Aim-listed Zanaga Iron Ore Company (ZIOC) has successfully completed the project development strategy programme for its Zanaga iron-ore project, in Congo-Brazzaville, 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 company notes that the programme has provided increased confidence in the economic potential of the project, confirming the achievement of significant value enhancements since the programme was launched in March 2025.

The programme sought 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.

ZIOC explains that the first key objective was to ascertain the potential to adjust the process plant flowsheet 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, but at that stage, ZIOC says, it still did not possess updated estimates for the newly designed DRI process plant.

As the final step of the programme, ZIOC explains that the DRI process plant results are completed and incorporated into an updated financial model and economic evaluation.

ZIOC says the programme has achieved all its most important objectives and now provides a clear pathway to launch the detailed engineering process ahead of a final investment decision (FID) recommendation, targeted for mid-2027.

Workstreams now completed include the confirmation of DRI product quality potential in stages 1 and 2; an update of specific project costs through an original-equipment manufacturer (OEM) enquiry process; and the assembly of a constructor engagement programme for the project.

Workstreams also include the completion of costing and feasibility of modular hematite processing facilities for Stage 1; thickened and dry tailings facilities for both Stage 1 and Stage 2; and an optional single 30-million-tonne-a-year pipeline during Stage 1.

ZIOC says the completion of the programme offers increased confidence in the project's economic prospects, which have been updated.

The updated data estimates capital expenditure (capex) of $2.17-billion; a net present value (NPV) of $2.54-billion – an increase of about 30.9% compared with the 2024 feasibility update; and an internal rate of return (IRR) of 22.5% for Stage 1 only.

Further, capex is estimated at $4.05-billion; NPV at $4.9-billion; and IRR at 24.3% for the combined stage 1 and 2 operations.

ZIOC CEO Martin Knauth describes the completion of the DRI flowsheet costing and OEM studies as a milestone achievement for the company.

He says the results confirm that an integrated DRI-producing, modular hematite concentrator design, incorporation of thickened tailings technology, dedicated pipeline and concentrate handling facilities, significantly enhance project value while maintaining robust returns and strategic optionality.

"This modular approach, combined with disciplined capital management and strong constructor engagement, positions the project as a highly competitive, future-facing iron-ore development aligned with global decarbonisation trends.

"Encouragingly, our projected economics are consistently improving with every additional study element we complete, providing confidence in our development path as we work towards an FID in 2027."

Additionally, ZIOC chairperson Clifford Elphick says the completion of this strategy programme represents an important milestone for Zanaga, strengthening confidence in the project's robust economics and long-term value.

“As demand for high-grade, lower-emission iron-ore grows, we believe Zanaga is well-positioned to play a key role globally,” he comments.

ZIOC explains that key milestones for the 2026 and 2027 work programme and path to FID include an updated mineral resource and reserve modelling; bulk sampling and pilot-scale metallurgical testing; completion of an environmental-, social- and health-impact assessment; completion of non-process infrastructure design and costing; definition of operating phase systems and related operating expenses; and an updated financial modelling and project economics exercise.

The company says the FID gating process is expected to start in early 2027, dovetailing with investor consortium milestones to achieve a construction decision by the end of 2027.

ZANAGA UPDATE

Meanwhile, ZIOC notes that the board is pleased with the continued progress of the proposed strategic investment by Red Arc Minerals, announced on February 10, with many key conditions now satisfied or well advanced.

Based on the current timetable and, subject to the satisfaction or, where applicable, waiver of the remaining conditions, the company and Red Arc Minerals continue to work towards finalisation of binding transaction agreements and completion of the technical due diligence.

ZIOC says the finalised transaction agreements are now targeted for completion during July. Once the binding transaction agreements are entered into, completion will be conditional upon shareholder approval and any required regulatory approvals. 

The company notes that a shareholder circular containing further details of the transaction, together with a notice convening the extraordinary general meeting, will be published in due course following the execution of the definitive documents.

ZIOC says the directors remain confident in the strategic rationale of the transaction and the value it is expected to deliver for shareholders, adding that further updates will be provided as appropriate.