Sula Iron & Gold has announced an initial Direct Shipping Ore (DSO) target of 15Mt, predicting that the ore has the potential to share the same high quality characteristics (such as low silica DSO) as African Minerals’ 12.8Bt Tonkolili asset.

“If Sula can successfully define ~>15Mt of high quality DSO material, we would value it at an EV of £17m, equating to a market value of 7p. A successful programme in our view, as defined above, can thus unlock an upside of ~95%,” Sula said in a statement.

A 2 000 m scout drilling programme, completed late last year, identified a 2.2 km banded iron formation (BIF). Leading consultancy SRK Exploration estimate a 500 Mt exploration target for Sula’s BIF given reasonable strike and depth extension assumptions.

Sula is still at a reconnaissance stage of exploration on the Ferensola licence. Historical exploration results however, albeit limited, returned diamond drilling highlights of 8.7 m at 10.5 g/t Au and 9.0 m at 6.6 g/t Au, and a historical trenching programme also revealed a stock work system with an average grade of 5.97 g/t.

“An initial SRK resource target of 250-400 koz is an encouraging start. We currently value these assets at £2.7m,” Sula said.

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