IRON AND GOLD EXPLORATION IN SIERRA LEONE Sula Iron and Gold Plc SULA IRON & GOLD PLC CORPORATE PRESENTATION JANUARY 2014
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OVERVIEW 153 sq km Ferensola Project ( Ferensola or the Project ) prospective for iron and gold located in the Sula-Kangari Greenstone Belt, Sierra Leone Project is contiguous to African Minerals operational Tonkolili Iron Ore Mine, which has a JORC compliant iron resource of 12.8 billion tonnes iron ( Fe ) Defined dual development programmes in place with the aim to delineate a JORC compliant iron resource Conservative Exploration Target of 500Mt at 55% iron in haematite and 30.4% iron in magnetite, given by mining consultants SRK Exploration Services Gold prospectivity highlighted by extensive artisanal mining - identified five target areas. Recently completed exploration included detailed ground magnetic and soil sampling results will identify future drill targets STRUCTURE Sula Iron & Gold Plc Blue Horizon (SL) Ltd 100% owned subsidiary Historical drilling concludes 9.03m at 6.63 g/t gold ( Au ) and 8.72m at 10.46 g/t Au Experienced board and management team with in depth knowledge of Sierra Leone and a proven track record in developing African resource projects Licence EL54/2011 (Ferensola Project) Granted 24 Aug 2011 Four year - renewable 3
KEY DATA Market AIM EPIC SULA Share Price 4.1p (13.01.14) Market Capitalisation 7.18 million Shares in Issue 170.6 million Nominated Advisor Cairn Financial Advisers LLP Broker Daniel Stewart & Company Plc Major Shareholders Number % Nick Warrell, CEO 47,503,677 27.8 Brian Moritz 12,225,161 7.2 59,728,838 35.0 4
THE BOARD Nick Warrell Chief Executive Matt Wood Non-Executive Director Andrew Dacey Non-Executive Technical Director Nick is the founder of Sula Iron and Gold plc. He has headed up various exploration projects worldwide, including the UK, Australia, South America, and West Africa. In his 36 year commercial career, he established Kernow Tunnelling Company, a specialist hard rock tunnelling company which successfully operated in the UK for 14 years. Nick opened, and operated, the Wheal Concord tin mine in Cornwall for three years which he later sold. He also managed and subsequently owned and sold the Gwynfynydd Gold Mine in North Wales. In Sierra Leone, where he has spent 24 years, he discovered gold and platinum deposits and founded Golden Prospect Mining, which floated on AIM and was later sold. Following this Nick founded Lion Mining Company Limited, which he operated for three years and successfully sold. Nick is an Honorary Paramount Chief of Diang Chiefdom who control the concession area. Matt is a qualified chartered accountant who has a broad range of managerial skills, gained during a career spanning more than 15 years in the financial sector. He is the Managing Director and one of the founders of CMS Advisory Group, a City-based multi-disciplined advisory firm founded in 2006, which provides a full suite of plc services to growth companies, utilising the small cap expertise of its staff in the areas of corporate finance, corporate law, management accounts and company secretarial. Prior to this Matt worked as a Nomad in the corporate finance department of Beeson Gregory (which became Evolution Securities and was later sold to Investec), advising both AIM and Full List companies on a wide range of transactions including IPOs, secondary fundraisings, mergers and acquisitions and corporate restructurings. Matt is an experienced Non-Executive Director and is currently a Director of Westminster Group Plc and Avarae Global Coins Plc, where he sits on both their audit and remuneration committees. Andrew is an experienced geologist and mining analyst with over 18 years experience in the mining sector and is a Partner at Momentum Advisors (UK) LLP, a management consultancy focused on the natural resource sectors. Mr Dacey has worked throughout the world for numerous junior resource companies; in 2002 he discovered the Golden Hills 3.3Moz Au-equivalent project in Mongolia and in 2005 he co-founded Lydian International (TSX:LYD). He graduated with a degree in Geology from Victoria University, New Zealand and completed a Masters of Economic Geology at CODES, Tasmania, Australia. He is a Fellow of the IOM3, a Registered Professional Geologist and on the committee of the Association of Mining Analysts. 5
FERENSOLA PROJECT LICENCE EL54/2011 Renewable four year 153 sq km Exploration Licence, highly prospective for both iron ore and gold Located in the Northern Province of Sierra Leone, 55km south of the nearest town, Kabala, and 290km north east of the capital Freetown Good infrastructure - access from Freetown via a tarred road followed by 80km on bush roads Exploration camp located centrally, comprising of core logging shed, accommodation buildings, an office block, mechanical engineering workshops, stores, kitchen and dining facilities, and ablution blocks Sierra Leone has stable democracy and abundant natural resources, including diamonds, gold, bauxite, iron & mineral sands, with geology dominated by Archean age terrain compromising granite-greenstone material Licence location within Sierra Leone 6
Concession area outlined in black Geology of the Sula-Kangari Greenstone Belt IRON AND GOLD EXPLORATION IN SIERRA LEONE PROSPECTIVE LOCATION FERENSOLA FERENSOLA TONKOLILI BAOMAHUN TONKOLILI MARAMPA OPERATORS IN THE REGION INCLUDE: African Minerals Limited (12.8 billion tonne Tonkolili iron ore mine)* Vatra Group of Companies* Polo Resources Limited (Nimini-Komahun Gold Project) Dimas Resources Ltd* London Mining Plc (Marampa gold mine probable 539Mt at 31.1% Fe JORC reserve) Transcend International Resources Ltd* Amara Mining plc (2.78 Moz Baomahun gold project) * contiguous to licence 7
IRON ORE 8
IRON ORE MINERALISATION Mining consultants SRK ES conclude that a conservative exploration target in terms of a magnetite BIF is in the region of 500 million tonnes at 30.4% iron in magnetite and 55% iron in haematite Detailed mapping and reconnaissance work at the Project completed in January 2013 confirmed presence of BIF at surface over a strike length of 3.1km and considered drill-ready BIF occurrences located at Area 1 in the south-west of the licence area orebody extends NE from African Mineral s 12.8 billion tonne Tonkolili iron mine Interpretation of high resolution satellite imagery and detailed mapping of the outcropping BIF mineralisation, has led to better understanding of near surface direct shipping ore ( DSO ) 2,000 metre diamond drilling programme completed July 2013 to test the strike continuity, thickness and iron grade of BIF results confirm presence of iron mineralisation with comparable grades to African Mineral s Tonkolili Project; best intersections of 12.28m at 57.10% Fe and 73.18m at 43.66% Fe Aim to produce a maiden JORC compliant resource in 2014 further infill drilling planned in Q1 2014 9
TONKOLILI LICENCE AFRICAN MINERALS LIMITED Producing mine with JORC Compliant Mineral Resource estimate of 12.8 billion tonnes of iron ore Integrated mine, rail and port infrastructure in place - first product shipment Nov 2011 Five contiguous orebodies comprising over 21 km of strike length and depths in excess of 700m Northernmost orebodies, Kasafoni West and Kasafoni East, have combined strike length of 12km and thickness of up to 200m Reported resources of 4.3 billion tonnes of ore (2.9Bt Inferred and 1.4Bt Indicated, with average FE content of 30.4%) Exports totalled 12.1Mt during 2013, with 3.8Mt exported in Q4 2013 African Minerals remains confident of achieving the 20Mtpa sustainable run rate 10
FERENSOLA IRON EXPLORATION 2,000m diamond drilling programme completed in July 2013 over a 2.2km of a 3.1km section of the BIF located in Area 1 located in the southwest part of the Licence and directly along strike from a magnetic anomaly within African Minerals Limited s 12.8 billion tonne Tonkolili Licence Drill programme tested the strike continuity, thickness and iron grade of the main BIF target Results confirm the presence of consistently high grade iron mineralisation, with best intersections of 12.28m at 57.10% Fe and 73.18m at 43.66% Fe Plan to conduct further infill drilling in Q1 2014 to delineate a JORC compliant resource on both the direct shipping ore (`DSO') and magnetite Map of drill hole locations Cross section for drill holes 3-4 11
IRON VALUATION A review of comparable iron ore companies in Central and West Africa indicates that they trade at an average of US$0.30 per tonne of contained iron Important factors which influence the $/t ratios include the presence of infrastructure and haematite DSO The Ferensola Project is located within 25kms of African Mineral s Tonkolili rail terminus and recent Sula drilling has intersected haematite mineralisation A conservative target resource of 500Mt has been given by SRK ES consultants Company Location Phase Attributable Contained Iron EV ($m) EV/ Total Iron ($/t Fe) Type of Mineralisation Infrastructure & Distance to Port Afferro Mining Cameroon PFS 729,780,570 198.7 0.27 Mag ± Hem 330km from coast, no rail or port African Minerals Sierra Leone Production 2,987,132,850 2,822.9 0.95 Mag ± Hem Existing rail and port facilities Bellzone Minerals Guinea Construction 1,470,061,202 33.9 0.02 Mag ± Hem 200km from port, no rail link Equatorial Resources Rep of Congo Exploration 260,018,100 60.3 0.23 Mag ± Hem Proximal to rail, existing port Sundance Resources Cameroon BFS 1,721,380,140 329.5 0.19 Itb ± Hem 510km from coast, no rail or port Zanaga Iron Ore Republic of Congo PFS 977,544,000 61.6 0.06 Mag ± Hem 350km from port, no rail link Afferro Mining demonstrates the potential value of the Sula licence if a 0.5Bt at a grade of 30.4% resource were proven HB Markets 12
IRON ACTIVITY SRK ES geologist examining and logging the drill cores from the BIF in the core logging building at Dalakuru Camp Drill core Rig drilling BIF 13
GOLD 14
GOLD MINERALISATION Areas prospective for gold are situated within the highly prospective Sula-Kangari Greenstone Belt rocks (belt hosts Amara Mining Plc s 2.78Moz Au Baomahun deposit) Structures within the Licence area display a strong northeastsouthwest trend typical of the gold-mineralised Greenstone Belt throughout West Africa Five target areas for hard rock gold mineralisation identified The Dalakuru, Lagunda and Yanfarina prospects are high priority targets Historic drilling intercepted hard rock gold mineralisation that is open in all directions at the Dalakuru prospect. Historic diamond drilling intercepted: 2.00m @ 8.76g/t gold (83.14 to 85.10m, SDD004) 8.72m @ 10.46g/t gold (89.40 to 98.10m, SDD004) 1.55m @ 11.68g/t gold (171.00 to 173.00m, SDD016) 9.03m @ 6.63g/t gold (161.37 to 170.00m, SDD033) Initial fieldwork completed in January 2014 to define robust drill targets at Lagunda and Yanfarina prospects including 15 sq km geophysical and geochemical soil programme, 150 line km of ground magnetic surveying and 6,300 soil samples Final results from 2013-2014 field work expected end of Q1 2014 results will identify future drill targets 15
GOLD ACTIVITY Large mineralised Gold Stone Haematite showing alteration into limonite via geothite Lagunda artisanal mining site Mining Camp Artisanal workings on the Nyanfaran Tembe River 16
INVESTMENT CASE 17
EXPLORATION MILESTONES Feb 2013 April 2013 July-Sep 2013 Nov 2013 January 2014 Q1 2014 Q1 2014 Q4 2014 Channel sampling confirmed presence of high-grade iron mineralisation 2,000 drill programme commences to target BIF Complete drill programme results confirm consistently high grade iron mineralisation Commence initial gold exploration programme to target primary gold mineralisation Completion of initial gold exploration programme Results expected from initial gold exploration programme Commence drilling targeting iron mineralisation Maiden JORC iron resource expected 18
INVESTMENT CASE Defined exploration programme to estimate maiden JORC compliant iron resource in 2014 Strategic licence contiguous to 12.8 billion tonne iron ore Tonkolili operational mine Experienced Board and management team Conservative Iron exploration target of 500 million tonnes @ Fe content in excess of 30% In-depth knowledge of Sierra Leone and strong local support Solid infrastructure in place to support development Multiple prospects identified that host gold mineralisation Uplift potential through strategic Joint Venture opportunities Dual commodity exposure iron ore and gold in a known, mineral-rich region 19
CONTACT Matt Wood Non-Exec Director T: +44 20 7583 8304 Nick Warrell CEO Sula Iron & Gold plc 190 High Street Tonbridge Kent TN9 1BE T: +44 7811 447830 Andrew Dacey Non-Exec Technical Director T: +44 20 7583 8304 20
APPENDIX 21
APPENDIX 1: MAGNETOMETER SURVEY Geophysical survey effectively identifies the Banded Iron Formation (BIF) in Licence EL54/2011: Main BIF s magnetic anomaly striking in a north-easterly direction from the SW licence boundary for a distance of 2.8 km (labelled 1 ) Additional smaller anomalies appear to be offset from the main trend ( 2-4 ) Other small anomalies are interpreted to be concentrations of magnetic material within the alluvial system (white dashed regions), due to their location and signature in other analytical processing techniques 22
APPENDIX 2: 2,000M DIAMOND DRILLING RESULTS SELECTION OF BEST INTERSECTIONS HOLE_ID FROM TO INTERVAL TRUE Fe P SiO2 Al2O3 Comment (m) (m) (m) WIDTH* (%)* (%) (%) (%) (m) BHDD001 0.00 84.50 84.50 73.18 43.66 0.06 12.40 14.48 Oxidised BIF BHDD001 129.60 163.30 33.70 29.19 32.09 0.04 42.53 3.68 BIF BHDD002 75.75 92.60 16.85 14.59 40.30 0.09 22.15 10.33 BIF BHDD002 98.40 213.65 115.25 99.81 31.17 0.04 43.04 3.40 BIF with Amphibolite BHDD003 22.65 40.65 18.00 12.28 57.10 0.09 3.22 6.95 Oxidised BIF BHDD003 48.15 57.15 9.00 6.14 55.67 0.17 9.39 2.21 Oxidised BIF BHDD003 57.15 102.55 45.40 30.96 38.89 0.04 34.94 4.13 BIF BHDD004 88.65 120.17 31.52 27.30 35.97 0.05 40.95 2.81 BIF BHDD004 150.10 168.50 18.40 15.93 37.43 0.04 39.28 1.22 BIF BHDD004 176.80 199.75 22.95 19.88 34.82 0.04 41.69 2.51 BIF BHDD005 49.00 62.10 13.10 11.10 54.41 0.08 8.14 6.36 Oxidised BIF Zone BHDD006 51.65 132.95 81.30 69.70 37.28 0.06 32.66 6.13 BIF BHDD006 208.75 225.00 16.25 13.29 36.70 0.04 40.23 1.11 BIF BHDD007 11.00 45.30 34.30 29.70 52.25 0.07 4.75 10.72 BIF BHDD007 48.95 65.80 16.85 14.59 55.54 0.07 8.13 4.18 BIF BHDD008 25.30 39.00 13.70 1.86 42.08 0.15 15.48 13.48 BIF BHDD009 0.00 50.50 50.50 43.73 33.89 0.05 1.04 8.83 Oxidised BIF 23