Sovereign Mines of Africa raises 1.25m pounds

Sovereign Mines of Africa has raised 1.25m pounds through a placing by Shore Capital Stockbrokers of 41.67m new ordinary shares with institutional and other investors at a price of 3.0p each.

The proceeds from the placing are expected to be used to fund the company's next major drilling programme on the company's Mandiana-Magana property and for working capital requirements, with a view to achieving SMA's aim of delineating a maiden gold resource for the project at a tonnage and grade to support a bulk-mineable open-pit operation.

The company currently anticipates conducting a drilling campaign at Mandiana-Magana of approximately 10,000 metres, which will likely comprise approximately 9,000 metres of Reverse Circulation (RC) drilling and approximately 1,000 metres of diamond drilling, as deeper extensions to a few selected RC holes.

It is hoped that drilling operations will commence late in the first quarter or early in the second quarter of 2013, subject to the timely engagement of relevant contractors.

David Pearl, Chairman of Sovereign Mines of Africa, said: "We are delighted to have received institutional investor backing for the next phase of our drilling programme. Results from our exploration work to date - Phase 1 results announced 26 January 2012 and Phase 2 results announced August 8th 2012 - have been very encouraging as most of our drilling to date has cut what we believe to be ore-grade gold mineralization over broad intervals."

The placing shares will rank pari passu in all respects with the company's existing ordinary shares and will represent 17.6% of the company's enlarged issued share capital.

Application has been made for the placing shares to be admitted to trading on AIM and admission is expected to occur, and dealings are expected to commence on January 29th.

MF