Strong project economics confirmed following completion of DRI process plant cost

Zanaga Iron Ore Company Limited (AIM: ZIOC) We are pleased to announce the successful completion of the Project Development Strategy Program (the “Program”), which now includes the results of the technical and commercial evaluation of the process flowsheet to produce premium quality Direct Reduced Iron (“DRI”) pellet feed concentrate.

The Program has 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 additions since the start of the Program in March 2025.

background

In March 2025, the company launched the program with the ambition to provide value addition to the project through enhanced product quality, improved thickened tailings solutions and pipeline development solution options. The objective was to achieve updated technical cost estimates and economic results capable of being provided to strategic investors, lenders and financiers.

The first key objective was to explore the ability 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 basis for the next phases of work, most of which were completed and announced in January 2026, but at that stage ZIOC still did not have updated estimates for the newly designed DRI process plant. Today, as the final phase of the program, results from the DRI process plant have been completed and incorporated into an updated financial model and economic assessment.

The program has achieved all of its most important objectives, and now provides a clear pathway to begin the detailed engineering process ahead of a final investment decision (“FID”) recommendation, targeted for mid-2027.

Workstreams now completed include:

• Confirmation of DRI Product Quality Capability in Phase One and Phase Two
• Completion of Cost and Feasibility:
  • Modular Hematite Processing Facilities for Stage One;
  • Thick and dry tailings facilities for both stage one and stage two; And
  • An alternative single 30 million tonne per annum (“MTPA”) pipeline during Stage One (April 2026 case providing an attractive alternative option to the two-stage pipeline plan).
• Update of specific project costs through Original Equipment Manufacturer (“OEM”) inquiry process
• Assembly of constructor engagement program for the project

updated project economics

The completion of the program has increased confidence in the project’s economic prospects, which are now updated and accurate to the end of December 2025:

Highlights of the April 2026 case(1)(2)

• Phase one capital expenditure estimate: US$2.17 billion
• Phase one net present value (“NPV”): US$2.54 billion (increased by approximately 30.9% versus the 2024 feasibility update)
• Stage One Internal Rate of Return (“IRR”): 22.5% (vs. 21.4%)
• Combined phase one and two capital expenditure estimate: US$4.05 billion
• Combined phase one and two NPV: US$4.90 billion (increase of 29.4%)
• Combined stage one and two IRR: 24.3% (vs 23.0%)
• Processing, filter plant and product handling costs: US$11.95 per ton of concentrate

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

“ completion of DRI Flowsheet Cost and OEM Study Are A Milestone achievement for the company and important for zanagain it this The results confirm this integrated DRI-Production, Modular hematite concentrator design, incorporating deep stitching technology, dedicated line pipe And importantly focus on handling features Increase Project value while maintaining strong returnss and strategic optionality.

“This is combined with a modular approach, disciplined capital management and strong manufacturer The engagement positions the project as a highly competitive, future-facing iron ore development globally decarbonization trend.

“Encouragingly, our projected economics are continuing to improve with each additional study element we complete, providing confidence in our growth path “We are working towards a final investment decision in 2027.”

Clifford Elphick, Chairman Zanaga Iron Ore Company Limited commented:

“The completion of this strategy program represents a significant milestone for Zanaga, reinforcing confidence in the strong economics and long-term value of the project.

As demand for high-grade, low-emission iron ore increases, we believe Zanaga is well-positioned to play an important role globally.

The Board is focused on moving forward toward a final investment decision in 2027.”

Strategic Advancement for DRI Product

Following the completion of successful laboratory-scale DRI test work in mid-2025, ZIOC began detailed conceptual and feasibility-level designs to refine capital and operating cost estimates to ±20% accuracy.

The updated growth strategy includes:

• 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
• Thick Tail Storage Features
• A 12Mtpa filter plant and covered concentrate handling facilities

The company’s DRI product strategy positions the Zanaga project to benefit from:

• Demand for premium iron ores, especially DRI grade iron ore, is increasing
• Decarbonization of the global steel sector through increased electric arc furnace (“EAF”) steel production
• Strong position in lowest cost quartile of iron ore producers

Phase One Processing Facility Capital and Operating Costs Overview

The updated Stage One processing capital expenditure estimate (April 2026 case(3)) adds approximately US$753.7 million for processing, filtration and concentrate management facilities, contributing to the 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 ton of concentrate (5).

While Stage One processing operating cost and capital expenditure estimates are modestly increased compared to previous studies, the inclusion of the DRI-grade product premium improves the project’s Stage One NPV by approximately 31% relative to the 2024 feasibility study update.

Strong financial metrics

Investments in DRI-producing flowsheets demonstrate strong value creation, as shown below:

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

OEM and contractor appointment

As part of the programme, extensive engagement took place with leading Chinese OEMs and manufacturing groups during 2025, enabling the company to:

• Pre-qualify equipment suppliers and contractors
• Identify lump sums and other cost structures for key equipment and construction areas
• 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.

Alternative Single Stage One 30MTPA Pipeline

Building on the 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 stage two to expand to a total production capacity of 30Mtpa. However, the single 30Mtpa pipeline system is potentially beneficial to large strategic investors looking to rapidly expand production capacity to 30Mtpa, as it eliminates the need for a second pipeline installation, thereby simplifying the permitting process, reducing environmental and community impacts, and significantly reducing financing needs in the second phase of expansion.

A My Life comparison between a twin-pipeline system (covered in the April 2026 case) and an alternative single-pipeline system is summarized below:

2026 and 2027 Work Program and FID’s Path

Major milestones include:

• Updated mineral resource and reserve modeling
• Bulk sampling and pilot-scale metallurgical testing
• Completion of Environmental, Social and Health Impact Assessment (ESHIA)
• Completing the design and cost of non-process infrastructure
• Definition of Operating Phase System and Related OPEX
• Updated Financial Modeling and Project Economics

The FID gating process is expected to begin in early 2027, coinciding with the investor consortium’s milestone of receiving 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 Arch Minerals, announced on 10 February 2026, with a number of key conditions now met 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 Arch Minerals continue to work toward finalizing binding transaction agreements and completing technical due diligence. The final transaction agreements are now targeted for completion during July 2026.

Once a binding transaction agreement has been entered into, the closing will be conditional on shareholder approval and any required regulatory approvals. A shareholder circular containing further details of the transaction, together with the notice convening the EGM, will be published in due course of time after the execution of the definitive documents.

The Directors remain confident of the strategic appropriateness of the Transaction and the expected value it will deliver to shareholders. Further updates will be provided as appropriate.

An updated corporate company presentation will also be made available on the company website shortly Here.

For further information please contact:

About ZIOC:

Zanaga Iron Ore Company Limited (AIM ticker: ZIOC) is an iron ore exploration and development company whose principal asset is the 100% owned Zanaga Iron Ore Project located in the Republic of Congo. Government mining licenses, environmental permits and mining conventions are all in place for the project.

The Zanaga Iron Ore Project is a globally significant asset with 6.9 billion tonnes of resources and 2.1 billion tonnes of reserves, targeting production of 30Mtpa 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 largest iron ore mines in the world. With all key permits secured, Zanaga is well positioned to profit from growing demand for high-quality, low-impurity iron ore, supported by low operating costs and an efficient slurry pipeline to the port.

In the context of the global transition towards low-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.

Zanaga Iron Ore Company Limited LEI number is 21380085XNXEX6NL6L23.

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