Sula Iron & Gold, an iron ore and gold exploration company focussed in Sierra Leone, began its first day of trading on AIM on Wednesday.
The company place 19.17m new ordinary shares at 6p each to raise £1.15m before expenses, giving a market capitalisation of around £7m.
The firm is using the funds to advance its 153 sq km licence area in the mineral rich Sula Mountain Range in Sierra Leone, which is highly prospective for iron and gold.
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The company's aim is to explore and advance the licence area which is contiguous to the operational Tonkolili iron mine belonging to AIM's biggest miner, African Minerals, which has a JORC compliant resource of 12.8bn tonnes.
Exploration has confirmed the presence of banded iron formation (BIF) at the surface. The firm has an exploration target of 500m tonnes at 30.4% iron for magnetite and 55% iron for hematite, given by independent mining consultants.
The Chief Executive Officer, Nick Warrell, said: "The combination of a highly prospective iron and gold licence area with an attractive address, good regional infrastructure and an excellent board and management team with a proven track record in developing resource projects in Africa and 22 years' ground experience in Sierra Leone, distinguishes Sula as a compelling opportunity.
"Excitingly, the BIF identified at the world-class Tonkolili iron ore mine extends into our licence area and artisanal workings indicate the potential for a primary epithermal gold deposit, with previous grab samples returning up to 4.92 g/t Au. This gives the company a dual commodity focus, which not only diversifies our exposure but provides significant potential for value up-lift as we embark on exploration programmes with a focus on iron ore initially and progressing onto gold.
"Our near term objective is to further define the extent of the BIF and establish volumes and grades whilst exploring the oxidised hematite cap which may also be gold bearing. By fast-tracking the exploration and development of our iron ore and gold licence area with the aim of delineating a JORC compliant resource, we believe we can rapidly advance the project up the development curve to enhance shareholder value."
The share price was up 9.09% to 7.5p by mid-afternoon.
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