Zanaga Iron Ore Company Limited Regulatory News (ZIOC)

28 December 2018

INTERIM UPDATE - EARLY PRODUCTION PROJECT

Zanaga Iron Ore Company ("ZIOC" or the "Company") (AIM:ZIOC) is pleased to provide an interim update to shareholders on the potential Early Production Project (EPP project).

The objective of the Zanaga Project Team has been to seek to define an economically attractive solution for the EPP project while minimising capital costs associated with its development. The operating scale of the EPP project is targeted at 1 million tons per annum (MTPA) of saleable product and potential suppliers have been invited to tender for specific contracts associated with the project's development and operation. The primary focus has been on a high value pellet feed product, but with the option of further investigating an additional pelletising process.

The Zanaga Project Team received initial proposals for key aspects of the EPP project's development. This has led to the Zanaga Project Team proceeding to the next stage of the process.

Indicative quotes from third party contractors have been secured for the major aspects of the potential EPP project including the mining contract and key material movement solutions and export logistics requirements, involving trucking, rail and port solutions. The Zanaga Project Team are working with these providers to refine their estimates into firm costs. As a result of the approach to engage third party contractors for all material movement solutions, it is believed that the major capital cost items associated with the proposed development of the EPP project are expected to comprise almost entirely of the on-site facilities only, particularly the process plant required for the beneficiation of Zanaga ore into a high value pellet feed product.

An Engineering Procurement and Construction (EPC) firm is being considered as a potential provider of a pellet feed plant, based on proposals submitted by it. In order to refine and confirm the costs associated with this plant a decision was taken to send three tons of iron ore, representative of Zanaga's upper orebody layers, for testing with the equipment providers selected by the EPC.

The EPC's chosen milling solution has been tested and initial results appear to be encouraging; with the final milling results due to be provided to the Zanaga Project Team during January 2019. The milled material has arrived at the beneficiation test facilities in Brazil and South Africa where these tests are due to be conducted in January 2019 and then reported to the Zanaga Project Team.

While the focus continues to be on a EPP project producing a pellet feed product, the Zanaga Project Team continue to investigate the option of incorporating a pellet plant into the project. Discussions are underway with conventional pellet plant providers to propose and refine the costs associated with this solution. In addition, the Zanaga Project Team are continuing discussions with a cold pelletisation technology provider as regards pellet product acceptability with steel mills.

It is the Zanaga Project Team's intention to secure fixed price cost estimates for key aspects of the proposed EPP project in Q1 2019 as part of the process of determining its economic feasibility. Depending on the achievement of a positive outcome, the Zanaga Project would then be seeking to secure regulatory consents and financing for construction. Updated timing on this process will be provided in February 2019 when the beneficiation test work has advanced.

Clifford Elphick, Non-Executive Chairman of ZIOC, commented:

"It is exciting to see the positive progress being made on the possibility of the Zanaga Project's EPP solution and we look forward to conclusion of the test work programme currently underway. The intention is to secure fixed price cost estimates for the EPP project in Q1 2019 as part of the process of determining its economic feasibility"

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The Zanaga Iron Ore Company Limited LEI number is 21380085XNXEX6NL6L23.

For further information, please contact:

Zanaga Iron Ore

Corporate Development and Andrew Trahar

Investor Relations Manager +44 20 7399 1105

Liberum Capital Limited

Nominated Adviser, Financial Christopher Britton

Adviser and Corporate Broker and Richard Crawley

+44 20 3100 2000

About us:

Zanaga Iron Ore Company Limited (AIM ticker: ZIOC) is the owner of 50% less one share in the Zanaga Iron Ore Project based in the Republic of Congo (Congo Brazzaville) through its investment in associate. The Zanaga Iron Ore Project is one of the largest iron ore deposits in Africa and has the potential to become a world-class iron ore producer.