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SULA IRON & GOLD PLC - £2 million Financing Facility

August 12, 2014

13 August 2014 Sula Iron & Gold plc ("Sula" or the "Company") 2 million Financing Facility Sula Iron & Gold plc (AIM:SULA), the exploration and development company focused on iron ore and gold in Sierra Leone, is pleased to announce that it is has secured a 2 million, five year Equity Financing Facility ("EFF") with Darwin Strategic Limited ("Darwin"). In conjunction with the EFF, the Company has issued 1,700,000 warrants to Darwin, further details of which are set out below. The EFF agreement with Darwin provides Sula with a facility of up to 2.0 million which (subject to certain limited restrictions) can be drawn down at any time over the next five years. The timing and floor subscription price of any draw down is always at the complete control and sole discretion of the Company. There are no penalty fees payable for not using the facility. Sula is under no obligation to make a draw down and may make draw downs at its discretion, up to the total value of the EFF, by way of issuing subscription notices to Darwin. Following delivery of a subscription notice, Darwin will subscribe and the Company will allot and issue to Darwin new ordinary shares in Sula ('Ordinary Shares'). The subscription price for any Ordinary Shares to be subscribed by Darwin will be set with reference to the average of the three lowest closing bid prices of Sula in the period following the issue of the subscription notice provided the relevant pricing period, as set by the Company, is between three and 15 days. Sula is able to specify in each subscription notice a minimum price below which Ordinary Shares will not be issued to Darwin. The Company will have the right (with the consent of Darwin) to modify that minimum price at any time during the relevant pricing period. The number of Ordinary Shares which may be issued under any individual subscription notice may be up to the lower of 25 per cent of the Company's issued share capital following completion of the relevant subscription, or four times the average daily trading volume of Sula's Ordinary Shares over the 15 trading days preceding the issue of the relevant subscription notice. This may be reduced in certain circumstances, including where the minimum price is not maintained. The maximum amount of an individual subscription notice may not exceed 500,000 without Darwin's permission. Darwin is entitled to a commission of up to 5 per cent of amounts subscribed but may agree with Sula in lieu thereof for the subscription price for the Ordinary Shares to be discounted by 5 per cent. There is also an over-allotment facility available to Sula, under which the Company may authorise Darwin, at Darwin's discretion, to increase the amount of the draw down by up to the aggregate undrawn amount under the EFF. Darwin and Sula may mutually agree at the end of the pricing period to a variation of subscription price. This may allow for a larger subscription via any over-allotment facility authorised by the Company. The issuance of a subscription notice is conditional upon the satisfaction of certain subscription notice conditions which have been agreed between Darwin and Sula. Any subscription notice which Sula may issue will only be valid to the extent that it has the requisite shareholder authority to issue the maximum number of Ordinary Shares that Darwin may be required to subscribe under the relevant subscription notice. Darwin and Sula may terminate the EFF agreement if certain conditions are not met. In conjunction with the EFF, Sula has entered into a warrant agreement with Darwin dated 12 August 2014, pursuant to which Darwim may subscribe for up to 1,700,000 Ordinary Shares in Sula. 850,000 of such warrants are exercisable immediately at 3.0p at any time prior to the expiry of 60 months from the date of the warrant agreement, with the remaining 850,000 warrants being exercisable pro-rata to subscription monies receieved against the 2.0 million facility. They will be priced at a 25% premium to the subscription price the Company receives. Commenting, Nick Warrell, Chief Executive of Sula, said: "The EFF with Darwin strengthens our existing financing position and provides a highly flexible and cost effective source of capital that we are able to access should we require it in the future. One of the key benefits of this facility is that we remain at all times in complete control over the pricing and timing of any issue of equity as it can only be used at our discretion. We have no present intention of using the EFF as we have a strong cash balance sufficient for the foreseeable future. However, it does provide us with additional fundraising options. We are anticipating strong news flow over the coming months, especially with the publication of a JORC compliant mineral resource estimate on both the DSO and fresh magnetite within our licence. We look forward to updating shareholders in due course." For further information please visit www.sulaironandgold.comor contact the following: Nick Warrell / Matt Wood Sula Iron & Gold plc +44 (0) 20 7583 8304 James Caithie / Avi Robinson Cairn Financial Advisers +44 (0) 20 7148 7900 LLP Martin Lampshire Daniel Stewart & Company +44 (0) 20 7776 6550 Plc Dominic Barretto / Kelsey Yellow Jersey PR +44 (0)7768 537 739 Traynor Anand Sambasivan / Jamie Darwin Strategic +44 (0) 20 7491 6512 Vickers 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 Ferensola project in Northern Sierra Leone, which is highly prospective for iron and gold. Sula is currently focused on delineating two maiden JORC compliant iron ore resource estimates and evaluating the gold prospectivity. The 153 sq. km licence area is contiguous to African Minerals' operational Tonkolili Iron Mine, which has a JORC compliant resource of 12.8 billion tonnes iron mineralisation. Exploration work at Ferensola has confirmed the presence of BIF at surface, which has a known strike length of 3.1km. The BIF is proven to extend NE from the Tonkolili licence and into Sula's licence area. To date, the Company has carried out almost 9,000m of drilling over a 2.8km section of the BIF. Significant Greenstone Belt-style gold mineralisation has also been identified at various prospects within the licence area. Five target areas for hard rock gold mineralisation have been identified based on the location of historic drill intercepts, the source areas for alluvial gold deposits, and the position of major structures as defined by airborne magnetic data and drainage orientation.

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Source: PR Newswire (UK Disclosure)

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