Power Metal Regulatory News (POW)

SULA IRON & GOLD PLC - Final Results

PR Newswire

London, March 27

Sula Iron & Gold plc / Index: AIM / Epic: SULA / Sector: Natural Resources

Sula Iron & Gold plc, an iron ore and gold exploration company focussed onSierra Leone, announces its final results for the period from incorporation on6 October 2011 to 30 September 2012.

Highlights

Chairman's Statement

In the short space of time since listing on AIM in October 2012, when theCompany successfully raised £1.15 million, I am delighted to report that Sulahas made solid progress towards achieving its objective of establishing itselfas a leading iron and gold exploration company.

Since admission, Sula has focussed on proving up the resource potential of its100% owned 153 sq km exploration licence (`the Licence' or `the Project') inSierra Leone. The Licence area is located in the Sula-Kangari Greenstone Beltin Sierra Leone and is contiguous to the Tonkolili Iron Ore Mine (`Tonkolili'),which has a JORC compliant resource of 12.8 billion tonnes and is operated byAIM's biggest miner, African Minerals Limited (AIM:AMI). Other nearbyoperations include Amara Mining plc's (AIM:AMA) 2.91Moz Au Baomahungreenstone-style gold deposit. Significantly, Sula's Licence is considered tobe prospective for styles of iron ore and gold mineralisation similar toTonkolili and Baomahun respectively. As a result, we are concurrently operatingdual commodity focussed exploration programmes in order to maximise theresource potential of the Licence.

I am confident that our established Board and management team, with a proventrack record in developing African resource projects, have the necessary skillsto advance our highly prospective Project up the value development curve. CEONick Warrell has over 22 years' mining experience in Sierra Leone havingdiscovered various gold and platinum deposits and founded Golden ProspectMining, a former AIM company. Nick is also an Honorary Paramount Chief of theDiang Chiefdom, which controls the concession area, demonstrating Sula's strongin-country relations.

Post-period end we appointed Gareth O'Donovan to the Company as non-executivetechnical director. Gareth is a Corporate Consultant Geologist (Exploration)with over 27 years' experience in mining and exploration projects, andspecialises in the design, implementation and management of explorationprojects from grassroots to pre-feasibility. For the past ten years he has beenManaging Director of SRK Exploration Services Ltd (`SRK'), which undertookearly exploration work at Sula's Licence area resulting in the CompetentPerson's Report. I am confident that Gareth's knowledge and experience will beof great value as we look to prove up the resource potential of our Licence.

Sula intends to undertake further exploration as we work towards proving up asignificant multi commodity resource. On listing in October 2012 we raised £1.15 million, and a further equity placing in November 2012, to satisfy marketdemand, raised an additional £450,000. The funds raised are being used toexecute the defined development programmes in place to unlock the Licence'siron ore and gold resource potential. 2013 promises much activity, startingwith a 2,000 metre diamond drilling programme in Q2 2013 to test the strikecontinuity, thickness and iron grade as we work towards delineating a JORCcompliant iron resource later this year. In addition, we will continue to proveup the gold resource potential through ground magnetic surveys and soilsampling aimed at understanding better the gold structures and identifying thelocation of the most prospective targets for hard rock gold mineralisation,with the Dalakuru and Lagunda prospects marked as high priority targets.

Financials

The period to 30 September 2012 has resulted in a loss of £563,000. As isnormal for an exploration company, no income has been generated. The lossresults from administrative costs, primarily incurred in Sierra Leone.

Corporate Social Responsibility

In tandem with Sula's defined exploration work, the Company maintains a solidcorporate social responsibility programme (`CSR') in the Chiefdoms of Diang andSamia Bendugu, the principal areas of exploration of Blue Horizon (SL) Limited,the Company's wholly owned subsidiary.

Since listing on AIM, Sula has completed the rebuilding of a 35 mile roadnetwork in the Diang Chiefdom and constructed a 30 mile road and four bridgesin the Samia Bendugu Chiefdom. In addition to facilitating our exploration anddrilling programmes, these road networks have revitalised the local economy andthe Honourable Member of Parliament in both Chiefdoms has commended Sula's workto the Sierra Leone Government at the highest level.

Sula has also built a school in Dalakuru Town, Diang Chiefdom, complete with atoilet block, tables, chairs, and blackboards. In recognition of the Company'scontribution to the education of the children of the town, the Dalakuru TownChief and his Elders have named the school `The Blue Horizon RC School' afterour operating subsidiary. The school is presently educating 144 children.

Furthermore, Sula has provided schools in Kondembaia and Badalla in the DiangChiefdom with books and writing materials, the Diang Youth Association whorepaired the RC Church in Kondembaia and the Mosque in Dalakuru with sand andcement, and the clinics in Kondembaia and Dalakuru with medical supplies.

Outlook

Sula's growth strategy is focussed on developing the Licence to create aleading iron ore and gold exploration company and, in the process, look tocreate value uplift for shareholders. I believe the Company presents acompelling investment opportunity and in this I am not alone. Miningconsultant, SRK, has at this early stage already assigned an exploration targetof 500Mt at 30.4% iron for magnetite and 55% iron for haematite.

With an experienced Board and management team, and a highly prospective Licencethat boasts a dual commodity focus, I am confident that we have the foundationsin place to enhance the Project's attributable value.

Finally, I would like to take this opportunity to thank my fellow directors,management and advisors for their dedication and help, as well as ourshareholders for their continuing support.

Sula's Licence, EL54/2011, is a renewable four year licence comprising 153 sqkm and located within the Northern Province of Sierra Leone, 55 km south ofKabala, the nearest town, and 290 km north east of the capital Freetown. Goodinfrastructure connects the Project to Freetown via a tarred road followed by80km on bush roads, to the west of the Licence. A new 44 km road network hasbeen constructed to the east of the Project, which links the Licence to AfricanMinerals Limited's (`AML') road at Bumbuna. The Licence area also contains theoutflow of Lake Sonfon, which dominates the local geography draining downthrough the centre of the area, flowing eventually into the Sende River andsouthwest towards the Atlantic Ocean.

The Licence area contains an exploration camp adjacent to the village ofDalakuru. The exploration camp was completely renovated by the Company in Q22012 with the installation of running water, sanitation, cooking and multipleair-conditioned accommodation facilities, all of which are powered by fullyintegrated diesel generators. The camp is ideally situated and equipped tofacilitate future exploration work within the Licence area.

Local geology is composed of a mixture of greenstone volcano-sedimentarymetamorphosed units of the Sula-Kangari Greenstone Belt as well as the Late andSyn-kinematic granites. The Directors believe that the region is highlyprospective for iron ore and gold, as demonstrated by the work completed todate by the Company, historical work completed by previous operators, the workof SRK, and by the presence of a number of operators in the region.

Iron

The prospectivity for iron mineralisation in the form of BIF supergene enrichedoxidised zones is very strong within Sula's Licence area. In order to prove upthe resource potential of the iron ore, the Company has a defined explorationprogramme in place focussed on Area 1 (`the target'), which is located in thesouth-western part of the Licence and directly along strike from an undrilledmagnetic high within the Tonkolili licence. The target comprises a 2.7 km long,northeast trending, linear magnetic high. Detailed mapping and reconnaissancework completed by the Company at Area 1 in January 2013 defined BIF outcrop andBIF fragments in duricrust over a strike length of 3.1km, coincident with thismagnetic high. These findings in turn advanced the Project to a drill readystatus.

Channel sampling completed in February 2012 confirmed the presence ofhigh-grade iron mineralisation at Area 1, with two channel samples returningintercepts of 18 metres at 51.83% iron and 22 metres at 56.22% iron. Channelsamples were taken across a 50 metre wide BIF outcrop; a 10 metre wide break inoutcrop could not be sampled. Importantly, the samples revealed that gradeswere consistent across the outcrop, confirming field observations that the BIFdoes not suffer from dilution by non-ferrous bands.

A 2,000 metre diamond drill programme is scheduled before the end of Q2 2013 totest the strike continuity, thickness and iron grade of BIF at Area 1, with theultimate aim of testing the potential for an iron deposit in excess of 0.5Bt,and delineating a JORC compliant resource in 2013. The drilling programme willcomprise eight drill collars spaced 320 metres apart over a strike length of2.2km. Each hole will be drilled at an azimuth of 140˚ and a dip of 50˚, to adownhole depth of 250 metres.

Following this first phase of diamond drilling, shallow vertical holes arerequired to test the potential for direct shipping ore (`DSO') grade ironmineralisation. Initial field mapping completed in December 2012 has indicatedthat BIF outcrops are variably oxidised to higher grade haematitemineralisation; such supergene processes are responsible for the formation ofthe higher grade DSO ores.

The Board's confidence in the Project's iron ore prospectivity is furtherunderpinned by local operators in the region. AML wholly owns the Tonkolililicence, which adjoins the Sula Licence to the south and hosts the BIFmineralisation proven to extend from Tonkolili into Sula's Project. In December2010, AML declared a JORC compliant Mineral Resource estimate comprising 12.8Btof iron ore. AML has since constructed an integrated mine, rail and portinfrastructure and, in November 2011, announced loading of its first Tonkoliliiron ore shipment.

Gold

Artisanal miners have exploited placer gold within the Sula Licence area formore than 60 years, and active workings are observed in at least five separateareas within the Project. As a result, the Licence area is highly prospectivefor gold and the Board is confident that the Licence area hosts the source ofprimary gold.

In January 2013, Sula acquired Licence-wide GeoEye-1 satellite data with aresolution of 50cm per pixel. The imagery generated provided detailedinformation on the extent of artisanal placer gold workings and indicated thesource of some of the placer gold within the Licence. As a result of this, fivetarget areas for hard rock gold mineralisation have been identified based onthe location of historic drill intercepts, the source areas for alluvial golddeposits, and the position of major structures as defined by airborne magneticdata and drainage orientation. Of these, the Dalakuru and Lagunda prospects aremarked as high priority targets.

Gold mineralisation observed at the Licence is associated with quartz-sulphide,greenstone-style veins, lenses and breccias. This style of mineralisation isvery common in West African Greenstone Belts and is recognised elsewhere inSierra Leone Greenstone Belts. Greenstone-style deposits are typically locatedon or proximal to regional scale, deep seated faults and lineaments, and ingeneral host all major gold deposits in West Africa, which are commonlyrecognised at surface by extensive artisanal workings. Mineralisation occurs inshoots and lenses on second and third order structures at low angles to themain structure, and is associated with quartz sulphide mineralisation anddisseminated to massive sulphide.

Areas prospective for gold in the Licence are located in the highly prospectiveSula-Kangari Greenstone Belt rocks. The Sula-Kangari belt hosts Amara MiningPlc's 2.91Moz Baomahun deposit in Sierra Leone. Major structures within theSula Licence display a strong northeast-southwest trend, which is typical ofthe gold-mineralised greenstone trend throughout West Africa. The structures ofthe Sula-Kangari Greenstone Belt pass through the Sula Licence, and smallerscale sub-parallel northeast-southwest trending structures and contact zonesare also common. Northeast trending lineaments are locally cross-cut and offsetby small northwest-southeast and east-west trending faults. As a result, Sulaconsider the association of placer gold workings and major lineaments withinGreenstone Belt rocks at the Licence to be highly significant. Furthermore,historic drilling in the Licence has discovered hard rock mineralisation whichis open in all directions at the Dalakuru prospect, and also identifiedadditional gold targets that remain to be explored.

Dalakuru is the most advanced prospect within the Licence. Previous operatorson the Project completed 3,406 metres of RAB drilling and 5,392 metres ofdiamond drilling at three prospects considered prospective for gold. Nineteendiamond drill holes totalling 3,402 metres were completed at Dalakuru andintercepted significant quartz-sulphide breccias:

Mineralisation is hosted in massive pyrite and pyrite cemented breccia withquartz fragments and is open in all directions.

Dalakuru is located on a major northeast-southwest trending structure thatjuxtaposes a strong magnetic high against a strong magnetic low. Thisdifference in magnetic response indicates that different lithologies occureither side of the fault and the resultant competency contrasts are consideredimportant in focusing mineralising fluids. The Dalakuru structure is at least5km long but extensive development of laterite masks bedrock geology along itslength. Sula is planning a detailed ground magnetic survey to better constrainthe location of the fault zone, which will then be followed by a soil andchannel sampling programme to assist with drill targeting along strike toexplore the size potential and morphology of Dalakuru. Step-out and step-backdrilling of mineralisation intercepted in historic drill holes is a priority.

Lagunda is defined by extensive artisanal alluvial gold workings which outlinea northeast-southwest trending target that is approximately 6km long and 2kmwide. The northwest boundary of the prospect is marked by a regionalnortheast-southwest trending structure that juxtaposes a strongly magnetic unitagainst a weakly magnetic unit. The Lagunda target area displays a mottledmid-range magnetic response which identifies multiple northeast-southwesttrending structures and contact zones. The potential presence of multiplestructures and contact zones, juxtaposing different lithologies, coincidentwith the source area of the Lagunda alluvials is considered highly prospectiveby the Board. Regional magnetic data suggests that Lagunda is a dilationalzone, where multiple faults and contact zones provide excellent structuralpreparation, and competency contrasts between lithological units which act asconduits for hydrothermal fluids and are excellent traps for goldmineralisation in greenstone-style environments. Consequently, Sula considersLagunda a high priority target. A detailed ground magnetic survey is planned,in conjunction with reconnaissance soil sampling, in order to better define thestructural architecture and location of prospective targets.

Post period end, Sula evaluated historical exploration work of the Licence areaconducted by Mano River Resources Inc., (`Mano River') and Golden Prospect plc(`Golden Prospect') in 2003. The work programme included 879 samples coveringan area of approximately 50km sq, which were assayed by SGS Laboratories inGhana. Mano River and Golden Prospect defined a 3km long northwest trendinggold-in-soil anomaly termed the Yanfarina-Dalakuru-Sende (`YDS') gold zone. TheYDS zone is coincident with the extensive artisanal workings within the Licencearea, and is located within a prominent structure, approximately 9km long by5km wide. Mano River and Golden Prospect carried out trenching work whichidentified a series of high grade gold-bearing narrow veins that couldrepresent a highly significant bulk tonnage gold target, with resultsincluding:

The mineralised quartz veins identified by Mano River and Golden Prospect trendnorth westerly and range between 0.1m and 1m wide and were traced continuouslyover a distance of at least 75m. Sula will use this historical data tosupplement its current understanding of the gold mineralisation within theLicence area and to help target future gold exploration.

The other prospect areas, known as Simbako, Simbako East and Northeast arelocated on regional, northeast trending lineaments which define the contactbetween magnetic highs and magnetic lows. Localised alluvial workings areassociated with each prospect indicating the potential for hard rock goldmineralisation. These prospects are not covered by regional magnetic data andthe structural architecture of the projects is unknown. Further work comprisingacquisition of ground magnetic data and reconnaissance geochemical samplingwill be conducted following completion of the Dalakuru and Lagunda workprogrammes.

Conclusion

Reconnaissance work completed by Sula combined with historical workings,independent reviews and local operators in the region demonstrate howprospective Sula's Licence area is. The Company has numerous value triggerpoints ahead thanks to its defined work plan aimed at better understanding thegold structures and identifying the location of the most prospective goldtargets, and testing the strike continuity, thickness and iron grade of BIF inorder to delineate a JORC compliant iron resource in 2013.

The Project boasts a close proximity to existing producers with solidinfrastructure in place. AML's 12.8Bt Tonkolili iron ore mine is of greatsignificance for Sula, with BIF mineralisation proven to extend into Sula'sLicence area. Likewise, Amara Mining Plc's 2.91Moz Baomahun gold deposit inSierra Leone appears to share the same, highly prospective geology as Sula'sLicence area.

With exposure to both base and precious metals, and defined explorationprogrammes in place to accelerate these resources up the value developmentcurve, Sula offers significant upside potential for investors.

Chris Rourke / Guy Wheatley Beaufort International +44 (0) 20 7382 8387

Felicity Edwards/ Charlotte St Brides Media and Finance +44 (0) 20 7236 1177Heap

NOTES TO THE FINANCIAL STATEMENTS

1. Basis of preparation

The financial information set out above does not constitute the Company'sstatutory accounts for the period ended 30 September 2012 but are derived fromthose accounts. Statutory accounts for 2012 will be delivered to the Registrarof Companies following the Company's annual general meeting.

2. Loss per share

Basic and diluted loss per share

The calculation of basic and diluted loss per share at 30 September 2012 wasbased on the loss attributable to ordinary shareholders of £563,000, and aweighted average number of ordinary shares outstanding of 54,411,111.

3. Publication of report and accounts

The report and accounts for the period ended 30 September 2012 has been postedto shareholders and are available from the Company's registered office at 190High Street, Tonbridge, Kent TN9 1BE and on Sula's website, www.sulairongold.com.