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(Alliance News) - Zanaga Iron Ore Ltd made "significant" progress during 2018, the company said Thursday, as it looks to develop the its namesake iron ore deposit in the Republic of Congo.
Zanaga is looking at producing a million tonnes a year of high-grade iron ore pellet concentrate, or pellets, in an early production phase.
Following that, stage one production is seen at 12 million tonnes a year rising to 18 million tonnes a year in stage two.
To put that forecast in perspective, FTSE 250 iron-ore pellet maker Ferrexpo PLC produced 10.5 million tonnes of iron ore pellets in 2018.
Zanaga is set to finish the evaluation process for the Zanaga project during the second half of 2019.
It has completed "substantial" plant technical work, chosen its preferred mining contractor, and come near to sorting the project's proposed logistics.
On the financial side, Zanaga's pretax loss in 2018 was USD1.9 million, widened from USD1.4 million in 2017, with no revenue produced either year.
Non-Executive Chair Clifford Elphick said: "I am pleased to report to shareholders on the significant progress made by the project team in progressing the Zanaga project in 2018. In addition, the environment for tier one iron ore projects has significantly improved.
"The combination of a rise in benchmark iron ore prices as well as a simultaneous expansion in premiums for high quality iron ore products, driven by China's push to reduce environmental pollution, has led to more favourable conditions for the Zanaga project."
"The project team have been actively preparing the project for this resurgence in iron ore prices and their focus on the need to position Zanaga's iron ore product at the higher end of the global iron ore market is bearing fruit. The focus of Zanaga's early production project remains to produce iron ore in a shorter period of time, at low capital cost, utilising existing brownfield logistics solutions," Elphick continued.
"We look forward to providing further updates to shareholders as results are received from the current study work programmes and conclusion of Jumelles' evaluation process on the early production project."
Zanaga shares were 4.4% lower on Thursday at midday in London at 6.95 pence each.
