ZIOC Zanaga Iron Ore Company Limited

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

3 March 2025

Zanaga Iron Ore Company Limited

("ZIOC" or the "Company")

US$21.5m Private Placement, Proposed Buyback of Glencore Shares, Proposed Board Changes and Offtake

Zanaga Iron Ore Company Limited (AIM: ZIOC) is pleased to announce an equity fundraise (the "Fundraise") for gross proceeds of US$21.5 million, with potential to upsize to US$23.0 million, conducted by way of subscriptions ("Subscriptions") to a group of investors with significant experience in the mining industry, project and infrastructure development, and strong relationships in Republic of Congo ("RoC").

The participation of highly experienced investor and advisory groups brings world-class expertise in large-scale iron ore development, financing, and project execution to ZIOC. Their involvement significantly de-risks the Zanaga Iron Ore Project (the "Zanaga Project"), supporting the Company's path to a final construction decision and ensuring a structured approach to funding and development.

The Company also announces that it has entered into an agreement ("the Buyback Agreement") with Glencore Projects Pty Limited ("Glencore") to repurchase Glencore's equity shareholding in ZIOC (the "Glencore Buyback"), completion of which will result in the cancellation of the existing Relationship Agreement between the Company and Glencore (including the resignation of Glencore's director appointee from the ZIOC Board), and the cancellation of the existing Offtake Agreement between the Company, the Company's wholly owned subsidiary MPD Congo ("MPD") and Glencore International AG over marketing rights to iron ore products from the Zanaga Project. The Fundraise will complete in two tranches, at the same price.

The Company also announces its intention to appoint Martin Knauth (CEO of ZIOC) and Phil Mitchell to the Board of Directors of ZIOC in due course.

Use of the Proceeds of the Fundraise:

·              US$15 million of the gross proceeds will be used to repurchase, and subsequently cancel, Glencore's entire current 43% equity shareholding in ZIOC, resulting in the termination of Glencore's Offtake Agreement and Relationship Agreement with the Company.

·              The additional proceeds will provide the Company with more than 12 months of corporate and project level working capital expenditure. This will enable the advancement of key project initiatives aimed at further enhancing the Zanaga Project's robust economics and high quality iron ore product, and commence a formal bid process aimed at establishing a construction consortium for the Zanaga Project - a globally significant, US$5.7bn NPV, 30Mtpa staged development iron ore project targeting high grade production, at low operating costs, underpinned by a 6.9 billion tonne resource and a 2.1 billion tonne reserve.

Key investors in the Fundraise:

The Company has entered into subscriptions with a number of new and existing shareholders to subscribe for an aggregate of 416,860,475 Ordinary Shares at a price of US$0.0516 per Ordinary Share (the "Issue Price"), approximately 4.10 pence per share including agreements with:

1)   Greymont Bay LLC ("Greymont Bay"), through two strategic investment vehicles established by a consortium of mining investors, will be investing US$10.85 million for a 26.2% post buy back transaction ownership in ZIOC. Further, Greymont Bay will also have the right at its sole election to invest an additional US$1.50 million in the second tranche at the Issue Price ("Additional Greymont Bay Subscription"). If Greymont Bay elects to make the Additional Greymont Bay Subscription, the gross proceeds of the Fundraise undertaken by the Company, including the subscriptions, would amount to US$23.01 million and Greymont Bay would have a 28.8% post buy back transaction ownership in ZIOC. Greymont Bay's investors and advisors include:

o  Mark Cutifani: Former CEO of Anglo American plc (2013-2023), a major iron ore producer with large-scale operations in South Africa and Brazil, including Minas Rio, which shares significant technical similarities with the Zanaga Project in logistics infrastructure and product quality. Mark serves as Chairman of Vale Base Metals and played a key role in negotiating Manara's investment - backed by the Kingdom of Saudi Arabia - into Vale Base Metals. Mark also sits on the Board of TotalEnergies, a supermajor oil company with considerable presence and investment in RoC. Mark was also formerly CEO of AngloGold Ashanti, and is a Co-Founder of Odin, a global independent advisory firm.

o  Tony Trahar: Former CEO of Anglo American plc (2000-2007). Tony is credited with developing and implementing a strategy for the major expansion of Anglo American through organic growth and acquisitions, with the market capitalisation of the company growing to US$90 billion by the end of his tenure. He spearheaded Anglo American's acquisition of Kumba Iron Ore Ltd in South Africa, which reached over 47Mtpa production at its peak, and remains one of the world's largest producers of high-quality iron ore. He also serves as a Strategic Advisor to Vision Blue Resources, a mining investment fund.

o  Tony O'Neill: Served as Group Director - Technical at Anglo American plc from 2013 to 2022, where he played a key role in improving productivity and cost efficiencies across the company's operations. With over 37 years of experience spanning iron ore, copper, nickel, and gold, he has led major restructuring efforts and technical innovations within complex mining businesses. Tony is a Fellow of the Royal Academy of Engineering, and is a Co-Founder of Odin, a global independent advisory firm.

o  Phil Mitchell: Formerly of Rio Tinto, where he played a pivotal role in transforming its iron ore division into the company's flagship business unit, with over 300 million tonnes of iron ore production. He later served as Rio Tinto's Head of Business Development, overseeing strategy, M&A, and strategic business change. Phil also serves as CFO of I-Pulse Group, where he previously served as Chairman of I-Pulse's I-ROX business and Société des Mines de Fer de Guinée (SMFG). Phil is also Chairman of the Board at Aura Energy Ltd.

o  Heeney Capital Resource Partners: A private capital firm headquartered in New York, focused on acquiring significant interests in private companies and individual assets. The firm specialises in development-stage mining assets, leveraging deep sector expertise to unlock value in high-impact, strategically significant projects. Its portfolio is complemented by opportunistic investments across critical resource sectors, with a strong track record of partnering with industry leaders to drive long-term asset growth and value realisation.

2)   Gagan Gupta, Founder and CEO of Arise, is investing US$4.0 million through an investment vehicle for a post buy back transaction ownership of 9.7% (before any additional Greymont Bay Subscription).

o  Arise is developing the Special Economic Zone ("SEZ") and its related infrastructures facilities in Pointe-Noire, RoC.

o  Arise is a highly regarded operator and developer of industrial ecosystems, designing, creating, financing and developing interconnected infrastructure. The Arise portfolio consists of three existing port assets in West Africa, as well as the development of the SEZ in Pointe-Noire.

o  Strategic Partnership: On December 11, 2024, Zanaga Iron Ore Company and its wholly owned subsidiary, MPD, signed a Memorandum of Understanding ("MoU") with Arise. This collaboration aims to advance the development of the Zanaga Project's onshore and offshore port infrastructure within the SEZ, leveraging Arise's extensive experience in infrastructure development to enhance and de-risk the project's logistics and export capabilities.

3)   Sir Mick Davis, a highly successful mining executive accredited with listing, leading and building Xstrata into one of the largest diversified mining companies globally prior to its acquisition by Glencore in 2013. Sir Mick grew Xstrata over a twelve-year period from a market value of US$500 million to over US$70 billion. Sir Mick has over 40 years of experience in mining, industrials and natural resources, and is the Founder and Managing Partner of Vision Blue, a strategic metal and mineral resources private equity organisation, a Director of Vision Blue Resources, and Chair of a number of its portfolio companies, including Sinova Global, Serra Verde, NextSource Materials and Ferro-Alloy Resources. Sir Mick brings deep expertise in leading international and emerging market businesses, with extensive engagement at both governmental and operational levels.

4)   Other investors include:

o  The Founder of a Saudi Arabian investment fund focused on developing downstream processing plants in the Kingdom of Saudi Arabia.

o  Significant investment from ZIOC's management team, namely Martin Knauth, the Company's CEO, and Andrew Trahar, Corporate Development and Investor Relations Manager.

Strategic Offtake Partner

As part of the transaction and as a condition of Greymont Bay's cornerstone subscription, marketing rights over 20% of the iron ore products from the Zanaga Project will be allocated to Gulf Iron and Steel (GIS), a consortium of strategic industry entities seeking to develop integrated steel facilities supplied by high-grade pellet feed iron ore to the Americas and the Middle East ("GIS Offtake Agreement"). The GIS Offtake Agreement enhances market access and offtake security, further de-risking Zanaga's commercialisation strategy and supporting its path to financing and construction. The terms of the GIS Offtake Agreement are in line with Group's current marketing agreement with Glencore, as announced on 23 November 2022, but now provides ZIOC with the flexibility to offer marketing or offtake rights over 80% of the Zanaga Project's iron ore production to other strategic funding partners and operators. The GIS Offtake Agreement is conditional upon the completion of the Glencore Buyback and termination of Glencore's Offtake Agreement.

Clifford Elphick, Chairman of ZIOC, commented:

"Today's transaction is a transformational milestone for Zanaga, securing investment and leadership from industry-leading mining luminaries with a strong track record of developing some of the highest quality mining assets globally."

"The fundraise allows us to buy back Glencore's shareholding and fund more than a year of key workstreams that will accelerate the Zanaga Project. This enhances our strategic flexibility, strengthens our financial position, and re-positions the project to prepare for an execution phase."

"The iron ore industry has experienced a recent resurgence in M&A transactions, aimed entirely at securing iron ore mines capable of producing high grade iron ore. This transaction enables us to capitalise on our preparatory discussions with strategic partners and assemble a construction consortium for the Zanaga Project, aimed at unlocking the full potential of what we believe is the world's most compelling undeveloped iron ore asset globally."

"I am particularly excited about our new strategic partnerships with Middle Eastern and International groups, with industry expertise but also the commercial relationships needed to support financing and offtake agreements, adding notable value for all our stakeholders, including the Republic of Congo."

"I would like to thank Martin Knauth and Andrew Trahar for envisioning and structuring this entire process, driving the transaction and raising the capital."

Mark Cutifani, speaking on behalf of Greymont Bay, commented:

"Zanaga represents one of the most compelling undeveloped iron ore opportunities globally, combining scale, high-grade production, and a clear, cost-effective development path. Its low operating costs and integrated slurry pipeline logistics mirror the efficiency and infrastructure-driven advantages seen in assets like Anglo American's Minas Rio, which successfully scaled into a leading global supplier."

"Zanaga's high-purity iron ore pellet feed product, grading up to 68.5% Fe, is expected to be highly sought after in the shift toward low-carbon steel production, providing a distinct premium market opportunity. The straightforward phased development model and fully permitted status further de-risk execution, allowing the project to move rapidly toward construction, once financing is in place."

Gagan Gupta, CEO of Arise, commented:

"I'm pleased that ZIOC and its management share our confidence in the Republic of Congo as an attractive investment destination and emerging mineral resource producer. Our investment in Zanaga is not only a strategic entry into a world-class iron ore project but also highly synergistic with our ambitions to become the leading port operator on the coast of West Africa."

"As Arise develops the Special Economic Zone and key port infrastructure in Pointe-Noire, our partnership with ZIOC and MPD creates a natural alignment between high-quality iron ore production and efficient export logistics. By leveraging our expertise in unlocking development capital and infrastructure execution, we aim to accelerate the path to construction and long-term value creation for the Zanaga Project and its associated ecosystem."

Martin Knauth, CEO of ZIOC, commented:

"I would like to thank Glencore for their many years of valuable support for the Zanaga Project and positive engagement around this transaction."

"By securing the support of highly credible investors, we are now able to drive forward toward a construction decision, with a world-class team, aligned stakeholders, and a clear roadmap to delivering a high-grade, low-cost iron ore mining operation. We will now launch a formal process aimed at assembling a project funding and execution consortium."

"I look forward to joining the Board shortly and providing our stakeholders with further updates regarding our corporate and operational progress in the months ahead."

Fundraise overview

The Company has entered into Subscriptions totalling US$21.51 million of gross proceeds for the issue of 416,860,475 ordinary shares of no par value in the Company ("Ordinary Shares") at a price of US$0.0516 (approximately 4.10 pence) per Ordinary Share. The Subscriptions will be completed in two tranches. The first tranche will consist of the issue of 337,790,707 Ordinary Shares (the "First Tranche Subscription Shares") for gross proceeds of US$17.43 million and will be conditional on the admission of the First Tranche Subscription Shares to trading on AIM on 7 March 2025 ("First Admission"). The second tranche will consist of the issue of 79,069,768 Ordinary Shares (the "Second Tranche Subscription Shares") for gross process of US$4.08 million and will be conditional on the admission of the Second Tranche Subscription Shares to trading on AIM on or around 26 March 2025 ("Second Admission").

Greymont Bay will be immediately working with the Company's management team, via a newly established Zanaga Technical Committee, to assess the opportunity to accelerate key Project workstreams and targeted milestones. Greymont Bay has been provided a right, following conclusion of this exercise, to increase the size of its Tranche 2 investment further, up to an additional US$1.50 million at the same price per share, which would ultimately take Greymont Bay's investment to a total US$12.35 million. The Company believes that the provision of this additional funding would secure its ability to progress a number of key metallurgical testwork initiatives with the potential to provide significant upside value, as well as accelerating its ability to secure key technical personnel required for the pre-construction engineering phase (FEED).

Glencore Buyback overview

The Company has agreed with Glencore that it will repurchase 290,843,718 Ordinary Shares currently owned by Glencore ("Buyback Agreement"). The Buyback Agreement includes customary warranties and sets out the mechanics for the repurchase.

Pursuant to the Buyback Agreement, the Company will purchase all the shares held by Glencore on or around 12 March at US$0.0516 per share (approximately 4.10 pence per share) ("Buyback Price") for an aggregate purchase price of US$15 million.

Upon all of Glencore's current 290,843,718 Ordinary Shares being repurchased, the Relationship Agreement between Glencore and the Company dated 16 December 2022 will terminate and the Glencore Offtake Agreement between MPD, the Company and Glencore International AG dated 22 November 2022, pursuant to which Glencore International AG has the rights to market iron ore produced by the Zanaga Project, will also be terminated. All Ordinary Shares repurchased from Glencore will be cancelled.

Net effect of the Fundraise and the Glencore Buyback

The net effect of the Fundraise and the Glencore Buyback, when both are completed, will be that the Company will have issued 416,860,475 new Ordinary Shares in aggregate (before the Greymont Bay Additional Subscription, if exercised) and will have repurchased and cancelled 290,843,718 Ordinary Shares from Glencore, all at a price of US$0.0516 per share. The resulting net increase in the issued share capital of the Company will be 126,016,757 Ordinary Shares representing 18.6% of the currently issued share capital and the Company will have secured approximately US$6.51 million of working capital (being $2.43 million at First Admission and $4.08 million at Second Admission), providing more than 12 months to the Company to execute on its key initiatives, including progressing towards a construction decision and bringing together the project funding and execution consortium. This working capital quantum will be increased to US$8.01 million at Second Admission if the Greymont Bay Additional Subscription is exercised. In addition, the Glencore Offtake Agreement over 100% of production from the Project will have been cancelled and replaced with the GIS Offtake Agreement over only 20% of production, resulting in the Company securing rights to 80% of future production from the Zanaga Project.

Board Changes

Upon completion of the Glencore Buyback, Peter Hill will stand down as a Director of the Company. The Board would like to thank Mr Hill for his valuable service and consistent support for the Company and the long-term objectives of the Zanaga Project.

In light of the proposed execution of the Company's strategies, it is proposed that the Company's CEO Martin Knauth will join the Board of Directors as soon as the necessary regulatory checks have been completed. Mr Knauth's duties as CEO will remain unchanged.

In addition, Greymont Bay has requested and the Company has agreed to give Greymont Bay the right to appoint a Director to the Board. Subject to completing the relevant regulatory checks, it is intended that Phil Mitchell will be appointed to the Board as Greymont Bay's representative. The Company and Greymont Bay have proposed entering into a relationship agreement amongst other things to formally grant the right to make an appointment to Greymont Bay.

Further announcements will be made in due course as and when the relevant appointments become effective.

Lock-In and Orderly Market agreement with Guava

The Company and Guava Minerals Limited ("Guava") have entered into an agreement (the "Guava Lock-in Agreement") pursuant to which, subject to certain exceptions, Guava and its connected persons has undertaken with the Company not to, and to procure that its connected persons do not, dispose of any interest in any ordinary shares held by it or subsequently acquired after the date of the Guava Lock-In Agreement, for 6 months following First Admission. After the period of 6 months from First Admission, Guava has agreed to only dispose of ordinary shares held by it in accordance with certain orderly market provisions for a further period of 6 months. In the event that First Admission does not occur by 14 March 2025, the Guava Lock-in Agreement shall lapse and have no effect.

Upcoming Investor Day

The management team looks forward to updating shareholders at the upcoming Investor Day on 18 March 2025, where they will provide further clarity on the ongoing strategic review process, financing pathway, and key operational updates and initiatives.

To register for the Investor Event please follow the below link below:

Registration link: Zanaga Iron Ore Company Investor Day, Tue, Mar 18, 2025 at 5:00 PM

Admission and Total Voting Rights

Pursuant to the Subscriptions, an application will be made for the First Tranche Subscription Shares to be admitted to trading on AIM and as such First Admission is expected to occur on 7 March 2025.

All of the shares issued as a result of the Fundraise will rank pari passu with each other and with the Company's existing Ordinary Shares from their date of issue. The Company does not hold any shares in treasury. Following First Admission, but prior to the buyback and cancellation of the Glencore shares, the total number of Ordinary Shares and voting rights in the Company will be 1,013,584,178 and this figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Further announcements will be made in due course and as required as Second Admission and the Glencore Buyback are completed, confirming the dates each event becomes effective and the resultant Total Voting Rights position of the Company.

Related Party Transactions

As Glencore is a Substantial Shareholder (as defined in the AIM Rules for Companies) of the Company, the Buyback Agreement (encompassing the Glencore Buyback, cancellation of existing Relationship Agreement and Offtake Agreement) constitute a related party transaction for the purposes of the AIM Rules for Companies. Accordingly, Mr Clifford Elphick, Mr Clinton Dines and Mr Johnny Velloza, each Non-Executive Directors consider, acting in their capacities as Independent Directors for the purposes of the related party transaction, consider, having consulted with Panmure Liberum Limited, the Company's Nominated Adviser, the terms of the Buyback Agreement to be fair and reasonable insofar as the Company's shareholders are concerned.

ENDS

About ZIOC:

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

The Zanaga Iron Ore Project is a world-class asset with a 6.9 billion tonne resource and 2.1 billion tonne reserve, designed for 30Mtpa production of high-grade (66-68.5% Fe) pellet feed with very low levels of impurities. A 2024 Feasibility Study reaffirmed its robust economics. When fully ramped, Phase 1 and Phase 2 combined could make Zanaga one of the largest iron ore mines globally. With all key permits in place, Zanaga is positioned to capitalise on growing demand for high-quality, low-impurity iron ore, leveraging low operating costs and a cost-efficient slurry pipeline to the port.

In light of the changes in the world's economy, and the growing demand for low-carbon steel production, the Zanaga Project is well-placed to become one of the largest producers of high grade premium pellet feed iron ore.

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

For further information, please contact: