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

06 May 2026

Zanaga Iron Ore Company Limited

("ZIOC" or the "Company")

Robust Project Economics Confirmed Following Completion of DRI Process Plant Costing

Update on Strategic Investment in Zanaga Project

Zanaga Iron Ore Company Limited (AIM: ZIOC) is pleased to announce 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.

Background

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. Today, as the final step of the Programme, the DRI process plant results are completed and incorporated into an updated financial model and economic evaluation.

The Programme has achieved all of 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 Stage One and Stage Two

·    The completion of costing and feasibility of:

o  modular hematite processing facilities for Stage One;

o  thickened and dry tailings facilities for both Stage One and Stage Two; and

o  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

Updated Project Economics

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[1],[2]

·      Stage One Capital Expenditure Estimate: US$2.17 billion

·      Stage One Net Present Value ("NPV"): US$2.54 billion (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: US$4.05 billion

·      Combined Stage One & Two NPV: US$4.90 billion (increase of 29.4%)

·      Combined Stage One & Two IRR: 24.3% (vs 23.0%)

·      Processing, Filter Plant and product handling Cost: US$11.95 per tonne of concentrate

Martin Knauth, CEO of Zanaga Iron Ore Company Ltd, commented:

"The completion of the DRI flowsheet costing and OEM studies are a milestone achievement for the Company and pivotal for Zanaga, in that these 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 a Final Investment Decision in 2027."

Clifford Elphick, Chairman of Zanaga Iron Ore Company Ltd, commented:

"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.

The Board remains focused on progressing towards a Final Investment Decision in 2027."

Strategic Advancement to DRI Product

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

Stage One Processing Facility Capital and Operating Cost Overview

The updated Stage One processing capital expenditure estimate (April 2026 Case[3]) totals approximately US$753.7 million for processing, filtration, and concentrate handling facilities, contributing to a total expected Stage One capital requirement of US$2.17 billion[4].

Operating unit processing, filter plant and product handling costs for Stage One are estimated at US$11.97 per tonne of concentrate[5].

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.

Strengthened Financial Metrics

The investment in a DRI-producing flowsheet demonstrates strong value creation, as shown below:

Moderate increase in April 2026 IRR due to a higher Stage One capital expenditure estimate.  

OEM and Contractor Engagement

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.

Optional Single Stage One 30Mtpa Pipeline

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. However, the single 30Mtpa pipeline system is potentially advantageous for large strategic investors seeking to ramp up production capacity faster to 30Mtpa, as it eliminates the need for a second pipeline installation, thereby simplifying permitting processes, reducing environmental and community impacts, and significantly reducing financing needs in the second phase of expansion.

A summary of the life-of-mine comparison between a twin-pipeline system (included in the April 2026 Case) and an optional single-pipeline system is provided below:

2026 and 2027 Work Programme and Path to FID

Key milestones include:

·      Updated mineral resource and reserve modelling

·      Bulk sampling and pilot-scale metallurgical testing

·      Completion of Environmental, Social and Health Impact Assessment (ESHIA)

·      Completion of non-process infrastructure design and costing

·      Definition of operating phase systems and related opex

·      Updated financial modelling and project economics

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

Update on Strategic Investment in Zanaga Project

The Board is pleased with the continued progress of the proposed strategic investment by Red Arc Minerals announced on 10 February 2026, with a number of 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. Finalised transaction agreements are now targeted for completion during July 2026.

Once the binding transaction agreements are entered into, completion will be conditional upon shareholder approval and any required regulatory approvals.  A shareholder circular containing further details of the Transaction, together with a notice convening the EGM, will be published in due course following the execution of the definitive documents.

The Directors remain confident in the strategic rationale of the transaction and the value it is expected to deliver for shareholders. Further updates will be provided as appropriate.

An updated corporate company presentation will also be made available shortly on the Company's website here.

For further information, please contact:

ENDS

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.