Sula Iron comes back for seconds

Less than a month after listing on AIM, Sula Iron & Gold is tapping the market to raise funds to speed up work on the firm's Sierra Leone iron project.

The miner plans to raise £0.45m through a placing of 7.5m shares at 6p each, half a penny below the closing price of the shares the day before the placing was announced.

The group is also issuing warrants to subscribe for Sula ordinary shares at 8p a pop. Participants in the placing will receive the warrants on the basis of one for every two placing shares purchased.

The group's listing of AIM in October appears to have whetted the appetite of investors, as the group said its placing was in response to market demand. The funds will enable the company to implement a revised exploration programme at its Sierra Leone iron project and get cracking on its drilling campaign.

The revised work programme will include acquisition and interpretation of high resolution satellite imagery; detailed mapping to ascertain the source of gold mineralisation; and detailed mapping of the outcropping banded ironstone formation (BIF) mineralisation to better define the spatial extent of near surface direct shipping ore (DSO) - all expensive stuff.

Sula Iron & Gold is also planning to excavate a number of trenches across DSO outcrops which will facilitate channel sampling of these zones in preparation for drill targeting ahead of a planned drilling programme in the first quarter (Q1) of 2013.

"Our revised exploration programme will accelerate the progression of our licence area which has been identified as having outcropping BIF with DSO potential to a drill ready status by Q1 2013. This is a major advancement in terms of the project's development and exploration schedule as we look to define the iron ore resource potential of the project and enhance its attributable value in the near term," said Sula's Chief Executive Nick Warrell.

While all of this is going on, the group will be performing reconnaissance work and field mapping in the north part of the licence area, where the company thingks there is the potential for a primary greenstone-hosted gold deposit. It bases this belief on previous grab samples in the area which have churned out 4.92 grams per tonne of gold.

"As part of the gold exploration programme, the company is planning to re-log and re-sample historic diamond drill core. By fast-tracking the exploration and development of both the iron ore and gold mineralisation in our licence area, with the aim of delineating a JORC [industry body] compliant resource, we believe we can rapidly advance the project up the development curve to enhance shareholder value," Warrell claimed.