Zanaga Iron Ore Company Limited Share Chat (ZIOC.GB.PL)

Dubai > Brazzaville > Pointe Noire > Brazzaville > Libreville > Luanda?

EPP export options? AD Ports and Vale?

Recall that ZIOC have been majoring on Congo for the EPP, very likely for political reasons:

· Early Production Project ("EPP Project" or "EPP") remains under investigation

o Multiple production scenarios remain under investigation on processing facilities and suitable logistics solutions, with a focus on an export solution through the Republic of Congo ("RoC").

> However previously the company had a preference for the Gabonese route, i.e. JCB and sift, truck to Franceville, and then rail to Libreville. I don't think such sensitivities would apply to the likes of Vale in a JV with AD Ports.

https://www.lse.co.uk/rns/ZIOC/zioc-2023-annual-results-announcement-ttfiqmzkg6vd8ax.html

They are full of s. I don't think you can quote anything the company has said with much faith. Shares are a write off imo.

On the other hand:

The company are now debt free and have cash in hand for 6 months+. That's more than enough to see us good until FEED is financed, and FEED itself is due to start round about the end of September.

Plus, PIs can now buy where Glencore and Elphick did which I figure gets them off the hook for when the SP rockets on finance news.

I'm very chilled...

>>"Dubai > Brazzaville > Pointe Noire > Brazzaville > Libreville > Luanda?

EPP export options? AD Ports and Vale?.."

Neither, AFAICS.

EPP first :

Cross-border > Gabon has become, if anything, more problematic since ouster last year of Big Den's relative-by-marriage and fellow Freemason Grandmaster Ali Bongo; rail capacity Franceville> Libreville/Owendo is limited and freight capacity expansion underway 12mtpa > 19mtpa will likely be taken up by Bakiama's initial 5mtpa target. The trucking of iron ore Zanaga to Franceville is also 'challenging'. Apart from manganese, its freight also includes uranium, iron ore and TIMBER.

Vale may be agnostic, but AD Ports will be interested in a Congo/Pointe Noire solution.

Re flts : Given the above, the relevance of destinations Libreville and Luanda to your speculation re Vale/AD Ports discussions and a ZIOC context is hard to see.

HB-IIW appears to have sat around in AbuDhabi since 2nd July and PP-FCC (owned by Asperbras, the known timber trader) HAS been shuttling between Brazzaville, Libreville and Franceville, but left for Cascais today.

Asperbras, of course, itself has a presence in Luanda -from whence it funnelled funds to Lula's election campaign - and where (true to form ?)- it's been accused of double-invoicing /over-charging on bus-supply contracts .

https://angola24horas.com/politica/item/8398-governo-compra-3-000-autocarros-escolares-com-suspeita-de-superfaturamento

Maybe Asperbras is also the owner of your mystery jet....and further speculation is idle ?

Ho hum

While most of us would prefer a blockbuster buy out so we can count our winnings, the EPP could well be an intermediate step that bypasses a number of issues: finances primarily however it would also allow an incoming Strategic/Consortium to feel their way into doing business with Brazzaville.

In various releases the company have detailed 1mtpa+ of DSO for up to 7 years. Direct Shipping Ore is great stuff. It does what it says on the tin; at surface (just needs a JCB and screening), transport to coast and shipping. Thereafter it is of the size and quality that it can be heaved straight into existing blast furnaces. As such it trades at roughly the same price as 65%Fe fines, or c.$125-130 at present. If we say $50/t cost at quayside and $15/t to ship to Europe then we arrive at a very tasty $60/t on that 1mtpa.

CapEx is a likely $10m, some of which could come from development finance if not wholly financed by an off-taker.

The point is that ZIOC could clear $50m pa whilst the staged project is being built out. This would mitigate all manner of risks and concerns. The BoD must be considering it.

https://www.zanagairon.com/wp-content/uploads/2023/11/Zanaga-Investor-Presentation-1-Nov-2023-1.pdf

If after all this we are only left with a DSO, it would be desperately sad..

Talk of (and action on) an EPP would (maybe) serve to signal to third parties that 'we have options'...and to C-B that ZIOC was taking steps to protect its license for the 2 years between announcement of start of FEED and completion 15 months later (per MK). I've listened again and he's confident on the timeline.

This takes us to 2026, when C-B 's next Presidential elections are due : Big Den is probably barred constitutionally (technically by law and physically by age...but cf Biden...), but that's a big political unknown.

The mood isn't good . This editorial , from depeches on 8th July, gives a flavour. Note that the editor used to be considered a Big Den mouthpiece :

.."To date, even if potential candidates have not yet breathed a word, the web is revisiting the issues that

that could dominate the next major electoral campaign . Without being exhaustive, the concerns

below give a general idea of their scope.

Growing urban insecurity, the age-old issue of youth employment , the current economic situation and its corollary,

foreseeable social tensions, uncertain water and electricity supplies, the hoped-for improvement in living environment, the expected improvement in health issues, and the overhaul of the education system, external relations and their implications in terms of in terms of strengthening Congolese diplomacy, national cohesion and the willingness of

partners, all of which are essential to the implementation of the reforms that the country needs to move forward, this body of concerns around which the reflections of some and thoughts on the web speak volumes...."

I take it you're not proposing delivery to PN ?, the reference to AD Ports.

The logistics of delivery of anything to Franceville remain considerable, IIRC someone years back (atg ?) pointed to its challenges - over a mud road, with seasonal issues.

Even 1m tpa on 40ton trucks would entail delivery of 3,000 tons per day @ 350 days pa, a minimum 75 truckloads, so probably 100-150 trucks (capex) for the cycle (consumables opex).

I can't see $ 50 /t cost at quayside (the above + freight Franceville > Libreville / Owendo)being realistic.

See the recent post re Bakmla (which has a short drive to the Franceville railhead for comparitives):

It's at a similar inflexion point to ZIOC , and also pursuing a go-it-alone strategy, made possible by low capex/low -tech approach.

It's close to the Franceville railhead and available 'green' hydropower, has reasonably high quality ore, target production of 5mtpa and 4 x short-life offtake MoUs with Chinese co's, including Bao Wu.

Also : a USD 10M royalty agreement with Anglo American and some interesting economics, including a claimed 38% IRR...

https://www.genmingroup.com/investors/presentations/

and

https://wcsecure.weblink.com.au/pdf/GEN/02770418.pdf

I don't understand MK's confidence and your ref to flights, Vale and Luanda.

GLA

Oops! Typo on re-read : for Bakmla, read Baniaka...

Can we put the EPP notion to rest, pls ?

When you write .." DSO trades at roughly the same price as 65%Fe fines, or c.$125-130 at present. If we say $50/t cost at quayside and $15/t to ship to Europe then we arrive at a very tasty $60/t on that 1mtpa.

CapEx is a likely $10m, some of which could come from development finance if not wholly financed by an off-taker.

The point is that ZIOC could clear $50m pa whilst the staged project is being built out..."

I think you're comparing apples with oranges : a high capex/relatively low opex Zanaga Phase 1(12mtpa), with minimal logistics costs (slurry pipeline to port) , and a lower capex/much higher opex EPP interim solution, without economies of scale (EPP, 1mtpa).

A more valid comparison AFAICS is with costings based on Baniaka's in-between 5mtpa 'cheap and cheerful' approach see https://wcsecure.weblink.com.au/pdf/GEN/02604822.pdf .

From page 7, note its proximity to existing power and railhead vs Zanaga (at bottom of map), former approx 40K from Franceville, passing existing hydropower, on established roads, close to Comilog's human and technical resources at Moanda.

Compare that with Zanaga's unsupported location in the boondocks, 150 - 200Km via Mayoko, dirt roads, no infrastructure, power or processing.

Then - p 9 - consider (even with their proximity and infrastructure advantages), Baniaka's est. capex (power infrastructure $ 20m, haulage fleet and rail siding $45m) ; their mine-gate costs of $ 18 per dmt and their ex-mine logistics costs of $ 42 per dmt, total $60 per dmt to quayside.

On a learning curve and without the benefit of existing resources and economies of scale, I question whether a ZIOC EPP costing would be less than $80-$100 per dmt at quayside.

For me, the comparison highlights the major advantage that ZIOC has over other up-country projects (be it Baniaka or Simandou) in its slurry pipeline access to the sea : $2.4 per dmt is a phenomenal - and hopefully compelling- contribution to the investment case.

AFAICS