Exploration Update

SULA IRON & GOLD PLC - Exploration Update

PR Newswire

London, January 17

Sula Iron & Gold plc / Index: AIM / Epic: SULA / Sector: Natural Resources

18 January 2013

Exploration Update - Iron and Gold Licence Area in Sierra Leone

Sula Iron & Gold plc, an iron ore and gold exploration company focussed onSierra Leone, is pleased to announce an exploration update at its 153 sq kmiron ore and gold licence area (`the Project') in Sierra Leone, which iscontiguous to African Minerals' operational Tonkolili iron mine which hosts a12.8 billion tonne resource.

Gold

Sula's Chief Executive Nick Warrell said: "Detailed mapping and reconnaissancework at our flagship iron and gold project in Sierra Leone has returned highlypositive results, which confirm outcropping banded iron formation over a 3.1kmstrike, and advances the project to a drill ready status. From here we plan toimplement a 2,000 metre drilling programme and are due to sign a drill contractshortly to commence work. The drilling work will further test the strikecontinuity, thickness and DSO grade potential of the Project and it is ourintention to delineate a JORC compliant resource in terms of the iron at theProject in 2013. In addition, we are highly excited by the gold prospectivityof the Dalakuru and Lagunda target areas having analysed past drilling datawhere results returned best intersections of 8.72m @ 10.46 g/t gold. We lookforward to commencing further work over these two target areas including aground magnetic survey and follow-up geochemical sampling and will report onthese developments in due course."

Further Information

The Project is located in the northern part of the Sula-Kangari greenstone beltin Sierra Leone, and is contiguous to African Minerals' operational Tonkoliliiron mine which hosts a 12.8 billion tonne resource. The Sula-Kangarigreenstone belt is also host to AIM quoted Amara Mining's (previously namedCluff Gold Plc) 2.91 Moz Baomahun greenstone-style gold deposit, and theProject is considered prospective for similar styles of iron and goldmineralisation to Tonkolili and Baomahun respectively.

Iron Exploration

Area 1 is a priority iron target, located in the south-western part of theProject area and directly along strike from an undrilled magnetic high withinthe Tonkolili licence. The target comprises a 2.7 km long, northeast trending,linear magnetic high. Recent detailed mapping and reconnaissance work has beenundertaken by the Company at Area 1 and has defined BIF outcrop and Banded IronFormation (`BIF') fragments in duricrust over a strike length of 3.1 kmcoincident with this magnetic high.

A 2,000 metre diamond drill programme has now been designed to test the strikecontinuity, thickness and iron grade of BIF at Area 1, with the ultimate aim oftesting the potential for an iron deposit in excess of 0.5 Bt. The drillingprogramme will comprise eight drill collars spaced 320 metres apart over astrike length of 2.2 km. Each hole will be drilled at an azimuth of 140˚ and adip of 50˚, to a downhole depth of 250 metres.

Following this first phase of diamond drilling, shallow vertical holes arerequired to test the potential for direct shipping ore (DSO) +60% grade ironmineralisation.

Initial field mapping has indicated that BIF outcrops are variably oxidised tohigher grade haematite mineralisation. Such supergene processes are responsiblefor the formation of the higher grade DSO ores. The Company look forward toreporting on its iron focussed drilling programme over Area 1 in due course.

Gold Exploration

Artisanal miners have exploited placer gold within the Project area for morethan 60 years, and active workings are observed in at least five separateareas. Gold mineralisation observed at the Project is associated withquartz-sulphide, greenstone-style veins, lenses and breccias. This style ofmineralisation is very common in West African greenstone belts and isrecognised elsewhere in greenstone belts of Sierra Leone. Greenstone-styledeposits are typically located on or proximal to regional scale, deep seatedfaults and lineaments. Mineralisation occurs in shoots and lenses on second andthird order structures at low angles to the main structure, and is associatedwith quartz sulphide mineralisation and disseminated to massive sulphide.

Following reconnaissance work completed in December 2012, which included fieldwork, re-logging of historic drill core and data review, the Dalakuru andLagunda target areas are considered the most prospective for hard rock goldmineralisation.

Additionally, previous operators on the Project completed 3,406 metres of RABdrilling and 5,392 metres of diamond drilling at three prospects consideredprospective for gold. Nineteen diamond drill holes totalling 3,402 metres werecompleted at Dalakuru and intercepted significant quartz-sulphide breccias inthree holes:

Mineralisation at the Dalakuru target area comprises steeply dippingquartz-sulphide breccias hosted in amphibolite. As there is no outcrop, and nomore than one hole intercepted each mineralised structure, the dip and strikedirection of the structure is not known.

Historic drilling at Dalakuru did not adequately test the mineralised system.Therefore, despite the historic drilling at the Project gold mineralisation isopen in all directions, and further work to include re-logging and sampling ofdrill core and ground magnetic surveys are required to explore the sizepotential and morphology of Dalakuru.

The Lagunda prospect comprises a large, active, artisanal alluvial gold fieldstriking northeast over at least 2 km. The alluvial gold field is coincidentwith and parallel to the contact between a magnetic high and magnetic lowidentified from regional airborne magnetic data. This magnetic signature isconsidered significant as it potentially represents a fault zone orlithological contact, which act as conduits for hydrothermal fluids and areexcellent traps for gold mineralisation in greenstone-style environments.

Lagunda is considered an attractive exploration target for greenstone-stylemineralisation and further work including a ground magnetic survey andfollow-up geochemical sampling is planned.

The information in this announcement has been reviewed by Dr ChristopherWilson, Technical Director of Sula, a Chartered Professional Geologist with 24years' experience, a Qualified Person (NI43-101 and JORC), Fellow of theAustralian Institute of Mining and Metallurgy and a Fellow of the Society ofEconomic Geologists.

Felicity Edwards/ Charlotte St Brides Media and Finance +44 (0) 20 7236 1177Heap