipment now on-site and drilling at the Ferensola project under way, the company is in a strong position to expand on its originally planned exploration programme of 2,400 metres, potentially enabling a larger JORC exploration target to be identified"

At 12:37 GMT, shares in Sula Iron & Gold were down 2.17% to 0.45p each.