Member Info for Jiving

And we know that the EPP is being worked on in particular the part of the existing rail track we would use is to be 'rehabilitated'. Thanks to Vet10 unearthing the local RoC Fedmines Rapport Federation Report of 2024, which included Zanaga in its updates we find in our section P.19:

"- Poor condition of the railway infrastructure between Mossendjo and Dolisie (track to be rehabilitated for the test phase or the Early Phase Project (EPP) phase)"

https://www.unicongo.cg/wp-content/uploads/2024/11/Mines-Solides-Rapport-Federation-AG-2024.pdf

Which suggest the EPP is alive & kicking, seemingly as part of the overall full development plan. If this were the case then this would also impact the figures in the 2024 Feasibility Study by producing cashflow earlier than expected in the development plan - increasing IRR & NPV as a result.

My interpretation is they are launching a bid process specifically to "... assemble a construction consortium..." ie a buy-in, but IMO this could easily develop into a bidding contest for a full buyout. In those circumstances I believe they would negotiate a buyout price for the full Zanaga project with Elphick & the BOD which would then translate into an agreed share buyout price for ZIOC.

It also looks to me highly likely that if you tally up the % shareholdings of the new investors together with Elphick, management & possibly the remainder of the Garbet syndicate that they will hold over 75% - so any buyout bidder would have to secure their assent for a price to secure control, ie it could not be obtained by making an open offers in the market. I note that Anglo when it bought Minas Rio for $6b, negotiated a price with the 55% owner first which was then offered to all shareholders once it had been agreed with him.

I have maintained for the last couple of months that the "..Company's strategic partner process..." mentioned in the RNS of 2 January 2025 could indicate an action/bidding contest similar to that held for Simandou in 2019, and now we the description a 'formal bid process' in print. It may initially be presented/organised for"... establishing a construction consortium for the Zanaga Project.." but could easily turn out to also involve full buyout offers for the entire project. Whatever it ends up being, the bidding process will ensure we get the best price for a buy-in or buyout, & it takes place when all the various value enhancing studies have been incorporated into the final development plan.

Also worth noting the RNS quote by Mark Cutifani, speaking on behalf of Greymont Bay, commented:

"Its low operating costs and integrated slurry pipeline logistics mirror the efficiency and infrastructure-driven advantages seen in assets like Anglo American's Minas Rio, which successfully scaled into a leading global supplier."

Minas Rio - roughly comparable in ore quality & size to Zanaga but with a way longer pipeline - was acquired 'off-plan' as a greenfield site by Anglo in 2014 for a reputed $6b payment to secure 100% ownership of the mine.

https://www.mining.com/anglos-minas-rio-the-most-expensive-iron-mine-on-the-planet-82312/

MAJWandCo an actual historic figure & NPV is NOT a 'fantasy figure' but the the definition of a real figure as found in the IPO prospectus, as is the accompanying fact that it was institutional investors who set that price/valuation.

Remember back at IPO in 2010 (issue price 156p; valuing 100% of Zanaga at $1.4b) this was primarily an institutional share. The 18 March meeting will now very likely now draw in mining analysts & specialist fund managers - exactly what is needed to kickstart institutional interest in the share - again.

There are so many 'inside' possibilities with this group, they are going to bring in a lot of direct key contacts. IMO they are looking for a rapid turn by using those contacts to get a deal asap. No Glencore & 80% of offtake are huge positives - before strategics had to deal with 2 parties - ZIOC regarding equity & Glencore regarding offtake - now they just deal with ZIOC for both. The positive ramifications are growing on me after the initial shock.

Also we get 80% of the offtake back, which as we know is critical to drawing in many strategics. It is not clear what the financial details/implications are of the 20% of offtake that has gone to Gulf Iron and Steel (GIS) - will that kickstart EPP & then Stage 1?

Why would there be any sellers, these are long term industry holders with strategic stakes no shares have gone to retail?

Exactly so nibj, that was what caught my attention as well."... and commence a formal bid process aimed at establishing a construction consortium for the Zanaga Project ." This of course is how to maximise value.

We have also gained back 80% of the offtake. Which obviously makes it way way easier to cut equity/offtake deals with strategic investors.

From the Mitsui news release today;

"Iron ore produced at Rhodes Ridge will be blended into the ore sold by Rio Tinto and planned to be exported to countries in Asia including Japan."

https://www.mitsui.com/jp/en/release/2025/1250897_14855.html

RTZ announced a pre-Feasibility Study in December 2023, has it been completed?https://www.riotinto.com/en/news/releases/2023/rio-tinto-progresses-rhodes-ridge-to-next-study-phase

This is an RTZ news release today "noting" the Mitsui purchase from its JV partners;

https://www.riotinto.com/en/news/releases/2025/rio-tinto-notes-mitsui-has-agreed-to-join-rhodes-ridge-joint-venture

The headline figures are stunning - over $5 billion for a minority stake in a greenfield project that does not yet even have a full FS. Higher than average Pilbara ore quality but not DRI quality, of course the positives are Australian jurisdiction & RTZ as developer/operator. Nevertheless what fantastic timing for us, as we seek to finalise terms with strategic investors - the case for a high valuation is now being illustrated in real time with transactions taking place in public.

This is the second major Japanese purchase of an iron ore greenfield project in the last 3 months, following on from Nippon Steel’s purchase of a minority stake in Champion Iron’s Kami mine. To secure that stake Nippon Steel paid 92% of NPV upfront with potentially more to follow - the shortage of higher quality iron ore projects is prompting buyers to move fast & pay high. In such circumstances it is highly likely we could have multiple suitors.

Mitsui seems to have negotiated with the two JV partners of RTZ rather than with RTZ directly. As they do not yet have a full Feasibility Study they likely had to negotiate around RTZ’s 2023 pre-FS, which did not publicly disclose NPV or IRR. There is no share price involved, the parties presumably haggled over future valuations for NPV/IRR based on the pre-FS. This is exactly the process underway for Zanaga - our share price is an irrelevance, the final price (buy-in or buyout) will be based entirely around the valuation metrics produced in the 2024 FS (perhaps amended upwards if pelletisation is incorporated into the Development Plan).

MM the ChatGPT valuation figures are fascinating. The first set giving a Zanaga valuation of $7.78b, is extremely close the the 2024FS Stage 2 NPV of $7.36b. The Nippon Steel/Champion Iron showed the Japanese to be paying 92% of NPV upfront with extra payments to follow based on certain targets - probably 100% of NPV if they are met. We do not have NPV for Mitsui’s transactions, but it looks like they are paying a high valuation for what they are buying.

The second set of figures of $9.34b making allowance for a DR quality premium is also highly pertinent, as ZIOC is highly likely to be working with PSEI not just on a benefaction facilities but also producing pelletised product. If that is the case then this would have implication for the 2024 FS, potentially similar to this suggested by your 20% DR premium & the higher NPV of $9.34b, and our promised Development Plan may well incorporate pelletisation & even higher NPV figures in an upward revision to the 2024FS.

ZIOC in its 'About Us' blurb at the bottom of every recent RNS now states: “…with the potential to become one of the largest producers of high grade premium pellet feed iron ore.” The RNS on 1 July covers this, namely the optimisation study to be undertaken by the Chinese EPC partner (ie PSEI) using “unique technology” to “provide further capital and operating cost savings beyond the results of the 2024 FS Update.”

This is corroborated by the PSEI release of 21.01.25 this looks like including not only the benefaction plant but also potentially a cold pellet plant - so producing for export actual DRI quality pellets.

"The design of the benefaction plant and pipeline FEED will be launched in 2025. The supporting cold pellet technology is also recognised by the owners. The research design of the pellet factory will also be completed by PSEI."

That statement was from 16 October 2024, upon the publication of the Prospectus regarding the previous fund raising.

This was superseded by the statement of 30 January 2025 that accompanied the last fund raising, that statement gave no timeline for an out-licence or option deal:

"The net proceeds of the Placing will be used by the Company primarily to progress ongoing partnering discussions for its NXP002 programme, an inhaled treatment for idiopathic pulmonary fibrosis (IPF) and progressive pulmonary fibrosis (PPF), as well as to provide funding for general corporate purposes."

Something more on noteworthy 'links' with Chinese banks.

On 23 May 2024 according to PSEI, Marty presented a Bankable FS in Beijing to the following:

"The Chamber of Commerce has attracted more than a dozen large state companies and listed companies in China to participate. All parties are very active and attach importance to project investment financing. "

On 2 August 2024 the Saudi PFI signed a $50 billion series of MOU's with 6 Chinese financial institutions, all of whom have their HQ in Beijing & are wholly or partly state owned. Five of those institutions are involved in construction, export-import loans/guarantees & project finance; ie specialist institutions who would be involved in major mining projects, namely: Bank of China, China Construction Bank, China Export & Credit Insurance Corporation, Export-Import Bank of China and the Industrial and Commercial Bank of China.

"The MOUs cover areas of cooperation such as encouraging two-way capital flows through both debt and equity,.."

https://www.globaltimes.cn/page/202408/1317279.shtml

Thanks Trombone I think he also mentioned something to that effect in his TG session a year ago. There simply is not the money to pursue 004 at the same time as 002.

Meant to include a link, this was brought up before but is likely still relevant: https://synapse.patsnap.com/article/astrazeneca-and-merck-sue-to-block-generic-lynparza

Re-NXP004 - Astra & Merck have strengthened their patent position with Lynparza/olaparid & are also taking a very hard legal position with possible new competition from repurposed olaparid patents. It might be tactically best to focus on NXP002 before potentially taking on a legal battle with Astra & Merck combined.

More relevant information from the Champion Iron & Nippon Steel archives.

The Nippon Steel presentation on P.4 sets out why they are particularly targetting Kami, similar criteria could also apply to the Zanaga project, interestingly they stress the importance of hydroelectric power supplying the mine.

“High grade with low levels of silica & alumina

Location where hydroelectric power can be used”

To understand how few current iron ore deposits meet the test for the required DRI they have drawn up a helpful graphic representation on P5. This 'names & shames' those deposits that don't meet the required grade.

https://www.nipponsteel.com/common/secure/en/ir/library/pdf/20241219_200.pdf

Nippon Steel 30% = 2.7 mtpa, so in terms of base pig iron that produce under 2m mtpa. Compare that to their current steel production of 66 mtpa, aiming for 100 mtpa by 2030 - so they still likely require much more.

In a related Q & A with senior Nippon Steel managers on 19.12.24, they observed the following on other projects;

Q. Few mines produce DR-grade iron ore. Apart from this project, are there any other

investment projects in mines that produce DR-grade iron ore?

A. As you know, there are very few competitive new projects like this one, which is why we

decided to participate. We are aware that there are several DR-grade iron ore mine projects

under consideration by others, so we are trying to gather information on them.

https://www.nipponsteel.com/en/ir/library/pdf/20241219_200_QA.pdf

A January 2025 interview with Michael Marcotte, Senior VP at Champion Iron, some quotes:

“The Kami Project hasn't passed its feasibility study yet, and Marcotte estimates they'll need a $4 billion investment to get started.”

"What these partners are really after is the product. So they currently buy some of our product, but they do see that product being quite scarce in the economy of tomorrow," said Marcotte.

“Marcotte said there is global interest in securing high-grade iron ore at a time when governments and businesses are trying to decarbonize.”

https://www.cbc.ca/news/canada/newfoundland-labrador/kami-project-nippon-sojitz-deal-1.7430522

In trying to assess what we are actually worth in the real world of mining transactions, we have lacked current greenfield 'comparables' we could equate with Zanaga. Well now we have one with the Nippon Steel led investment in a minority 49% stake in the Kami Ore project they purchased from Champion Iron. Now this was announced in December 2024 but the various press releases did not state the important stuff like what discount they paid to NPV or focus on the IRR & the overall project cost per 1 mtpa. Of course Kami has advantages over Zanaga - its in Canada not RoC & has proven miner Champion Iron in charge of mine development & operations. But Zanaga has a lot of advantages over Kami in terms of the later development state/stage; NPV & just look at the IRR difference: ZIOC nearly 3x using the Stage 2 IRR of 28.2%. Working from Champion Iron & Nippon Steel information sources given below I have got the answers.

1. Discount to NPV for a 49% Minority Stake. In their 2024 pre-feasability study Champion Iron released on 14 March 2024 (so some 9 months from PFS to deal announcement)revealed over a 25 year life @ 9 mtpa the project would have an NPV of C$541m (US$416m) & a post tax IRR of 9.8% (PFS P 1-31). We know from Nippon Steel's detailed releases that they paid a pre-production total of C$150m for a 30% stake and trading house Sojitz paid CS95m for 19%, so a total of C$245m for 49%. Versus a 2024 PFS NPV of C$541m the Japanese paid 92% of NPV but a footnote reveals Champion may receive further future payments once production begins - so in practice the Japanese have paid 92% of NPV up-front & possibly closer to 100% once production begins.

2. Overall Development Costs to Production. For such a small mine the size of pre-production investment required is stunning - 9 mtpa, 67.5% FE, estimated 25 year life, production due 2030-2031 - Champion give C$4 billion (US$2.8b), whilst Nippon Steel imply a lower development cost around C$3.6b. Using Nippon Steel's figures they estimate a total cost (equity plus development cost) to them of C$1160m (US$813m) to production. Now this is for 30% of 9m or 2.7 mtpa, so upfront total cost of US$311m per 1 mtpa to get to first ore shipment. A couple more production cost figures over the life of the mine - Total Cash Cost per ton = US$58.5; Total All In Cost (AISC) per ton = US$68.9.

https://www.nipponsteel.com/common/secure/en/ir/library/pdf/20241219_200.pdf

https://www.championiron.com/wp-content/uploads/2024/03/2024-03-14-champion-iron-pre-feasibility-study-for-the-kamistiatusset-kami-iron-ore-property.pdf