Power Metal Regulatory News (POW)

SULA IRON & GOLD PLC - Gold Update at Iron and Gold Licence in Sierra Leone

PR Newswire

London, February 8

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

11 February 2013

Sula Iron & Gold plc, an iron ore and gold exploration company focussed onSierra Leone, is pleased to announce that five target areas for hard rock goldmineralisation have now been confirmed for follow-up exploration at Sula'swholly owned 153 sq km Blue Horizon iron ore and gold exploration licence (`theLicence') in Sierra Leone.

Highlights

Sula's Non-Executive Technical Director Chris Wilson, said, "We are delightedthat reconnaissance work has identified five highly prospective explorationtargets that appear to host the source areas of placer gold within the Licencearea. The potential presence of these gold sources confirms our belief that theLicence is highly prospective for gold. This marks another step in our effortsto establish a leading dual-commodity iron ore and gold exploration company.With defined exploration programmes in place to prove up the gold potential,and work on-going on our iron ore prospects, we are confident that our Licenceoffers investors significant upside potential."

Further Information

Exploration Alliance S.A. conducted a reconnaissance review of the goldpotential of Sula's wholly owned Blue Horizon exploration licence in SierraLeone. This included the compilation of existing data into a GeographicInformation System ('GIS') database allowing geospatial analysis of historicdrill intercepts, structural interpretation of publicly available regionalmagnetic data, and interpretation of high resolution satellite imagery. Thiswork has provided Sula with a better understanding of the local geology and thedistribution and potential controls on gold mineralisation.

In January 2013, Sula acquired licence-wide GeoEye-1 satellite data with aresolution of 50cm per pixel. The imagery generated provides detailedinformation on the extent of artisanal placer gold workings which have occurredwithin the Sula licence area for over 60 years, and indicates the source ofsome of the placer gold within the Licence.

Five target areas for hard rock gold mineralisation have been identified basedon the location of historic drill intercepts, potential source areas foralluvial gold deposits, and position of major structures as defined by airbornemagnetic data and drainage orientation. Of these, the Dalakuru and Lagundaprospects are high priority targets.

Areas prospective for gold in the licence are located in the highly prospectiveSula-Kangari greenstone belt rocks, which trend northeast through the licence.The Sula-Kangari belt hosts Amara Mining Plc's (previously Cluff Gold) 2.91MozBaomahun deposit in Sierra Leone and greenstone belts in general host all majorgold deposits in West Africa, which are commonly recognised at surface byextensive artisanal workings.

Structure is known to exert a fundamental control on greenstone-typemineralisation and all major deposits worldwide are associated with regionalscale faults. Major structures within the Licence display a strongnortheast-southwest trend, which is typical of the gold-mineralised greenstonetrend throughout West Africa. The bounding structures to the Sula-Kangarigreenstone belt pass through the Sula Licence, and smaller scale, sub-parallelnortheast-southwest trending structures and contact zones are also common.Northeast trending lineaments are locally cross-cut and offset by smallnorthwest-southeast and east-west trending faults.

Sula consider the association of placer gold workings and major lineamentswithin greenstone belt rocks at the Licence to be highly significant.Furthermore, historic drilling in the Licence has discovered hard rockmineralisation which is open in all directions at the Dalakuru prospect, andalso identified additional gold targets that remain to be explored.

Dalakuru is the most advanced prospect within the Licence, and historic diamonddrilling intercepted 2.00m @ 8.76g/t gold (83.14 to 85.10m, SDD004), 8.72m @10.46g/t gold (89.40 to 98.10m, SDD004), 1.55m @ 11.68g/t gold (171.00 to173.00m, SDD016) and 9.03m @ 6.63g/t gold (161.37 to 170.00m, SDD033).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.Step-out and step-back drilling of mineralisation intercepted in historic drillholes 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 defined 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 defines multiple northeast-southwest trendingstructures and contact zones. The potential presence of multiple structures andcontact zones, juxtaposing different lithologies, coincident with the sourcearea of the Lagunda alluvials is considered highly significant. Regionalmagnetic data suggests that Lagunda is a dilational zone, where multiple faultsand contact zones provide excellent structural preparation, and competencycontrasts between lithological units could serve to focus fluids.

Sula considers Lagunda a high priority target. A detailed ground magneticsurvey is planned, in conjunction with reconnaissance soil sampling, in orderto better define the structural architecture and location of most prospectivetargets.

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.

The information in this announcement has been reviewed by Dr Chris Wilson,Technical Director of Sula, a Chartered Professional Geologist with 24 years'experience, a Qualified Person (NI43-101 and JORC), Fellow of the AustralianInstitute of Mining and Metallurgy and a Fellow of the Society of EconomicGeologists.

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

Sula Iron & Gold plc is an iron ore and gold exploration company focussed onWest Africa. The Company's main objective is to explore and advance its keyExploration Licence EL54/2011, in Northern Sierra Leone, which boasts a dualcommodity focus and is highly prospective for iron and gold. The 153 sq kmlicence area is contiguous to African Minerals' operational Tonkolili ironmine, which has a JORC compliant resource of 12.8 billion tonnes.

Exploration work at the Project has confirmed the presence of banded ironformation (`BIF') at surface over a strike length of 3.1km and drill-ready. TheBIF extends NE from the Tonkolili mine into Sula's licence area. An explorationtarget of 500 million tonnes at 30.4% iron for magnetite and 55% iron forhematite has been given by independent mining consultants SRK ExplorationServices Ltd.

Significant greenstone-style gold mineralisation has also been identified atvarious prospects within the licence area. Greenstone-style deposits aretypically located on or proximal to regional scale, deep seated faults andlineaments. Artisanal miners have exploited placer gold within the Project areafor more than 60 years, and active workings are observed in at least fiveseparate areas.

The Company has a strong board and management team with in depth knowledge ofSierra Leone and a proven track record in developing African resource projects.