Announcement • May 08
Zanaga Iron Ore Company Limited Confirms Completion of DRI Process Plant Costing and Updates DRI Product Strategy
Zanaga Iron Ore Company Limited had announced the successful completion of the project development strategy programme (the "Programme"), which now includes the results of a technical and commercial evaluation of the process flowsheet to produce premium quality Direct Reduced Iron ("DRI") pellet feed concentrates. The Programme has provided increased confidence in the economic potential of the Zanaga Iron Ore Project in the Republic of Congo (the "Project"), confirming the achievement of significant value enhancements since the Programme was launched in March 2025. In March 2025, the Company launched the Programme with the ambition to deliver value enhancements to the Project through product quality enhancements, improved thickened tailings solutions, and options for the pipeline development solution. This was intended to culminate in securing updated technical cost estimates and economic results, capable of being provided to strategic investors, lenders and financiers. The first key objective was to ascertain the potential to adjust the process plant flow sheet to produce an even higher grade premium DRI grade product - which was achieved and announced in July 2025. This provided a foundation for the next phases of work, most of which were completed and announced in January 2026, but at that stage ZIOC still did not possess updated estimates for the newly designed DRI process plant. As the final step of the Programme, the DRI process plant results are completed and incorporated into an updated financial model and economic evaluation. Workstreams now completed include: The confirmation of DRI product quality potential in Stage One and Stage Two; The completion of costing and feasibility of: modular hematite processing facilities for Stage One; thickened and dry tailings facilities for both Stage One and Stage Two; and an optional single 30 million tonnes per annum ("Mtpa") pipeline during Stage One (providing a compelling optional alternative to the April 2026 case two-stage pipeline plan); Update of specific project costs through an Original Equipment Manufacturer ("OEM") enquiry process; Assembly of a Constructor Engagement Programme for the Project. The completion of the Programme offers increased confidence in the Project's economic prospects, which are now updated and accurate as of end December 2025. Key Highlights from the April 2026 Case: Stage One Capital Expenditure Estimate: USD 2,170 million; Stage One Net Present Value ("NPV"): USD 2,540 million (increase of approx. 30.9% vs 2024 Feasibility Update); Stage One Internal Rate of Return ("IRR"): 22.5% (vs 21.4%); Combined Stage One & Two Capital Expenditure Estimate: USD 4,050 million; Combined Stage One & Two NPV: USD 4,900 million (increase of 29.4%); Combined Stage One & Two IRR: 24.3% (vs 23.0%); Processing, Filter Plant and product handling Cost: USD 11.95 per tonne of concentrate. Following successful laboratory-scale DRI test work completed in mid-2025, ZIOC commissioned detailed conceptual and feasibility-level designs to refine capital and operating cost estimates to ±20% accuracy. The updated development strategy incorporates: A modular 12Mtpa hematite concentrator complex consisting of three 4Mtpa lines; A two-stage, 12Mtpa and 18Mtpa, pipeline system, with optional single 30Mtpa slurry pipeline system; Thickened tailings storage facilities; A 12Mtpa filter plant and covered concentrate handling facilities. The Company's DRI product strategy positions the Zanaga Project to benefit from: Increasing demand for premium iron ores, particularly DRI grade iron ore; Global steel sector decarbonisation via growth in Electric Arc Furnace ("EAF") steel production; Firm positioning in the lowest cost quartile of iron ore producers. The updated Stage One processing capital expenditure estimate (April 2026 Case) totals approximately USD 753.7 million for processing, filtration, and concentrate handling facilities, contributing to a total expected Stage One capital requirement of USD 2,170 million. Operating unit processing, filter plant and product handling costs for Stage One are estimated at USD 11.97 per tonne of concentrate. While Stage One processing operating costs and capital expenditure estimates have increased moderately compared with previous studies, the inclusion of DRI-grade product premiums significantly improves the Project's Stage One NPV by approximately 31% relative to the 2024 Feasibility Study Update. The investment in a DRI-producing flowsheet demonstrates strong value creation, as shown below: April 2026 Economic Update Previous Studies Change vs 2024 Feasibility Update Financial Metric 2026 Based on DRI product 2024 Feasibility Study Update 2014 Feasibility Study % Stage One Capex (USD million) 2,174 1,935 2,196 12.5% NPV (USD million) 2,539 1,939 2,132 30.9% IRR (%) 22.5 21.4 22.9 +1.1% Avg. Product Grade (%Fe) 68.5 65.9 65.9 +2.6% Stage One and Two Expansion Capex (USD million) +1,871 +1,871 +2,488 - Combined NPV (USD million) 4,897 3,784 4,026 29.4% Combined IRR (%) 24.3 23.0 23.92 +1.3% Avg. Product Grade (%Fe) 68.8 67.2 67.2 +1.6%. As part of the Programme, extensive engagement with leading Chinese OEMs and construction groups took place during 2025, enabling the Company to: Pre-qualify equipment suppliers and contractors; Identify lump-sum and other cost frameworks for major equipment and construction scopes; Define construction productivity assumptions; Improve cost transparency and risk management plans. A second qualification and RFQ process is planned during 2026, aligned with metallurgical bulk testing and detailed engineering. Upon analysis of the single-pipeline option, announced in January 2026, the April 2026 Case retains the two-stage pipeline design basis, involving the construction of a 12Mtpa capacity pipeline for Stage One, and an additional 18Mtpa capacity pipeline for the Stage Two expansion to 30Mtpa total production capacity.