14th Oct 2015 09:07
LONDON (Alliance News) - Sula Iron & Gold PLC shares plummeted Wednesday after conditionally raising GBP500,000 from a large, discounted placing to allow it to conduct a detailed drilling programme ahead of a potential deal with "one of the world's largest gold producers".
The miner said it has issued over 166.6 million new shares at 0.3p per share, and said for every two placing shares issued it will also issue a warrant for one further new share at an exercise price of 0.6p per share.
Sula shares opened at 0.5p per share, meaning the placing price was priced at a large discount. On Wednesday morning, Sula shares were down 31% to 0.347p.
The proceeds will be used to carry out an extended drilling programme on the company's Ferensola gold project in Sierra Leone.
Sula said it has received preliminary expressions of interest from several gold companies regarding the development of the company's gold assets. Since then, it has signed a non-disclosure agreement with "one of the largest international gold producers", which will visit Feresnola in November to evaluate the drilling programme.
"There can be no guarantee that discussions with such interested parties will result in any form of arrangement or agreement with regard to the company's Ferensola gold project," it said.
"The directors believe that any interested party will expect to view the results of a more detailed, extended drill programme. Having consulted with both its financial advisers and its geological consultants, the directors therefore believe that it is in the company's best interests to raise these additional funds now in order to extend the drill programme in as cost effective a manner as possible," said Sula.
By Joshua Warner; [email protected]; @JoshAlliance
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