Power Metal Resources PLC Regulatory News (POW)

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

14 October 2015

Sula Iron & Gold plc

("Sula" or the "Company")

Placing to raise £500,000

Sula Iron & Gold plc, a multi-commodity exploration company focused on Sierra Leone, announces that it has conditionally raised £500,000 (before expenses), through a placing of 166,666,664 new ordinary shares of 0.1p each in the Company (the "Placing Shares") at a price of 0.3p per Placing Share (the "Placing"). For every two Placing Shares issued a warrant will also be granted to the placee to subscribe for one further new Ordinary Share at 0.6 pence per share for an exercise period of three years (the "Warrants").

The net proceeds of the Placing will be used to carry out an extended drilling programme on the Company's Ferensola Gold Project. Following the Company's announcement on 20 August 2015 that it had conditionally raised £0.4 million (before expenses), with the intention of carrying out a scout drilling programme on the Ferensola Gold Project, the Company's directors have received preliminary expressions of interest from several gold companies regarding the development of the Company's gold assets. Sula has since signed an NDA with one such party, being one of the largest international gold producers (the "Tier 1 company"). The Tier 1 company has indicated that it wishes to visit Ferensola in November 2015 to observe the drilling programme, which will be monitored by SRK Consulting. There can be no guarantee that discussions with such interested parties will result in any form of arrangement or agreement with regard to the Company's Ferensola Gold Project.

The directors believe that any interested party will expect to view the results of a more detailed / extended drill programme. 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 beyond the limited scope of the originally planned scout programme. These additional funds raised today should allow the scope of the drill programme to be increased to a total of 1,500 metres which, the directors believe, should be sufficient to formally engage with a potentially interested gold company, subject to the assay results from the extended drill programme being positive, which is the directors' current anticipation.

Placing

The Placing Shares will, when issued, rank pari passu in all respects with the existing ordinary shares of 0.1p each in the Company ("Ordinary Shares"). Application will be made to the London Stock Exchange plc for admission to trading on AIM of the Placing Shares ("Admission"). Completion of the Placing is conditional on, inter alia, Admission.

It is expected that Admission will become effective and that dealings in the Placing Shares will commence at 8.00 a.m. on or around 28 October 2015.

At present, the Company does not have sufficient shareholder authority to issue all of the above mentioned Warrants unconditionally. Accordingly, the Company intends before the end of October 2015 to issue notice to shareholders to convene a general meeting of the Company in November 2015, at which resolutions will be put to shareholders to increase the directors' authority to issue shares on a non-pre-emptive basis, part of such authority will then enable the Company to grant the Warrants to the Placees.

Following the issue and allotment of the Placing Shares, the Company's enlarged issued ordinary share capital will comprise 590,181,924 Ordinary Shares ("Enlarged Share Capital"). The Company does not hold any Ordinary Shares in treasury. This figure of 590,181,924 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

The Placing is being arranged on behalf of the Company by Daniel Stewart & Company Plc ("Daniel Stewart"). Daniel Stewart will, conditional on Admission, receive commission from the Company pursuant to the Placing and the Company has also granted Daniel Stewart warrants to subscribe for up to 6,000,000 New Ordinary Shares at the placing price. The exercise period for these warrants is five years from the date of Admission.

Related Party Transactions

Howard Baker and Matt Wood, being directors of the Company, have undertaken to subscribe £5,000 and £2,500 for 1,666,666 and 833,333 Placing Shares, respectively, pursuant to the Placing. Each director's participation in the Placing is considered to be a related party transaction for the purposes of Rule 13 of the AIM Rules. Accordingly, the independent director of Sula (being Nick Warrell) considers, having consulted with the Company's nominated adviser, Strand Hanson Limited, that the terms of each director's participation in the Placing are fair and reasonable insofar as Shareholders are concerned.

Following Admission, each of the aforementioned directors' interests in the ordinary share capital of the Company will be as follows:

In addition, Des Congdon, a director of the Company's subsidiary, Blue Horizon (SL) Limited, has undertaken to subscribe for 1,666,666 Placing Shares pursuant to the Placing. Following Admission, Mr Congdon will be interested in 2,499,999 Ordinary Shares representing approximately 0.42 per cent. of the Enlarged Share Capital. Mr Congdon's participation in the Placing also constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules. Accordingly, the independent director of Sula (being Nick Warrell) also considers, having consulted with the Company's nominated adviser, Strand Hanson Limited, that the terms of Mr Congdon's participation in the Placing are fair and reasonable insofar as Shareholders are concerned.

Sula CEO, Nick Warrell, said:

"We are delighted with the continued interest our gold project is generating together with the signing of an NDA and proposed site visit by the Senior Exploration Manager of the Tier 1 company. We look forward to updating the market with further news in due course."

**ENDS**

For further information please visit www.sulaironandgold.com or contact the following:

Notes

Sula Iron & Gold plc is a multi-commodity exploration company focused on West Africa. The Company's main objective is to explore and advance its 153 sq. km Ferensola Project in Northern Sierra Leone, which is highly prospective for iron, gold and coltan. In December 2014, the Company achieved a corporate milestone in delivering its JORC MRE for the BIF 1 iron ore project in which total resource of 514.5Mt @ 31.8% Fe was identified including a total oxide resource of 55.5Mt @ 45.26% Fe.