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So, did the newly-formed ADQ-Orion Resource Partners, with their interest in metals and mining, off take finance, Africa and high grade iron ore, make a late-in-the-day proposal to ZIOC?

Might they have made an offer to fund FEED in return for supply of high grade iron ore?

Did this cause a review of what the company intended to RNS and detail at the Investor Briefing?

BINGO

ADQ ORION RESOURCE PARTNERS - INVEST IN METALS AND MINING - AFRICA - OFF TAKES - HIGH GRADE IRON ORE

Abu Dhabi Sovereign Wealth Fund ADQ forms JV with Orion Resource Partners, 'to invest in metals and mining companies and to acquire the physical offtake of strategic materials crucial to supply chain security ... initially focusing on ... Africa...investing in mining companies through multiple asset classes, including equity, senior debt and production-linked instruments, such as royalties, streams and offtakes...As part of its investment strategy, Orion Abu Dhabi will secure long-term agreements to source essential minerals, including copper, high grade iron ore....'

30 January 2025 - ADQ AND ORION RESOURCE PARTNERS TO ESTABLISH USD 1.2 BILLION ABU DHABI-BASED JOINT VENTURE TO INVEST IN AND SECURE THE SUPPLY OF STRATEGIC METALS AND CRITICAL MINERALS

> Orion Abu Dhabi is a 50-50 joint venture established to invest in metals and mining companies and to acquire the physical offtake of strategic materials crucial to supply chain security

> It will target investments in a range of metals and minerals in various geographies, initially focusing on emerging markets across Africa, Asia and Latin America

> The newly formed entity will be established in Abu Dhabi Global Market, marking the opening of Orion Resource Partners’ fifth office globally

ADQ, an active global sovereign investor with a focus on critical infrastructure and supply chains, and Orion Resource Partners (“Orion”), a leading global investment firm specializing in metals and materials, have entered into an agreement to establish a new Abu Dhabi-based 50-50 joint venture that will make strategic investments in the metals and mining sector** to enhance supply chain security both locally and globally. The joint venture partners are committed to deploying an initial USD 1.2 billion of capital over the course of the first four years.

Based out of Abu Dhabi Global Market (ADGM), OMF (ME) JV LP (“Orion Abu Dhabi”) will work towards investing in mining companies through multiple asset classes, including equity, senior debt and production-linked instruments, such as royalties, streams and offtakes. The joint venture will target investments in a diverse range of metals and minerals in various geographies, initially focusing on emerging markets in Africa, Asia and Latin America.

As part of its investment strategy, Orion Abu Dhabi will secure long-term agreements to source essential minerals, including copper, high grade iron ore, and other key commodities important for global supply chain security and the energy transition.

https://www.adq.ae/newsroom/adq-and-orion-resource-partners-to-establish-usd-1-2-billion-abu-dhabi-based-joint-venture-to-invest-in-and-secure-the-supply-of-strategic-metals-and-minerals/

CERTAIN ONGOING WORKSTREAMS RELATING TO THE STRATEGIC PARTNER PROCESS

Our 11th February Investor Briefing was postponed almost on its eve. The company cryptically said that change, '... will enable the Company to further progress certain ongoing workstreams relating to the strategic partner process.'

What might the catch-all 'certain ongoing workstreams' actually involve?

First, the IB was postponed but so also were the promised, '...updates on Strategic partner process and project development strategy' - (note that via the company's twitter account, AT has confidently recommitted to these ahead of the rescheduled IB this 18th March, so news any day - see 1 below). This strongly suggests (to me) that whatever caused the IB to be rescheduled directly affects those 2 updates. If so it gives us a clue as to what to search for. Is there something that happened that could be the smoking gun?

Secondly, some insight. Late January and there were discussions with professional advisers. There was talk of significant (new) engagement that had to be considered. My view is that this was a late-arriving entity that warranted immediate consideration, and significant enough for the company to reschedule updates and briefings. FWIW, I think new Strategic interest can be ruled out on the grounds that all likely candidates would have be involved since the FS in April 2024 - (if not from prior to the Glencore restructuring in Nov '22 given Elphick's comments at that time).

If the above is the case then we could be looking for junior consortium interest, perhaps involving off-take and sweetened with early stage finance....

....there is one standout candidate.

1. https://x.com/Zanaga_Iron_Ore/status/1887795505545060440

I have my theory, but first why do accounts here think that the Investor Briefing was delayed from Feb 11 to March 18?

Hi always - I spotted their arrival by their broker code showing on the L2 quotes. They are 'INV.' Scrolling back I think they started coverage last Friday.

Hi Driving. I don't think 3m moves the dial for Investec. It might, perhaps, be the float for their market makers. Might. Nothing more.

I reckon they've started making a market in ZIOC as a way to preposition themselves for (imminent) news. As and when that drops (and it could be any day now) Investec have clients who could snaffle blocks of 10m.

Tomorrow might be interesting.

I don't think you can overstate the significance of Investec now quoting ZIOC.

It means they see value and will be actively prepping their clients to buy in.

Who are Investec's clients?

Investec is an Anglo-South African international banking and wealth management group. It provides a range of financial products and services to a client base in Europe, Southern Africa, and Asia-Pacific.

Investec serves a diverse clientele across various sectors, including private individuals, corporations, and institutions. Their services encompass private banking, wealth and investment management, and corporate and investment banking. Notably, in 2023, Investec Wealth & Investment merged with Rathbones, creating a combined entity overseeing £109.2 billion in assets.

Geographically, Investec has expanded its presence to regions like the Middle East, opening an office in the Dubai International Financial Centre in 2024. This strategic move aims to tap into the substantial wealth held by families and individuals in the area.

While specific client names are typically confidential, these developments highlight Investec's extensive reach and the trust placed in them by a broad spectrum of clients globally.

Q. Investec have just started quoting ZIOC. Is this significant?

ChatGPT said:

Investec's initiation of coverage on Zanaga Iron Ore Company Limited (ZIOC) is a noteworthy development.

As a leading broker in the UK small and mid-cap market, Investec's analysis can enhance ZIOC's visibility among institutional and retail investors, potentially influencing the company's stock performance. While specific details of Investec's coverage on ZIOC are not available in the provided sources, it's important to note that in 2013, Investec analyzed West African iron ore companies, including ZIOC, highlighting valuation disparities between undeveloped projects and producers.

This historical context suggests that Investec has been monitoring ZIOC's progress over time.

The initiation of coverage by a prominent broker like Investec often signals confidence in a company's prospects and can attract increased investor interest...

This is amazing - leading broker Investec have just started market-making ZIOC.

It was Investec who noted the "value abyss" in West African iron ore stocks, and name-checked Zanaga, and "the potential for quantum upgrades in all company valuations."

And now they are quoting ZIOC. If ever there was a tell-tale that a stock was about to be in play....

WEST AFRICAN IRON ORE COMPANIES "VALUE ABYSS"

Posted on 10 Apr 2013

In a recent Mining Sector Report by Investec’s Global Natural Resources team, a apparent disparity in West African iron ore company values is observed. There are a range of methods that can be applied to value the companies, such as the risked NPV model, however, according to Investec, looking at current market valuations, it appears that a more simplistic Enterprise Value per tonne (EV/t) method is being used and when examined, these multiples show that there is a “value abyss” between the undeveloped companies and the developed ones.

The aspiring producers Affero Mining, Bellzone and Zanaga are equally valued by the market at $0.04/t whilst current producers are valued 30-40 times higher...

Investec’s report concludes: “The market appears to be valuing the West African iron ore companies with a simple EV/t basis. Materials that feed a fully-financed production base are currently being valued at an average $23/t of attributable, recovered Fe units, while those that are unfinanced and show limited DSO potential are being valued more conservatively at $0.04/t. This therefore offers the potential for quantum upgrades in all company valuations..."

https://im-mining.com/2013/04/10/the-value-variance-between-west-african-iron-ore-companies/

and

Investec has achieved a leading position in the UK small and mid-cap (SMID) brokerage market. In the 2023 Institutional Investor UK Small & Mid-Cap Survey, Investec was ranked as the #1 broker overall, excelling in research, sales, corporate broking, and corporate access. Their research team secured top rankings across nine sectors, including capital goods, consumer goods, healthcare, leisure & gambling, media, retail, support services, technology, and utilities & clean energy. Additionally, eight of Investec's analysts were recognized as top in their respective sectors.

Furthermore, Investec serves approximately 140 public companies across all market sectors listed on the London Stock Exchange and AIM, including 33 companies in the FTSE 250 and three in the FTSE 100. They also act as NOMAD (Nominated Adviser) to 25 clients on AIM, with market capitalizations ranging from around £50 million to over £3 billion.

-

These accomplishments underscore Investec's significant presence and influence in the UK brokerage landscape, particularly within the small and mid-cap sectors.

...or put it this way:

Mitsui have just paid $5.34bn for a 40% stake in a 61.6% deposit that has yet to complete a preliminary Feasibility Study.

Compare and contrast that with Zanaga and ZIOC.

99icecream - on the valuation methodology from Rhodes Ridge this morning;

The price paid by Mitsui implies a value of $1.96 per contained tonne of Fe. ChatGPT extrapolates that straight across to Zanaga's 6.9 billion tonnes Resource at ~32% Fe.

This is obviously different to the NPV methodology used by ZIOC.

Interestingly this 'price per contained tonne of Fe' methodology is just the same as that identified by Investec back in 2013 when they analysed the valuation of West African iron ore prospects, name-checking Zanaga. Using this, ZIOC is currently nailed to the floor with the bare minimum enterprise value of $0.04/t (or c.7-and-a-bit pence). As Investec directly state (and using todays's Rhodes Ridge valuation), there is the potential for a "quantum upgrade" to (ZIOC) valuation.

> Essential reading:

WEST AFRICAN IRON ORE COMPANIES "VALUE ABYSS"

Investec’s report concludes: “The market appears to be valuing the West African iron ore companies with a simple EV/t basis. Materials that feed a fully-financed production base are currently being valued at an average $23/t of attributable, recovered Fe units, while those that are unfinanced and show limited DSO potential are being valued more conservatively at $0.04/t. This therefore offers the potential for quantum upgrades in all company valuations, should the respective companies be successful in bringing components of their planned production into fruition.”

https://im-mining.com/2013/04/10/the-value-variance-between-west-african-iron-ore-companies/

It does indeed. I need to try and pick apart the numbers!

After a coffee or two, several of thoughts come to mind following the Mitsui acquisition of 40% of Rhodes Ridge:

1. That Rio Tinto *didn't* buy out their junior partners, Mitsui & Co., Ltd. did.

> This implies that Rio want to share the development risk of such a large project, as per Simandou and other large mega-projects globally.

2. Rhodes Ridge reports an average grade of 61.6%, i.e. not even Pilbara Benchmark 62.0%.

> What have Rio in mind with which to blend up their depleting Pilbara grades?

3. The chemical composition of Rhodes ridge precludes any attempt to blend-up to DR grade.

4. Mitsui & Co., Ltd. have acquired 'almost' Pilbara Benchmark grade. This suggests that their commodity traders have secured what passes as 'high grade' for future iron ore marketing. If so, their steel makers, Mitsui&Co Steel ltd, have not secured DR-grade iron ore for Japan's Green Steel push.

All of which seems positive for whatever consortium structure wins out at Zanaga.

GLEN down 6.6% today, at least 5% worse than contemporaries. This despite launching a share buy back...

A chunk of change for Zanaga would help, as would a flow of royalties from DR grade iron ore. Just saying.

https://www.proactiveinvestors.co.uk/companies/news/1066500/glencore-ups-dividend-and-restarts-1bn-buyback-as-earnings-fall-1066500.html

£10.90 with DR Premium included

REVISED IMPLIED VALUE FOR ZANAGA, INCLUDING A PREMIUM FOR DR-GRADE IRON ORE

STEP 1: RHODES RIDGE VALUATION

Mitsui acquired 40% of Rhodes Ridge for $5.34 billion, implying a 100% valuation of $13.35 billion.

Rhodes Ridge Resource: 6.8 billion tonnes at 61.6% Fe.

Implied value per tonne of Resource = $1.96 per tonne.

Project Stage: Rhodes Ridge is at PFS stage (earlier than Zanaga).

STEP 2: APPLYING THIS TO ZANAGA

Zanaga's Total Resource: 6.9 billion tonnes at ~32% Fe.

Zanaga’s Reserve: 2.07 billion tonnes at 67.5% Fe (high-grade DR product).

Project Stage: Updated Feasibility Study (FS) completed, progressing to FEED.

If we apply the $1.96 per tonne multiple to Zanaga’s total Resource:

6.9 billion tonnes × $1.96 = $13.52 billion implied value.

STEP 3: ADJUSTING FOR IRON GRADE, DEVELOPMENT STAGE & DR PREMIUM

Iron Grade Discount: Since Zanaga’s Fe content is lower (32% in Resource, requiring beneficiation), we apply a 50% discount to adjust for the beneficiation requirement:

$13.52 billion × 50% = $6.76 billion.

Development Stage Premium:

Zanaga is more advanced than Rhodes Ridge (which is at PFS).

Projects move from PFS → FS → FEED, with risk decreasing and valuation increasing.

A 15% premium is applied for Zanaga’s more advanced stage:

$6.76 billion × 1.15 = $7.78 billion.

DR-Grade Premium:

Zanaga’s 67.5% Fe product is a premium DR-grade concentrate, whereas Rhodes Ridge ore is not DR-grade.

Direct Reduction (DR) iron ore commands a premium due to decarbonization in the steel industry, with strong demand from China, Gulf states, and Europe.

DR-grade ore typically sells at a 10-20% price premium over standard 62% Fe fines.

Applying a 20% premium to reflect its strategic value:

$7.78 billion × 1.2 = $9.34 billion.

STEP 4: CALCULATING PER-SHARE VALUE

ZIOC shares in issue: 675 million.

Implied Share Price = $9.34 billion / 675 million shares = $13.84 per share.

GBP Equivalent (@ 1.27 USD/GBP) = £10.90 per share.

CONCLUSION

By factoring in:

✅ Zanaga’s more advanced project stage (FS complete, entering FEED) → +15% premium

✅ Its 67.5% Fe DR-grade iron ore (higher value than Rhodes Ridge) → +20% premium

THE IMPLIED VALUATION OF ZIOC’S SHARE PRICE IS £10.90 ($13.84), SIGNIFICANTLY HIGHER THAN THE CURRENT 7P.

THIS SUGGESTS THAT ZIOC IS DEEPLY UNDERVALUED, LIKELY DUE TO FINANCING CONCERNS AND MARKET MISPRICING OF ITS STRATEGIC DR-GRADE PRODUCT AND ADVANCED PROJECT STATUS.

"If valued similarly to Rhodes Ridge, but accounting for Zanaga’s more advanced project stage, the implied ZIOC share price would be ~£9.08 ($11.53)."

> and this before adding a premium for Zanaga's DRI grade

ChatGPT:

IMPLIED VALUE FOR ZANAGA BASED ON RHODES RIDGE TRANSACTION

Step 1: Rhodes Ridge Valuation

Mitsui acquired 40% of Rhodes Ridge for $5.34 billion, implying a 100% valuation of $13.35 billion.

Rhodes Ridge Resource: 6.8 billion tonnes at 61.6% Fe.

Implied value per tonne of Resource = $1.96 per tonne.

Project Stage: Rhodes Ridge is at the Pre-Feasibility Study (PFS) stage.

STEP 2: APPLYING THIS TO ZANAGA

Zanaga's Total Resource: 6.9 billion tonnes at ~32% Fe.

Zanaga’s Project Stage: Updated Feasibility Study (FS) completed, progressing to FEED.

If we apply the $1.96 per tonne multiple to Zanaga:

6.9 billion tonnes × $1.96 = $13.52 billion implied value.

STEP 3: ADJUSTING FOR IRON GRADE & DEVELOPMENT STAGE

Since Zanaga’s Fe content is lower (32%), it requires beneficiation to produce 67.5% Fe concentrate (a premium DR-grade product). A 50% discount accounts for this lower in-situ grade, giving an adjusted value of $6.76 billion.

However, Zanaga is at a more advanced development stage (FS completed, entering FEED), whereas Rhodes Ridge is still at PFS stage. Typically, a project moves from PFS → FS → FEED, with risk decreasing at each stage, increasing valuation multiples.

A 10-20% premium could be applied for Zanaga’s more advanced development stage vs. Rhodes Ridge.

Adjusted Value (applying a 15% premium) = $6.76 billion × 1.15 = $7.78 billion.

STEP 4: CALCULATING PER-SHARE VALUE

ZIOC shares in issue: 675 million.

Implied Share Price = $7.78 billion / 675 million shares = $11.53 per share.

GBP Equivalent (@ 1.27 USD/GBP) = £9.08 per share.

CONCLUSION

If valued similarly to Rhodes Ridge, but accounting for Zanaga’s more advanced project stage, the implied ZIOC share price would be ~£9.08 ($11.53).

THIS IS VASTLY HIGHER THAN THE CURRENT PRICE (~7P GBP), REINFORCING THE VIEW THAT ZIOC IS HEAVILY UNDERVALUED, LIKELY DUE TO FINANCING UNCERTAINTIES OR SHORT-TERM MARKET PERCEPTION.

Thanks yogiananda. Of note is that at Rhodes Ridge Rio will now be partnered with Mitsui. At Simandou Rio are partnered with Baowu and Chinalco, whilst Chinalco are also Rio's largest shareholder.

For me it is.a racing cert that a pair of Strategics with be cornerstone investors at Zanaga. Rio plus one....

> Yahoo's write up details the high grade driver:

MITSUI JOINS RIO IN AUSTRALIA IRON ORE MINE FOR $5.3 BILLION

(Bloomberg) -- Japanese trading house Mitsui & Co. will buy a stake in an Australian iron ore project for $5.3 billion, in a bet that the global steel industry will need high-quality raw materials to support its push to go green.

The investment is a “crown jewel asset” in the metals-rich Pilbara region and Mitsui’s single-largest ever, President Kenichi Hori said in Tokyo. “After years of relationship-building spanning across generations, we were able to negotiate for this agreement,” he said.

The swoop on an untapped resource reflects major shifts in the iron ore market as China’s economy slows and steelmakers face a daunting task to decarbonize. While demand is growing at a slower pace than in the boom years of this century, more high-grade material is needed to produce steel with greener technology.

“The deal represents a continuation of the strong working relationship that Mitsui already has with Rio Tinto,” said MineLife Pty analyst Gavin Wendt. “The deal also ensures ongoing supply of high quality iron ore for Japanese steel mills.”

Rhodes Ridge is one of the world’s largest undeveloped iron ore deposits, with a mineral resource estimated at 6.8 billion tons. It’s expected to produce as much as 40 million tons a year in its first phase starting 2030, but Mitsui said future output could reach 100 million tons.

Rio has struggled to maintain production of superior quality iron ore grades in the Pilbara, and tapping the relatively iron-rich deposit at Rhodes Ridge may help offset declines elsewhere.

https://finance.yahoo.com/news/mitsui-joining-rio-pilbara-iron-035247834.html

Those BHP figures from earlier today:

https://www.bhp.com/news/media-centre/releases/2025/02/bhp-results-for-the-half-year-ended-31-december-2024

Both Rio Tinto and Fortescue report for the same period this Thursday, 20th February. We'll have pretty good idea of the overall prices and grades coming out of the Pilbara after those report.

Of interest too is that tomorrow, Wednesday, Glencore report their annual results.....

Extrader - the 2 issues here, BHP's grades and Pilbara impurities:

GRADES

BHP have announced that in 2H24 the average price paid for their rusty rubble was $81.11 wmt. However the chart of 58% Fe for the same period indicates an average price of c.$88. If that really is the case then BHP have had a disastrous collapse in their delivered grades. There may be mitigating factors but at first inspection they are shockingly bad.

58% on SGX:

https://www.sgx.com/derivatives/products/iron-ore?cc=M58F

IMPURITIES

When it comes to Pilbara purities the IEEFA wrapped it all up back in March 2023. BHP are trying to beneficiate their dross at the same time develop new smelter technology, with no reported breakthroughs. People who know about these things don't rate their chances. The bottom line is that Pilbara ores cannot make DRI grade.

All roads really do lead to Zanaga.

OPPORTUNITIES AND CHALLENGES FOR THE PILBARA AMID THE ACCELERATING STEEL TECHNOLOGY TRANSITION

MARCH 27, 2023

Pilbara iron ore quality issues

A key question for the Pilbara is the practicality of improving the mostly hematite-goethite iron ore reserves in that area to a grade high enough for use in DRI-based steelmaking. Producing DRI/HBI needs high-quality iron ore with at least 67% of iron, while the Pilbara ore’s iron content average is closer to 60%. Pilbara ores tend to have higher impurities which, along with the presence of goethite, make it less suitable for DRI-based steelmaking compared to the high-grade output produced by companies such as Vale in Brazil.

In its latest Climate Change Report, Pilbara iron ore giant Rio Tinto noted: “Our Pilbara blend products have been optimised for the blast furnace process route and have impurities that might be more difficult to manage in emerging green steel technologies. These impurities must be removed upfront via beneficiation or during processing.”

Technology solutions may be part of the answer to the Pilbara ore quality issue. A number of technologies are developing to enable the use of lower-grade ores in DRI-based green steel production.

https://ieefa.org/resources/opportunities-and-challenges-pilbara-amid-accelerating-steel-technology-transition

"At 7p, the risk-reward is highly asymmetric, making it an attractive speculative buy for those who can tolerate waiting for a deal."........news of which we strongly suspect is but days away.

Q. "IS ZIOC AT 7p A GOOD BUY?

ChatGPT said:

🔹 Key Valuation Metrics

Stage 1 NPV: $3.8bn (~£3bn)

Current Market Cap (~7p/share): ~£25m

Implied NPV Discount: Over 99%

Stage 1 IRR: 27.2% (vs. Simandou’s ~12%)

Total Resource: 6.9Bt (only 2.1Bt in Reserve so far)

ZIOC is trading at a massive discount to its underlying value due to uncertainty around funding for FEED ($22m). Once FEED is financed, the NPV discount should reduce significantly.

🔹 Catalysts for a Re-Rating

1️⃣ FEED Financing Secured – Removing doubt over development.

2️⃣ Strategic Investment – Possible from Rio, Baowu, Gulf SWFs, or others.

3️⃣ Updated Reserves from Drilling – Unlocking more of the 6.9Bt resource.

4️⃣ Offtake Agreements – Long-term buyers (Gulf/China) providing financial backing.

5️⃣ Sector Momentum – Growing demand for DR-grade iron ore & green steel projects.

🔹 Risks & Considerations

Timing of FEED funding – Could take months to finalize.

Jurisdiction risk (Republic of Congo) – Less stable than Tier 1 mining regions.

Dilution risk – If equity financing is used instead of strategic investment/offtake deals.

⚖️ VERDICT: DEEP VALUE PLAY WITH MAJOR UPSIDE

At 7p per share, ZIOC is priced as if the project won’t advance—despite clear strategic interest from majors like Rio, Baowu, and Saudi entities. If FEED is financed without major dilution, the upside could be substantial.

At 7p, the risk-reward is highly asymmetric, making it an attractive speculative buy for those who can tolerate waiting for a deal.