Zanaga Iron Ore Company Ltd.

Management Reports • Jan 6, 2026

National Storage Mechanism | Additional information

RNS Number : 7174N

Zanaga Iron Ore Company Ltd

06 January 2026

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"), AND IS DISCLOSED IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF MAR

6 January 2026

Zanaga Iron Ore Company Limited

("ZIOC" or the "Company")

Completion of Project Value Enhancement Workstreams

Zanaga Iron Ore Company Limited (AIM: ZIOC) is pleased to announce the completion of its project value enhancement initiative, first announced on 18 March 2025. The workstreams have delivered significant value enhancement and strategic benefits across multiple areas of the Zanaga Iron Ore Project (the "Zanaga Project" or the "Project").

Highlights:

Positive results from completion of four key workstreams:

1.   Revenue improvement: US$11,325 million of potential revenue upside over the initial 30-year life of the asset ("LoA") due to product grade improvement which was separately announced in June 2025.

2.   Total combined capital expenditure savings potential: US$352 million, comprising:

a.   Pipeline configuration option: the option to construct a single 30 million tonnes per annum ("Mtpa") capacity pipeline would increase upfront Stage One (12Mtpa) capital expenditure by US$349 million, but would eliminate US$706 million of Stage Two pipeline capital expenditure.

b.   Tailings facility design: a minor increase of US$5 million in capital expenditure associated with thickened and dry tailings technologies.

3.   Total combined cash cost savings: US$2,235 million over the initial 30-year LoA.

4.   Updated project economics: a combined, updated assessment of Project economics will be released in February 2026 (see below).

·      Conclusion: the four workstreams have delivered numerous positive outcomes with the DRI-grade product test results delivering the most significant economic benefit. The other initiatives are not currently expected to deliver material incremental economic upside, however, provide strategic benefits and further opportunities to de-risk the Project.

Next milestones expected in Q1 2026, as previously announced on 30 December 2025:

·      Project development strategy update (announcement planned for February 2026)

o  Process plant Front End Engineering & Design ("FEED") results, including updated capital and operating cost estimates based on a DRI flowsheet developed through 2025.

o  Fully integrated Project development plan, including the economics of all Project enhancements assessed to date.

o  Update on logistics and infrastructure solutions required to support development of the Zanaga Project.

·      Strategic Partner process (Q1 2026)

o  ZIOC is pleased with the progress being made in engaging a number of strategic investors interested in developing the Zanaga Project.

o  ZIOC intends to secure initial offers from investors during Q1 2026 and is targeting the announcement of transaction terms with a selected strategic investor during Q1 2026.

Martin Knauth, CEO of ZIOC, commented:

"The outcomes of these value enhancement workstreams are significant for the Zanaga Project, as each has delivered meaningful improvements to the risk and engineering basis, environmental performance and Project economics.

"Importantly, we are now in a strong position to advance through the FEED phase with the confidence that our development pathway is optimised for both value creation and sustainability, benefitting the Company and its stakeholders.

"Zanaga is uniquely positioned to supply premium DRI-grade pellet feed into a rapidly decarbonising steel sector, and these enhancements reinforce the Project's status as a world-class iron ore asset."

Overview of project value enhancement workstreams

Throughout 2025, alongside other Project development activities, the Company completed a number of workstreams intended to improve construction, operations, strategic optionality and overall economics for the Zanaga Project.

Detailed design and costing assessments were completed with industry experts across the following workstreams:

1)   Product quality enhancements - Direct Reduced Iron ("DRI") test work (positive results announced on 25 June 2025)

2)   Pellet plant feasibility study

3)   Single 30Mtpa capacity pipeline feasibility study

4)   Thickened and dry tailings facility study

The completion of these workstreams has not only improved the economic potential of the Zanaga Project but has also established a robust engineering and design foundation as the Company progresses the Project.

Key Overall Economic Highlights[1]:

	Area	Outcome	Potential impact over 30-year LoA	% Change
1.	Revenue Potential[2]	Increases	US$11,325 million	16%
2.	Total Capital Expenditure	Reduces	US$352 million	(9)%
3.	Total Cash Cost	Reduces	US$2,235 million	(10)%
	a. Sustaining Capital Expenditure	Reduces	US$1,505 million	(39)%
	b.        Operating Expenditure	Reduces	US$731 million	(4)%

·    LoA: 30 years of premium DRI grade pellet feed >68.5% Fe grade.

·     Increased price premium expected due to higher iron content with low impurities.

1)   Product Quality Enhancements - DRI test work (previously announced)

During Q2 2025, the Company commissioned and completed a metallurgical laboratory test work programme to determine the Zanaga Project's ability to produce DRI-grade pellet feed concentrate across its full planned 30Mtpa production scale, including both Stage One (12Mtpa) and Stage Two (18Mtpa expansion).

Samples of the Zanaga Project resource were assembled from both hematite and magnetite zones, which are required for the Stage One and Stage Two phases of the Zanaga Project, respectively.

The primary test work, conducted in China, included laboratory analyses, magnetic separation and flotation. The 2014 Feasibility Study flowsheet was adjusted to optimise process steps and replace certain equipment.

Outcomes

·    The test work confirmed the potential to produce DRI-grade pellet feed products from the Zanaga Project, as summarised below:

Product	%Fe	%Si2O3	%Al2O3	%P
Hematite concentrate	68.5	1.05	0.47	0.034
Magnetite concentrate	69.1	1.96	0.40	0.028

·    Following updates to the Project flowsheet and expert consultation, ZIOC received indicative quotes for capital and operating costs to support engineering and financial modelling. These costs will be confirmed during FEED following equipment sizing, with results expected in Q1 2026.

·    Confirmation of DRI-grade pellet feed has increased the Project's revenue potential to US$11,325 million1,2 over the LoA.

2)   Pellet Plant Feasibility Study

The Electric Arc Furnace ("EAF") share of global steel production is expected to increase from approximately 30% in 2025 to 50% by 2050 (equivalent to approximately 866Mtpa of additional output[3]). This shift in steel production towards EAF, driven by lower operating costs, greater efficiency, reduced emissions and global net-zero commitments, is expected to increase demand for DRI pellets for EAF-based steelmaking.

Following completion of laboratory-scale DRI testing and development of a revised flowsheet at concept level, the Company evaluated the potential addition of pelletising plants, including traditional induration (hot pelletising) and newer cold-pressing technologies.

Iron ore pellets are generally preferred over fines due to their physical and chemical properties, which can improve efficiency, productivity and environmental performance in steelmaking. These attributes support a pellet price premium. Accordingly, adding pelletising to the Zanaga value chain (mine → process → pipeline → filtering → pelletising) could potentially increase revenues by approximately US$38-48 per tonne[4], while also reducing environmental, handling and shipping risks.

A leading industry expert was appointed to leverage their direct experience in the pellet industry and complete this feasibility study, which assessed:

·    A 2.5Mtpa pellet plant located in the Republic of Congo.

·    Flowsheets and major equipment for hot and cold pelletising.

·    Estimated direct and indirect capital expenditure, and operating costs, for each technology.

Outcomes

·    The study verified the likely costs to construct and operate both hot and cold pellet plants.

·    Marketing analysis indicates that premiums for DRI pellets are materially higher than those for standard pellets.

·    While the Republic of Congo would be a suitable location, current domestic market conditions are less competitive than certain other jurisdictions.

·    Regions closer to steel producers and offering lower-cost long-term gas and power tariffs may present improved investment opportunities and will be evaluated further.

·    Potential partnerships with iron and steel producers will also be considered, which may reduce capital requirements and support a long-term customer base.

3)   Single 30Mtpa Capacity Pipeline Feasibility Study

The Zanaga Project base case development plan included two separate pipelines to transport concentrate from the mine site to port:

·  Stage One: 12Mtpa capacity pipeline

·  Stage Two: additional 18Mtpa capacity pipeline

A feasibility study was commissioned in Q2 2025 to evaluate construction of a buried 30Mtpa pipeline as part of Stage One. The study covered design, hydraulics, electrical systems, construction schedule and costs, with benchmarking against comparable international projects.

Outcomes

·    A single 30Mtpa pipeline system is environmentally, technically and economically feasible. A larger diameter would reduce friction losses.

·    A single 30Mtpa pipeline provides significant strategic value, avoiding the need for construction of a second magnetite pipeline, reducing permitting complexity and environmental and community impacts.

·    The single pipeline approach also removes brownfield expansion complexity (mechanical/electrical tie-ins), simplifying operations to a single instrumentation and asset management solution.

·    Under the 2014 Feasibility Study (and re-costed in the 2024 Feasibility Study update), Stage One pipeline capex was estimated at US$637 million and Stage Two pipeline capex at US$706 million, totalling US$1,343 million across both stages.

·    Following completion of the single 30Mtpa pipeline feasibility study, total upfront pipeline capex is estimated at US$986 million, implying an increase in Stage One capex of US$349 million, but a reduction in total capex of US$357 million compared to the two-stage approach.

·    In addition, a single 30Mtpa pipeline would allow removal of the booster station and its associated fuel consumption, supporting a potential reduction in total operating costs of US$950 million over the life of mine.

·    While the incremental NPV impact is expected to be limited (as higher Stage One cash investment offsets the time value of Stage Two savings), the Company considers the strategic value of a single pipeline configuration to be significantly positive.

4)   Thickened and Dry Tailings Study

Prior to 2025, a large wet tailings storage facility ("TSF") was planned for the Zanaga Project. Thickened or filtered tailings can reduce moisture content, lower long-term costs, enable a smaller and easier-to-operate TSF, and support progressive rehabilitation.

A study was initiated in Q2 2025 to revise the 2014 Feasibility Study TSF design to align with international best practice, including the Global Industry Standard on Tailings Management ("GISTM") and the Australian National Committee on Large Dams ("ANCOLD"). The study examined tailings discharge options, construction and operational plans, financial factors and synergies between mine infrastructure assets.

Outcomes

·    Thickened tailings technologies offer more stable and efficient alternatives to conventional wet tailings by reducing water content before deposition, improving geotechnical performance, reducing environmental risks and increasing water recovery.

·    Thickened and dry tailings facilities compliant with GISTM and other global standards have the potential to reduce cash expenditure by US$1,280 million over the life of asset, comprising:

a)   a minor increase in capital expenditure of US$5 million.

b)   a reduction in total cash cost of US$1,285 million, comprising:

i)    a decrease in sustaining capital expenditure of US$1,505 million; and

ii)    an increase in operating costs of US$219 million.

ENDS

For further information, please contact:

Zanaga Iron Ore Company Limited Corporate Development and Investor Relations Manager	Andrew Trahar +44 20 3916 5021
Panmure Liberum Limited Nominated Adviser, Financial Adviser and Joint Broker	Scott Mathieson / John More +44 20 3100 2000
Tamesis Partners LLP Joint Broker	Richard Greenfield/ Charles Bendon +44 203 882 2868
Shard Capital Partners LLP Joint Broker	Damon Heath +44 20 7186 9952
BlytheRay Public Relations	Tim Blythe / Megan Ray / Will Jones +44 20 7138 3204 [email protected]

About ZIOC:

Zanaga Iron Ore Company Limited (AIM ticker: ZIOC) is an iron ore exploration and development company, with its flagship asset being the 100% owned Zanaga Iron Ore Project, located in the Republic of Congo. The Government Mining Licence, Environmental Permit and Mining Convention are all in place for the Project.

The Zanaga Iron Ore Project is a globally significant asset with a 6.9 billion tonne resource and a 2.1 billion tonne reserve, targeting 30Mtpa production of high-grade DRI pellet feed with very low impurity levels. When fully developed, Stage One (12Mtpa) and Stage Two (18Mtpa expansion) together could establish Zanaga as one of the world's largest iron ore mines. With all key permits secured, Zanaga is well positioned to benefit from increasing demand for high-quality, low-impurity iron ore, supported by low operating costs and an efficient slurry pipeline to port.

In the context of the global transition towards lower-carbon steel production, the Zanaga Project is well positioned to become one of the largest producers of high-grade, premium DRI pellet feed iron ore concentrate.

The Zanaga Iron Ore Company Limited LEI number is 21380085XNXEX6NL6L23.

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[1] Compared to 2024 feasibility study update for Stage Two (12+18Mpta expansion)

[2]  Based on a DRI pricing case (65% Fe CFR China US$115/t, 68% Fe CFR China US$130/t)

[3] Source: AME Group June 2025

[4] Source: AME Group June 2025, DRI pellet premium over 68% Fe

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