JOHANNESBURG (miningweekly.com) – Aim-listed Sula Iron and Gold has secured a £2-million, five-year equity financing facility (EFF) with Darwin Strategic.

The exploration and development company said in a statement on Wednesday that the transaction would allow Darwin to subscribe for up to 1.7-million shares in Sula, with 850 000 exercisable immediately at 3p apiece.

The remaining 850 000 shares would be exercisable pro rata to subscription monies received against the £2-million facility.

“The EFF with Darwin strengthens our existing financing position and provides a highly flexible and cost effective source of capital that we are able to access should we require it in the future,” said Sula CEO Nick Warrell, noting that the company had no plans to use it owing to a strong cash balance sufficient for the foreseeable future.

However, it did provide Sula with additional fundraising options.

“One of the key benefits of this facility is that we remain, at all times, in complete control over the pricing and timing of any issue of equity, as it can only be used at our discretion,” he added.

“We are anticipating strong news flow over the coming months, especially with the publication of a Joint Ore Reserves Committee-compliant mineral resource estimate on both the direct shipping ore and fresh magnetite within our [mining] licence [at the Ferensola project, in Sierra Leone].”

SRK Consulting started work on the mineral resource estimation as assay results from Sula’s deep-drilling campaign on the fresh magnetite banded-iron formation (BIF) target on its main BIF unit, BIF 1, had been received.

The results identified up to five fresh magnetite BIF units.

“As expected, drilling has confirmed the presence of magnetite mineralisation to a depth of in excess of 400 m from surface along the full 2.8 km strike of the main BIF unit,” said Warrell.

Sula kicked off a resource drilling campaign at Ferensola during 2014 after a successful 2 000 m reconnaissance drill programme in 2013.

The company's exploration camp was currently on care and maintenance with exploration set to restart on cessation of the rainy season.