Features

Sula Iron & Gold plc

07 Mar 2014 | by: James Moore

Sula Iron & Gold have today announced a placing of £2.1m, often this leads to confusion or worse a clouded disparity. We here at ValueTheMarkets see today’s announcement as an opportunity to buy into the weakness before a very likely rebound into a strong spring period. The analytical eye should be cast over a few salient points in the business.

“The company’s recent SRK report values Sula at £23m with a maximum value on its assets of £120m.”

“Should Sula successfully define 15Mt of high quality DSO material then the value would jump towards 5p-10p pretty quickly.”

“Sula Iron assets have turned up some pretty good results so far as they reported their banded iron ore formation (Bif) to be similar to that of the 12Bt neighbouring Tonkolili mine.”

Today’s news will seal the future ramp up in both iron and gold operations, from a very modest market cap of £5m coupled to the extremely interesting gold and more importantly iron assets, Sula offer a decent binary bet. We here at ValueTheMarkets present an investment/trade case based on a decent cash to cover position with addition to strong fundamentals.

Sierra Leone is fast becoming the emerging region of choice as the country’s mining infrastructure solidity builds, its been a decade since ex-colonial powers of Great Britain stepped in with the UN to bring an end to the civil unrest. Fast forward a decade and Tewoo’s $990m investment for 16.5% on the Tonkolili mine stamps the register of change.

Buy with a target above 4p

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This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

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