Maiden Mineral Resource Estimate Declared at Ferensola

16 December 2014 Sula Iron & Gold plc ("Sula" or the "Company") MAIDEN MINERAL RESOURCE ESTIMATE DECLARED AT FERENSOLA Total oxide resource of 55.5Mt @45.39% Fe represents easily accessible mineralisation with a total resource of 514.5Mt @ 31.8% Fe Deep exploration target outlined by SRK suggests further resource base Sula Iron & Gold plc, the exploration and development company focused on ironore, gold and coltan in Sierra Leone, is pleased to announce a Maiden JORCCompliant Mineral Resource Estimate at its 100% owned Ferensola iron oreproject in Sierra Leone ("Ferensola"). Highlights: * Five distinct iron mineralised units, consisting of unique material zones based upon characteristics and iron grades, have been identified at Ferensola. Total JORC compliant Mineral Resources for each of the given separate zones are: + Oxidised, laterite Cap : 8.3Mt @ 42.95% Fe; + Oxidised, high grade: 7.4Mt @ 56.71% Fe; + Oxidised, Saprolite: 8.1Mt @ 39.01% Fe; + Oxidised, Upper Saprolite: 31.7Mt @ 45.02% Fe; and + Fresh Magnetite ore: 459Mt @ 30.2% Fe. * Total oxidised resource of 55.5Mt @ 45.39% Fe over the full 2.8km strike of BIF1; * Total Indicated mineral resource of 17.6Mt @ 45.6% Fe. * Total Inferred mineral resource of 496.9Mt @ 31.3% Fe. * Mineral Resource Estimate prepared by SRK who have in addition identified an exploration target comprising an additional 100Mt to 250Mt, with a grade range of between 20% Fe and 35% Fe that lies below the optimised pit shell. NB. The Mineral Resource quoted above occurs entirely within thelicenseboundary and within an optimised pit shell though the pit shell itselfwas not constrained by licenseboundary limitations. Commenting on today's landmark news, Nick Warrell CEO of Sula, said: "We are very pleased to update our shareholders and the market with our MineralResource Statement.Back in 2013 we set ourselves the target of identifying a500Mt iron ore resource and today'sresults reflectthe past two yearworkprogramme. The total oxidised resource of 55.5Mt @45.39% Fe represents easilyaccessible mineralisation at surface. This, coupled with exceeding the SRK ESExploration Target of 500Mt, is pleasing. "Furthermore, the deep exploration target of 100-250Mt at BIF1 outlined by SRKsuggests that we can add further to the resource base." To view a full version of the announcement, including figures and maps, pleasevisit the Company's website at: www.sulaironandgold.com. Sula Iron & Gold plc +44 (0) 20 7583 8304Nick Warrell / Matt Wood Cairn Financial Advisers LLP (Nominated Adviser) +44 (0) 20 7148 7900James Caithie / Avi Robinson VSA Capital Limited (Broker) +44 (0) 20 3617 5177Bhavesh Patel / Richard Buckle Strand Hanson (Financial Adviser) +44 (0) 20 7409 3494Simon Raggett / James Harris Yellow Jersey PR (Financial PR) +44 (0) 7768 537 739Dominic Barretto / Kelsey Traynor Project Background The Ferensola License area lies largely within the rugged greenstone belt ofthe southern Sula Mountain Range, approximately 20 km northeast of the town ofBumbuna. Ferensola is an exploration project comprising a BIF with asupergene-enriched oxide cap. Ferensola is thought to be a northerly extensionof the Kasafoni deposit, which is part of the Tonkolili Iron Ore Project, ownedby African Minerals Ltd, which lies directly to the south and adjacent to theFerensola licence. Mineral Resource Estimation This Mineral Resource Estimate ("MRE") has been prepared by SRK Consulting (UK)Ltd ("SRK") following the guidelines of the Australasian Code for Reporting ofExploration Results, Mineral Resources and Ore Reserves 2012 Edition ("the JORCCode"). The definitions of Measured, Indicated and Inferred Mineral Resources as usedin the report, are as defined in the JORC code prepared by the Joint OreReserves Committee of the Australasian Institute of Mining and Metallurgy,Australian Institute of Geoscientists and Minerals Council of Australia("JORC"). SRK has conducted a site visit to the Ferensola Project during the course ofthe drilling campaigns undertaken by Sula. The site visit was undertaken by MrColin Rawbone, Senior Geologist with SRK, who is a Competent Person andChartered Professional Member of the AusIMM (Membership ID:313771). During thesite visit, Mr Rawbone undertook an associated review of all on site proceduresand protocols. The Mineral Resource Statement ("MRS") generated by SRK has been restricted toall classified material falling within the license area and within an optimisedpit shell representing a metal price of USD150c/dmtu for magnetite and sinterfines concentrate (The metal price selected is based upon SRK's internalconsensus market forecast data). The different ore-types have been reportedbased on various material specific marginal cut-off grades which have beenderived by SRK as a result of metallurgical test work undertaken. Thisrepresents the material which SRK considers has reasonable prospect foreventual economic extraction based on the above pit optimisation and processingrecovery analysis. The MRS for Ferensola is shown in Table 1. The pit outline used to report the final MRS has not been restricted to thelicense boundary i.e. the projected pit edge extends into the adjacent licenseand mining would need to occur in this in order to exploit the Mineral Resourcereported. For clarity therefore, SRK has also derived a pit outline that occursentirely within the Ferensola license and does not encroach onto the adjacentlicense. If the company is only able to mine material falling within this pitthen this would exclude 72.3 Mt of the reported Mineral Resource, of which71.7 Mt% (99%) is from the magnetite BIF, 0.5 Mt is from domain 100 and 0.1 Mtis from domain 130 even though this does occur within the license boundary. Table 1: Mineral Resource Statementfor Ferensola Domain CoG Resource Tonnes Fe % SiO2 Al2O3 P % Category (Mt) % % Oxidised, Laterite 17% Measured Cap Indicated 1.8 39.9 3.89 22.59 0.07 Meas. + Ind. 1.8 39.9 3.89 22.59 0.07 Inferred 6.5 43.8 2.62 20.00 0.07 Oxidised High Grade 5% Measured Indicated 3.3 56.6 5.77 5.66 0.07 Meas. + Ind. 3.3 56.6 5.77 5.66 0.07 Inferred 4.1 56.8 5.30 5.17 0.07 Oxidised Saprolite 17% Measured Indicated 4.9 38.3 35.19 3.75 0.05 Meas. + Ind. 4.9 38.3 35.19 3.75 0.05 Inferred 3.2 40.1 33.44 3.21 0.06 Oxidised Upper 13% Measured Saprolite Indicated 7.6 47.0 9.86 12.34 0.08 Meas. + Ind. 7.6 47.0 9.86 12.34 0.08 Inferred 24.1 44.4 13.74 12.39 0.08 Fresh Magnetite BIF 7% Measured Indicated Meas. + Ind. Inferred 459.0 30.2 44.29 4.71 0.04 TOTAL Measured Indicated 17.6 45.6 15.60 9.72 0.07 Meas. + 17.6 45.6 15.60 9.72 0.07 Ind. Inferred 496.9 31.3 41.88 5.27 0.05 Notes: (1) Mineral Resources which are not Mineral Reserves have no demonstratedeconomic viability (2) The effective date of the Mineral Resource is 12December 2014 (3) The Mineral Resource Estimate for Ferensola was constrained withinlithological and grade based solids and within a Lerchs-Grossman optimised pitshell defined by the following assumptions; metal price of US150c/dmtubased onSRK's internal consensus market forecast data; slope angles of 43º in the oxidezones and 50º in the fresh material, depending on respective location; a miningrecovery of 97.0%; a mining dilution of 3.0%; a base case mining cost ofUSD1.50/t and an incremental mine operating costs of USD0.03/t/12 m below the670 m reference RL and USD0.03/t/12 m above the 670 m reference RL; processoperating costs of USD2.50/t crushed DSO and high grade saprolite, all othersaprolite crushed USD4.00/t and USD5.50/t crushed BIF; Fe recovery of 30% forthe Laterite cap, 100% for the High Grade oxide, 30% for Saprolite, 40% for theupper saprolite and 80% for the fresh MagnetiteBIF. (4) Mineral Resources at Ferensola have been classified according to the JORCcode by Howard Baker (FAusIMM(CP)), an independent Competent Person asrecognised by JORC. The Competent Person responsible for this Mineral Resource Statement is MrHoward Baker (FAusIMM(CP)). Mr Baker is a CP as defined by the JORC Code and aPrincipal Resource Geologist with SRK who is a Chartered Professional Fellow ofthe AusIMM (Membership ID: 224239). Sula and SRK are not aware of any additional factors (environmental, legal,title, taxation, socio-economic, marketing, political, or other relevantfactors) that could have material impacts on the Mineral Resource Estimate. The quantity and grade of reported Inferred Mineral Resources in thisestimation are uncertain in nature and there has been insufficient explorationto further define these as Indicated or Measured Mineral Resource respectively;and it is uncertain if further exploration will result in upgrading them to anIndicated or Measured Mineral Resource category. Ferensola Exploration Target SRK recognises that there is potential to increase the Mineral Resource atFerensola through deep drilling that targets material that falls beneath thebase of the optimised pit shell where the deposit remains open at depth. Thismaterial may be considered by SRK to be potentially economic, should sufficientexploration data be collected that confirms the geometry and continuation ofthe mineralisation. SRK has identified an Exploration Target comprising anadditional 100 to 250 Mt, with a grade range of 29 and 35% Fe that lies belowthe optimised pit shell used for constraining the Mineral Resource reportedabove. SRK notes that the Exploration Target is conceptual in nature, thatthere has been insufficient exploration to estimate a Mineral Resource in thisarea and that it is uncertain if further exploration will result in theestimation of a Mineral Resource in this area. In addition, SRK recognises the potential for further conversion from theInferred category to the Indicated and or Measured categories following furtherexploration. Database Validation The QA/QC programme for Ferensola consists of alternating the insertion of ablank, standard and duplicate sample on a regular basis within the samplesequence. The Company uses standards with varying grades representative of thedeposit which are also alternated. All samples have been prepared at the ALSlaboratory in Monrovia, Liberia and assayed at the accredited analyticalfacility in County Galway, Ireland. SRK found that the results of the abovedescribed QA/QC programme indicate that Ferensola's assay databases wereappropriate for mineral resource estimation. Data Verification Mr Colin Rawbone and Mr Howard Baker as the Competent Person's completed theverification of data on which the MRE is based. This verification included anassessment of QA/QC data, sample preparation and assay methodologies, densitydata, data inputs and survey data used in the estimate. Data was validated byusing field checks, statistical methods and evaluating the Company's protocols. MRE Drilling A 3D geological model based on a total of 85 diamond drill holes for 8,873 mhas been used to develop the model used in the MRE. This includes 3,863 raw Feassays from project inception up to the cut-off date of September 2014. Ferensola Deposit Characteristics Ferensola covers a 2.8 km portion of a larger 20 km strike length magneticanomaly extending SW from the license area. The target forms a BIF with anoxidised cap of dominantly haematite / magnetite mineralisation. Capped by a ~10 m thick laterite, the oxide mineralisation consists of friableto weakly indurated haematite rich saprolite which has been subdivided intomultiple unique domains based principally on the relationships between Fe,Al2O3 and SiO2. The oxide material has been subjected to supergene enrichmentresulting in the progressive dissolution of SiO2 that increases with depth. Assuch, the general observed trend shows an increase in Fe grade moving up thesequence away from the base of oxidation which is accompanied by a decrease inthe SiO2 content within the oxide material. In addition to this sequence twounits of elevated/enriched material, characterised by low Al2O3 have beeninterpreted and are considered a reflection of a fluctuating water table. Fresh BIF mineralisation is modelled into five independent strike continuouspackages separated by intercalated metasediments. The BIF units are comprisedof laminated to bedded magnetite rich BIF horizons and, weakly foliatedaggregates of magnetite. Basement footwall mineralisation consists of coarsegrained mica bearing gneiss. The hanging wall is comprised of biotite andsericite rich intercalated meta-sediment. Geological Modelling, Resource Estimation Assumptions, Parameters and Methods SRK created a geological model based on the lithological logging, assay andmagnetic susceptibility data, enabling the hanging wall and footwall contactsof the BIF unit to be modelled and a three dimensional solid model to becreated. The oxide cap was modelled using statistical grade boundaries, themagnetic susceptibility data and Loss on Ignition values to determine the baseof oxidation. A 2 m composite file was used in a geostatistical study (variography andQuantitative Kriging Neighbourhood Analysis, "QKNA") that enabled OrdinaryKriging ("OK") to be used as the main grade interpolation method. Theinterpolation used an elliptical search based on the presence of primary fabricof the fresh to semi fresh units and following the predominant dip and dipdirection and topographic parallel elliptical searches in the highly weatheredoxide units. SRK also utilised Datamine's dynamic anisotropy function to honourslight changes in the overall dip and dip direction of the data. The results ofthe variography and the QKNA were utilised to determine the most appropriatesearch and estimation parameters. The interpolated block model was validated through visual checks and acomparison of the mean input composite and output model grades. SRK isconfident that the interpolated block grades are a reasonable reflection of theavailable sample data. Competent Persons The information in this press release that relates to the current drillingprogramme is based on information compiled by Mr Colin Rawbone, who is aChartered Professional Member of the Australasian Institute of Mining andMetallurgy ("AusIMM"). Mr Rawbone is a full time employee of SRK and hassufficient experience which is relevant to the style of mineralisation and typeof deposit under consideration and to the activity which he is undertaking toqualify as a Competent Person as defined in the 2012 Edition ofthe 'Australasian Code for Reporting of Exploration Results, Mineral Resourcesand Ore Reserves'. Mr Colin Rawbone has reviewed this press release andconsents to the inclusion in the press release of the matters based on hisinformation in the form and context in which this appears. In addition to the above, this press release has been compiled underthe direction of Mr Howard Baker, who is a Chartered Professional Fellow ofthe Australasian Institute of Mining and Metallurgy ("AusIMM"). Mr Baker is afull time employee of SRK Consulting (UK) Ltd and has sufficient experiencewhich is relevant to the style of mineralisation and type of deposit underconsideration and to the activity which he is undertaking to qualify as aCompetent Person as defined in the 2012 Edition of the 'Australasian Code forReporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Bakerhas reviewed this press release and consents to the inclusion in the pressrelease of the matters based on his information in the form and context inwhich this appears. Forward-looking Statements This announcement includes certain forward-looking statements. All statements,other than statements of historical fact, included herein are forward-lookingstatements that involve various known and unknown risks and uncertainties aswell as other factors. Such forward looking statements are subject to a numberof risks and uncertainties that may cause actual results or events to differmaterially from current expectations, including delays in obtaining or failureto obtain required regulatory approvals. There can be no assurance that suchstatements will prove to be accurate and actual results and future events coulddiffer materially from those anticipated in such statements. Notes: Sula Iron & Gold plc is a multi-commodity exploration company focused on WestAfrica. The Company's main objective is to explore and advance its Ferensolaproject in Northern Sierra Leone, which is highly prospective for iron andgold. The 153 sq. km license area is contiguous to African Minerals' TonkoliliIron Mine, which has a JORC resource of 12.8 billion tonnes ironmineralisation. Significant Greenstone Belt-style gold mineralisation has also been identifiedat various prospects within the license area. Five target areas for hard rockgold mineralisation have been identified based on the location of historicdrill intercepts, the source areas for alluvial gold deposits, and the positionof major structures as defined by airborne magnetic data and drainageorientation. The information in this release that relates to Exploration Results has beenreviewed by Mr Andrew Dacey, Non-Executive Technical Director of Sula Iron &Gold plc. Mr Dacey is a Fellow of the Institute of Materials Minerals andMining, a Registered Professional Geologist with the Australian Institute ofGeoscientists and a Competent Person as defined in the Australasian Code forReporting of exploration results and Mineral Resources and Ore Reserves. APPENDIX A. JORC CODE, 2012 Edition, Table 1 (Section 1 and 2) Section 1 Sampling Techniques and Data Logging Criteria JORC Code explanation Commentary Sampling * Nature and quality of Diamond core samples collected by Sulatechniques sampling (eg cut staff were of half HQ or NQ core, with channels, random the sample cut so as to equally divide chips, or specific structures. Sample lengths ranged from specialised industry 0.5 m to 2 m. Sample intervals were not standard measurement matched to geological boundaries. tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. * Include reference to Sula used a minimum sample size of 0.25 measures taken to kg per core sample dispatched. They ensure sample routinely submitted blanks, duplicate representivity and and certified reference material. the appropriate calibration of any measurement tools or systems used. * Aspects of the Diamond core samples were HQ diameter, determination of and were cut in half using a core saw, mineralisation that dividing geological structures equally are Material to the where possible. Some samples Public Report. demonstrated a significant variance when compared to duplicate samples, but this affect was observed to be minor, with most samples showing good repeatability. Sample preparation techniques were deemed to be of international best practice. * In cases where All sampling preparation has been `industry standard' undertaken by an accredited laboratory; work has been done preparation of samples has been this would be undertaken through ALS Monrovia and XRF relatively simple (eg analysis has been undertaken by ALS `reverse circulation based in Ireland. drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information. Drilling * Drill type (eg core, Drill methods were diamond drilling oftechniques reverse circulation, dominantly HQ core using standard tubes open-hole hammer, for the drill programmes undertaken. A rotary air blast, CS1000 man portable drill rig operated auger, Bangka, sonic, by a reputable company acting under etc) and details (eg industry best practices. core diameter, triple or standard tube, Core on vertical holes targeting oxide depth of diamond material has not been orientated. tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc). Drill sample * Method of recording Drill core recovery was recorded forrecovery and assessing core every hole through routine monitoring and chip sample of drill rod depth and recovered core. recoveries and Recoveries for each hole were results assessed. graphically plotted and show total recovery better than 85%. Where recovery has been recorded these intervals are identified and flagged for re-drilling as required. * Measures taken to Supervision of the diamond drilling by maximise sample Sula geologists ensured sample recovery recovery and ensure was good, and that samples were representative nature representative without contamination of the samples. issues. Where poor recovery has been encountered contractual agreements with the drill company incur penalties and re-drill policies. * Whether a No studies are known to have been relationship exists completed on sample bias. between sample recovery and grade and whether sample bias may have occurred due to preferential loss/ gain of fine/coarse material. Sub-sampling techniques and sample preparation * Whether core Geological logging for and chip diamond core includes a samples have descriptive log with been some quantitative geologically logging of mineralogy and and alteration, in geotechnically addition to plotting of logged to a assays and the geology level of as a graphic log. detail to support No geotechnical logging appropriate has been undertaken on Mineral oxide material due to Resource core fragmentation and estimation, lack of orientation. mining studies and metallurgical studies. * Whether Logging is qualitative, logging is with the exception of qualitative or some quantitative quantitative logging of mineralogical in nature. and alteration content. Core (or costean, Core photography is channel, etc) undertaken for both half photography. and whole core on a box by box basis. * The total 100% of diamond core length and samples can be percentage of correlated to graphic the relevant logs of the diamond intersections drill hole. logged. Quality of assay data and laboratory tests * If core, Drill core samples were whether cut or half HQ core, where the sawn and core was cut to equally whether divide significant quarter, half structures in the rock. or all core Half core is dispatched taken. for analytical process's * If non-core, All sampling relates to whether drill core riffled, tube sampled, rotary split, etc and whether sampled wet or dry. * For all sample Diamond core samples types, the have been analysed by nature, quality XRF for a full suite of and analytes including but appropriateness not limited to Fe_%, of the sample Al2O3_%, SiO2_% and preparation P_%. In addition to technique. this analysis the LOI was also recorded. * Quality control For diamond drill core procedures sampling, standards, adopted for all duplicates and blanks sub-sampling were interleaved stages to randomly with the maximise routine samples, every representivity 20th sample; targeting of samples. a frequency of 5% * Measures taken Field duplicates are to ensure that submitted as 1 in 20 the sampling is insertion rate, where representative duplicates are selected of the in situ the remaining half core material is split to produce a collected, field based quarter including for core sample for instance comparative studies. results for field duplicate /second-half sampling. * Whether sample Diamond core samples sizes are were half HQ core, appropriate to which is a large the grain size diameter core for of the material exploration drilling. being sampled. Verification of sampling and assaying * The nature, SRK deem the accredited quality and laboratory and the appropriateness requested analysis to of the assaying be suitable and and laboratory sufficient for this procedures used type and style of and whether the mineralisation deposit technique is considered partial or total. * For geophysical No geophysical tools tools, were employed, Magnetic spectrometers, susceptibility has been handheld XRF measured when drilling instruments, below the oxide cap t0o etc, the aid on site parameters used identification of the in determining target material. the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. * Nature of For diamond drill core quality control sampling, standards, procedures duplicates and blanks adopted (eg were interleaved standards, randomly with the blanks, routine samples, every duplicates, 20th sample; targeting external a frequency of 5%. laboratory checks) and Samples are reviewed on whether a batch by batch basis acceptable to identify any bias levels of with in the analytical accuracy (ie process. lack of bias) and precision have been established. Location of data points * The Mr Colin Rawbone of SRK verification has independently of verified the significant intersections derived intersections from lithological and by either grade logging. independent or alternative company personnel. * The use of No twinned holes have twinned been used to verify holes. sampling and assaying. * Documentation Data has been compiled of primary from good quality paper data, data plans and digitally entry compiled at a later procedures, date. data verification, The data has been data storage assimilated into the (physical and Company's Microsoft electronic) Excel database, after protocols. compilation and validation in Mapinfo Software. * Discuss any No adjustment to assay adjustment to data has been undertaken assay data. Data spacing and distribution * Accuracy and All drill collars are quality of positioned with handheld surveys used GPS to an accuracy of to locate within 5m. drill holes (collar and Down hole surveys are down-hole not utilised on shallow surveys), vertical drill holes but trenches, where required on mine workings inclined holes have been and other undertaken using REFLEX locations tools used in Mineral Resource estimation. * Specification WGS 84 UTM Zone 29 North of the grid system used. * Quality and An aerial survey to 0.5 adequacy of meter scale accuracy has topographic been undertaken control. Orientation of data in relation to geological structure * Data spacing Diamond drill core for reporting samples are collected of Exploration over contiguous Results. intervals of alteration as per logging. There are lengths of diamond core not sampled. Some sampled intervals were re–sampled as composites, or as single duplicate samples. Drilling has taken place on 400m spaced drill fences at 50m intervals * Whether the No Mineral Resource or data spacing Ore Reserve and calculations have been distribution is reported on the deposit sufficient to at this stage. establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. * Whether sample Sample compositing was compositing has performed for reporting been applied. of diamond drill core results, based on a weighted average as a function of sample length versus grade. * Whether the Drilling has orientation been best of sampling orientated to achieves allow a unbiased perpendicular sampling of intercept of possible the surface structures oxide zone to and the be achieved. extent to which this is known, considering the deposit type. * If the Based on relationship current between the information no drilling bias has been orientation introduced and the based on the orientation orientation of of key drilling and mineralised relationship structures with key is structures. considered to have introduced a sampling bias, this should be assessed and reported if material. Sample security * The Sula measures geologists taken to maintain a ensure full chain sample of custody security. of samples as they leave site and are transported to the process laboratory. Upon sample return sufficient checks and balances are undertaken to ensure samples have not been tampered with. Audits or * The All loggingreviews results of and any audits sampling or reviews techniques of have been sampling audited techniques during an and data. independent site visit undertaken by Mr Colin Rawbone of SRK Section 2 Reporting of Exploration Results (Criteria listed in the preceding section also apply to this section.) Data aggregation methods JORC Code explanation Commentary Mineral * Type, reference EL54/2011 issued by the Government oftenement and name/number, Sierra Leone 23rd August 2011 to Blueland tenure location and Horizon (SL Ltd). Blue Horizon (SL Ltd)status ownership including is a 100% owned subsidiary of Sula Iron agreements or & Gold Plc. Full due diligence on the material issues license was carried out by Sula's SL with third parties lawyers and UK lawyers prior to IPO in such as joint October 2012. There are no joint ventures, ventures in place save an MOU with the partnerships, Town Chief and his Elders of Dalakuru overriding Town regarding the buildings in royalties, native Dalakuru base camp. There are no title interests, historical sites, wilderness or historical sites, national park and environmental wilderness or settings within our demarcated license national park and area. environmental settings. * The security of the As above tenure held at the time of reporting along with any known impediments to obtaining a licenseto operate in the area. Exploration * Acknowledgment and Exploration carried out by Mano Riverdone by other appraisal of during the 1990s. Almost impossible toparties exploration by appraise the exploration as little or other parties. no records of the exploration were submitted to the Ministry of Mineral Resources. Geology * Deposit type, The Ferensola project appears to be a geological setting typical weathered BIF with an and style of underlying fresh magnetite BIF. mineralisation. Drill hole * A summary of all All tabulated exploration collars areInformation information included in the release in appendix B. material to the understanding of Table depicts all intercepts where the exploration drill holes have intercepted results including a mineralisation. Intercept lengths from tabulation of the diamond drilling are presented as down following hole lengths, not true lengths, and information for all this is stated in the release. Material drill holes: * easting and northing of the drill hole collar * elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar * dip and azimuth of the hole * down hole length and interception depth * hole length. * If the exclusion of Intercepts have been omitted from this this information is report where drill holes have not justified on the intercepted the interpreted basis that the mineralisation. Drill collars for each information is not of these holes however have been Material and this recorded in Appendix B exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case. Relationship between mineralisation widths and intercept lengths * In reporting Weighting is Exploration calculated as a Results, function of each weighting sample length averaging multiplied by each techniques, grade, with the maximum and/ summed product or minimum divided by the total grade sample length, to truncations present composited (eg cutting intervals. A high of high grade portion of grades) and these intercepts has cut-off been highlighted grades are using a 55% Fe usually Cut-off grade where Material and intervals were should be greater than 5m. stated. * Where Where intercepts are aggregate reported as longer intercepts lengths of lower incorporate grade, it is clearly short stated that the lengths of higher incepts high grade within are part of results and the lower grade longer intercept, not in lengths of addition to the low low grade grade intercept. results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. * The No metal equivalents assumptions are used for the used for any exploration results reporting of at Ferensola metal Prospect. equivalent values should be clearly stated. * These Diamond drill sample relationships intercepts are are reported as down particularly hole widths. important in the reporting of Exploration Results. * If the Mineralisation is geometry of considered to be the steeply dipping mineralisation (approx. 70° NW) with respect with a dominant to the drill strike NE-SW. hole angle is However oxidation of known, its this material is nature should deemed to have be reported. affected a horizon of material concordant with topography. Therefore the vertical holes currently drilled in targeting this material are deemed suitable to intercept the primary target as close to 90° as possible. * If it is not This is clearly known and only stated in the the down hole release. lengths are reported, there should be a clear statement to this effect (eg `down hole length, true width not known'). Diagrams * Appropriate maps Diagrams are and sections provided that (with scales) show all and tabulations surface samples of intercepts and the diamond should be drill hole included for any traces in plan significant view, plus a discovery being cross section reported These is provided should include, with the but not be intercept limited to a locations and plan view of known geology. drill hole collar locations and appropriate sectional views. Balanced reporting * Where Exploration comprehensive results are reporting of all presented in Exploration the Table 1, Results is not regardless of practicable, grade where representative mineralised reporting of material has both low and been high grades and/ intercepted. or widths should Grade has been be practiced to split by avoid misleading lithology based reporting of on logging Exploration undertaken by Results. the Sula geologists. Other substantive * Other Discussion ofexploration data exploration the Ferensola data, if Prospect meaningful and geology is material, should included in the be reported release. including (but not limited to): In situ density geological measurements observations; are carried out geophysical using survey results; Archimedean geochemical principles for survey results; consolidated bulk samples - fresh core and size and method are undertaken of treatment; on a metallurgical lithological test results; basis. bulk density, groundwater, To date no geotechnical and economic or rock extractive characteristics; measures such potential as bulk deleterious or samples, contaminating metallurgical substances. testing, bulk density, groundwater, geotechnical or rock samples have been undertaken. Further work * The nature and Drill testing scale of planned is identified further work (eg as future tests for planned work. lateral At present the extensions or infill drilling depth extensions to a 200m x 50m or large-scale spacing has step-out been commenced drilling). to increase confidence in the initial interpretations of geometry and grade distribution. In addition 1,500m of deep drilling has been planned to develop the fresh magnetite BIF interpreted below the primary oxide material. * Diagrams clearly Possible highlighting the extensions are areas of indicated on possible the plan and extensions, cross section including the provided in the main geological release. interpretations and future drilling areas, provided this information is not commercially sensitive. Section 3 Estimation and Reporting of Mineral Resources (Criteria listed in section 1, and where relevant in section 2, also apply tothis section.) Criteria JORC Code explanation Commentary Database * Measures taken to * Data provided by field geologistsintegrity ensure that data is verified and checked prior to has not been insertion into the company database corrupted by, for using a series of excel cross check example, and visual validation by the senior transcription or geologist on site. keying errors, between its initial * In addition SRK have undertaken a collection and its review of the drill holes at the use for Mineral core shed to check the quality of Resource estimation the logging, along with purposes. cross-checking assay certificates against the database. Further * Data validation statistical validation of the procedures used. presented database was undertaken upon final receipt using Datamine Studio 3 and Leapfrog software. Site visits * Comment on any site * A site visit to the property and visits undertaken inspection of the sample by the Competent preparation facilities has been Person and the undertaken by Colin Rawbone, a outcome of those Senior Geologist with SRK; Mr visits. Rawbone is a Qualified Person and Chartered Professional Member of * If no site visits the AusIMM (313771). Mr Rawbone have been undertook a site visit in May 2013 undertaken indicate during the most recent drilling why this is the campaign and has since provided case. technical advice with respect to the then on going drill programmes. Geological * Confidence in (or * SRK considers the geologicalinterpretation conversely, the interpretation of the deposit to be uncertainty of ) robust and in keeping with projects the geological throughout West and Central Africa. interpretation of the mineral * SRK created a geological model deposit. based on the lithological logging, assay and magnetic susceptibility * Nature of the data data, enabling the hanging wall and used and of any footwall contacts of the BIF unit assumptions made. to be modelled and a three dimensional solid model to be * The effect, if any, created. The oxide cap was modelled of alternative using statistical grade boundaries interpretations on and the magnetic susceptibility Mineral Resource data to determine the base of estimation. oxidation. * The use of geology * The geological zones created are in guiding and primarily based on the Fe controlling Mineral distribution and its relationship Resource with SiO2 and Al2O3 identified estimation. through statistical analysis and are characteristic of the Project. * The factors affecting * The Mineral Resource Estimation has continuity both of been constrained to geological grade and geology. units where such units are supported by associated magnetic susceptibility and grade data provided. * Geological and grade continuity has been supported by geo-statistical analysis (variography). Limiting factors relating to grade continuity are resultant of the spatial relationship available derived from drill spacing. Dimensions * The extent and * The Mineral Resource Estimate is variability of the based on a 3 km portion of a larger Mineral Resource northeast-southwest regional expressed as length trending magnetite BIF. SRK has (along strike or created a geological model otherwise), plan constrained by the license holdings width, and depth of the company and based on the below surface to lithological logging, assay data the upper and lower and magnetic susceptibility limits of the readings for the project. Deep Mineral Resource. drilling has proved the continuation of magnetite mineralisation to a depth of approximately 300 m below surface. SRK have extended this mineralisation to 500 m down dip through the modelling process (RL: 200 m). Estimation and * The nature and * A 2 m composite file was used in amodelling appropriateness of geostatistical study (variographytechniques the estimation and Quantitative Kriging technique(s) Neighbourhood Analysis, "QKNA") applied and key that enabled Ordinary Kriging assumptions, ("OK") to be used as the main grade including treatment interpolation method. The of extreme grade interpolation used an elliptical values, domaining, search following the predominant interpolation dip and dip direction of the parameters and geological domains. The results of maximum distance of the variography and the QKNA were extrapolation from utilised to determine the most data points. If a appropriate search and estimation computer assisted parameters. estimation method was chosen include * The final search ellipse dimensions a description of and sample numbers used for the computer software first pass interpolation were and parameters selected based on the QKNA studies. used. Strike and dip directions of the ellipse are based upon the * The availability of geological interpretation (strike check estimates, -45°, dip 110°) and the presence of previous estimates primary fabrics based on the and/or mine weathering intensity. Dynamic production records anisotropy was used in the and whether the interpolation to honor slight Mineral Resource changes in the deposit estimate takes orientations. appropriate account of such data. * Grades of Fe, LOI, Al2O3, SiO2, P, Mn, CaO, TiO2, K2O, S, and MgO were * The assumptions interpolated into the model. made regarding recovery of * No grade cutting or capping was by-products. applied during this estimate. * Estimation of * A single block model was created deleterious using block sizes of 25 mY by elements or other 100 mX by 10 mZ. non-grade variables of economic * The interpolated block model was significance (eg validated through visual checks and sulphur for acid a comparison of the mean input mine drainage composite and output model grades. characterisation). SRK is confident that the interpolated block grades are a * In the case of reasonable reflection of the block model available sample data. interpolation, the block size in * No check estimates, historical relation to the estimates or production records are average sample available and therefore are not spacing and the accounted for in the this MRE search employed. * Any assumptions behind modelling of selective mining units. * Any assumptions about correlation between variables. * Description of how the geological interpretation was used to control the resource estimates. * Discussion of basis for using or not using grade cutting or capping. * The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available. Moisture * Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content. Cut-off * The basis of the * Cut off parameters have beenparameters adopted cut-off applied to each unique material grade(s) or quality type (domain) identified. This has parameters applied. been derived from domain specific metallurgical test work undertaken in SGS Cornwall and verified by an accredited SRK processing engineer. Mining factors * Assumptions made * The Mineral Resource Estimate foror assumptions regarding possible Ferensola was constrained within mining methods, lithological and grade based solids minimum mining and within a Lerchs-Grossman dimensions and optimised pit shell defined by the internal (or, if following assumptions; metal price applicable, of US150c/dmtu; slope angles of 43º external) mining in the oxide zones and 50º in the dilution. It is fresh material, depending on always necessary as respective location; a mining part of the process recovery of 97.0%; a mining of determining dilution of 3.0%; a base case reasonable mining cost of USD1.50/t and an prospects for incremental mine operating costs of eventual economic USD0.03/t/12 m below the 670 m extraction to reference RL and USD0.03/t/12 m consider potential above the 670 m reference RL; mining methods, but process operating costs of USD2.50/ the assumptions t crushed DSO and high grade made regarding saprolite, all other saprolite mining methods and crushed USD4.00/t and USD5.50/t parameters when crushed BIF; Fe recovery of 30% for estimating Mineral zone 100 (Laterite), 100% for zone Resources may not 110 (High Grade), 30% for zone 120 always be rigorous. (Saprolite), 40% for zone 130 Where this is the (upper saprolite) and 80% for zone case, this should 210 (Magnetite BIF). be reported with an explanation of the basis of the mining assumptions made. Metallurgical * The basis forfactors or assumptions orassumptions predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made. Environmen-tal * Assumptions made * Sula and SRK are not aware of anyfactors or regarding possible additional factors (environmental,assumptions waste and process legal, title, taxation, residue disposal socio-economic, marketing, options. It is political, or other relevant always necessary as factors) that have materially part of the process affected the Mineral Resource of determining Estimate. The Ferensola deposit is reasonable a greenfield site and therefore is prospects for not affected by any mining, eventual economic metallurgical or infrastructure extraction to factors. consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made. Bulk density * Whether assumed or * Bulk density readings are taken determined. If based on lithological intervals assumed, the basis thus targeting representative for the samples being collected. assumptions. If Measurements are carried out on determined, the whole core (typically 10-15 cm method used, pieces) using a balance with top whether wet or dry, and modified under-slung measuring the frequency of capabilities with a detection limit the measurements, of ±1 gm. The balance is regularly the nature, size checked and re-calibrated using and certified weights. representativeness of the samples. * Density measurements are carried out using Archimedean principles * The bulk density for consolidated fresh core. The for bulk material methodology involves drying the must have been samples using a standard oven over measured by methods a predefined period of time that adequately (approximately 4hours) to generate account for void a dry sample and weighing samples spaces (vugs, in air and water using the balance. porosity, etc), Wrapping the porous samples in moisture and plastic wrap and/or coating in wax differences between prior to immersion prevents the rock and alteration sample becoming saturated. zones within the deposit. * Samples maintain a positive correlation with respect to Fe * Discuss assumptions grade with a positive relationship for bulk density between Fe grade and density for estimates used in samples within the oxide and fresh the evaluation BIF domains. A trend line therefore process of the can be fitted to the data different distribution and a regression materials. formula derived to calculate bulk density in the geological model. * SRK acknowledges that the limited data available in the oxidised domains renders the process slightly less efficient in determining accurate regression based curves for the density application. SRK does not believe this discrepancy to be material and consider this method of density determination more robust than applying average densities to the oxidised domains in the block model. It is recommended that additional density data is collated for these material types. Classification * The basis for the * To classify the deposits at classification of Ferensola, the following key the Mineral indicators were used, geological Resources into complexity, quality of the data varying confidence used in the estimation, assay data, categories. density data, QA/QC results, results of the geostatistical * Whether appropriate analysis and quality of the account has been estimated block model. taken of all relevant factors * Mineral Resources at Ferensola have (ie relative been classified according to the confidence in JORC code by Howard Baker (FAusIMM tonnage/grade (CP)), an independent Competent estimations, Person as recognized by the JORC reliability of code. input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data). * Whether the result appropriately reflects the Competent Person's view of the deposit. Audits or * The results of any * This Mineral Resource Estimate hasreviews audits or reviews been subjected to an internal of Mineral Resource review process by SRK employees. estimates. Discussion of * Where appropriate a * It is the opinion of SRK that therelative statement of the quantity and quality of availableaccuracy/ relative accuracy data is sufficient to generateconfidence and confidence Indicated and Inferred Mineral level in the Resources and that the Mineral Mineral Resource Resource Statement has been estimate using an classified in accordance with the approach or JORC 2012 reporting code definition procedure deemed standards. It has an effective date appropriate by the of 12 December 2014. Competent Person. For example, the * The quantity and grade of reported application of Inferred Mineral Resources in this statistical or estimation are uncertain in nature geostatistical and there has been insufficient procedures to exploration to further define these quantify the Inferred and Indicated Mineral relative accuracy Resources as Indicated or Measured of the resource Mineral Resource respectively; and within stated it is uncertain if further confidence limits, exploration will result in or, if such an upgrading them to an Indicated or approach is not Measured Mineral Resource category. deemed appropriate, a qualitative * The pit optimisation undertaken to discussion of the report the final MRS has not been factors that could restricted to the license boundary affect the relative with the resource pit crest being accuracy and extrapolated into the adjacent confidence of the license. Mineralisation however has estimate. been modelled to the license boundary only. SRK also ran a * The statement second optimisation that restricted should specify the resource pit crest to the whether it relates Ferensola license so as not to to global or local encroach on the adjacent license. estimates, and, if As a comparison, SRK has also local, state the reported the grade and tonnage of relevant tonnages, the restricted optimization. which should be relevant to * The restricted optimisation, using technical and a license constraint results in a economic reduction of 72.26Mt of material of evaluation. which 71.66Mt% (99%) is from the Documentation magnetite BIF, 0.49Mt is from should include domain 100 and 0.11Mt is from assumptions made domain130. and the procedures used. * These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.