30
April 2024
Feasibility Study
update
Zanaga Iron Ore Company Limited ("ZIOC" or the
"Company") (AIM: ZIOC), is pleased to announce the results of the
Company's 2024 Feasibility Study update process ("2024 FS
update").
Highlights
Positive results received from the
2024 FS cost update study further underlines the robust economics
of the Company's 30 Mtpa staged development Zanaga Iron Ore
Project:
·
12Mtpa Stage One
o Capital investment of US$ 1.94 billlion
o Operating cost of US$ 31.5 / dmt FOB
o Net
Present Value of US$ 3.68 billion
o Internal Rate of Return of 26.2%
·
18Mtpa Stage Two optional expansion
o Capital investment of US$ 1.87 billion
o Operating cost of US$ 24.9 / dmt FOB
o Total combined Net Present Value of US$ 7.36
billion
o Internal Rate of Return of 28.2%
2024 FS update study results
In 2023 the Company partnered with a
Chinese iron ore technical expert engineering firm ("Chinese EPC
Partner") as part of a process to update the economic evaluation of
the Zanaga 30 Mtpa staged development project.
Using the 2014 Feasibility Study's ("2014 FS")
infrastructure designs, flowsheets and material take off lists,
direct and indirect cost estimates were updated to current market
pricing using Chinese major equipment and contractor pricing for
both phases of 12 Mtpa Stage One haematite ("Stage One"), plus 18
Mtpa Stage Two magnetite expansion ("Stage Two") projects,
inclusive of buried concentrate pipeline and port
infrastructure.
2024 FS update results
|
|
Unit
|
Stage
One
12Mtpa
|
Stage
Two
+18Mtpa
(30Mtpa
Total)
|
|
Capital Cost
|
US$ m
|
1,935
|
1,871
|
|
Operating Cost (Average, Life of
Mine)
|
US$ /dmt
|
31.5
|
24.9
|
|
Net Present Value
|
US$ m
|
3,681
|
7,357
|
|
Internal Rate of Return
|
%
|
26.2
|
28.2
|
Note: Iron ore prices based on AME Group's long term real iron
ore price forecast for 65% Fe IODEX. Operating costs exclude
royalties payable.
These results compare favourably
against the previous 2014 FS capital and operating costs estimates,
as outlined below;
|
|
Unit
|
Stage
One
12Mtpa
|
Stage
Two
+18Mtpa
(30Mtpa
Total)
|
|
Capital Cost
|
US$ m
|
2,219
|
2,489
|
|
Operating Cost (Average, Life of
Mine)
|
US$ /dmt
|
32.1
|
25.7
|
Since 2014, the Company has
conducted a number of technical and economic review exercises using
third party western technical consulting firms, which resulted in
high level estimations of the costs to develop the project at that
time, but only to a Preliminary Economic Assessment (PEA) or
Pre-Feasibility Study (PFS) level of definition. Today's 2024 FS
update has been concluded to a higher degree (+/- 20% accuracy)
full feasibility study level of definition. In addition, the
results provided by ZIOC's Chinese EPC Partner have been
independently reviewed and validated by a third-party technical
consulting firm.
The Company believes these positive
results provide much greater confidence in the Project's economic
feasibility in today's market and cost environment, and with this,
provides a key catalyst for potential strategic investors to
consider funding of the next logical Project phase, being the front
end engineering and design (FEED) program to further define the
Project's physical elements and risk abatement
strategies.
Other ongoing investigations into
the establishment of hydro-electric power assets and mineral port
and their respective third-party investments are on schedule and
their results will be incorporated into the FEED
program.
Marty Knauth,
CEO commented:
"A large volume of work has been completed
during the recent six months by ZIOC, MPD Congo and our consulting
Partners, which I am very satisfied with. This detailed re-costing
study further demonstrates that the Zanaga Project provides
extremely robust returns for investors and significant
infrastructure assets and positive legacies for the Government and
people of the RoC. During recent engagements with RoC Ministries,
communities and potential strategic investors, the burden of being
the first mover in the region of high grade, low impurity iron
concentrates for green steel production, is strongly supported and
makes for an exciting future for Zanaga.
From this foundation, the upcoming FEED phase
will not only seek to validate and enhance our technical confidence
but critically, develop Zanaga's management plans around
environment, community, training, health, water, mine wastes and
ultimate closure. We believe these are equally as important as safe
and reliable engineering, and financial viability."
Clifford Elphick, Chairman of ZIOC
commented:
"I am delighted with the results of our 2024
Feasibility Study update, demonstrating the attractive economics of
the Zanaga Iron Ore Project in today's market environment. It is
exciting to have secured updated pricing for the development costs
of the project from experienced Chinese partners with extensive
experience in iron ore process plant and slurry pipeline design and
engineering.
We look forward to presenting these results to
the various strategic partners we have been engaging with and
advancing our discussions further with them as we look to progress
towards front end engineering and design of the project"
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
The Zanaga Iron Ore Company Limited
LEI number is 21380085XNXEX6NL6L23.
For further information, please
contact:
Zanaga Iron Ore
Corporate Development
and
Andrew Trahar
Investor Relations
Manager
+44 20 7399 1105
Liberum Capital Limited
Nominated
Adviser
Scott Mathieson, John More
and Corporate Broker
+44 20 3100 2000
Shard Capital Partners LLP
Corporate
Broker
Damon Heath
+44 207 186 9952
About us:
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.
A major Project update has recently been
concluded to freshen historical studies in light of changes in the
world's economy and growing demand for low-carbon steel production,
for which the Zanaga resource is highly suited, with the potential
to become one of the largest producers of high grade premium pellet
feed iron ore.