16 December 2014

Progression of the Zanaga Iron Ore Project through 2015

Zanaga Iron Ore Company Limited ("ZIOC") (AIM:ZIOC) announces that in light of changing iron ore market conditions it is planned to reduce the cost base of the Zanaga Iron Ore Project (the "Project") during 2015 while continuing to advance key preparatory work.

Following the completion of the Feasibility Study, award of the Zanaga Mining Licence, and signature of a Mining Convention, the Project's ongoing activities will now be conducted off a substantially reduced cost base. The value adding activities to be progressed include the establishment of port and power agreements, validation of the environmental permit, and ratification of the Zanaga Mining Convention by the parliament of the Republic of Congo ("RoC"). These are important preparatory steps for the Project that will place the Project in a position to seek financing once market conditions stabilise and become more favourable. ZIOC and its joint venture partner Glencore plc ("Glencore") continue to work closely with the RoC government on the conclusion of these workstreams.

During the Funding Round initiative conducted jointly by ZIOC and Glencore, a number of entities expressed an interest in discussing an investment in the Project alongside the joint venture partners. Engagement with interested entities is expected to continue, however, we believe that current iron ore market conditions need to stabilise before formal discussions can resume.

Clifford Elphick, Non-Executive Chairman of ZIOC, commented: "Following the recent drop in iron ore prices, we are cognisant of the need to reduce the annual cash costs of the Project. Fortunately, the most costly work programmes required for the assessment of the Zanaga Project have already concluded alongside the completion of the Feasibility Study, and the Project's key value-adding activities will now be conducted off a much lower cost base.

Developments in international iron ore markets are causing prices to transition towards a new supply and demand equilibrium. We remain confident in the robust economics of the Project and look forward to delivering further progress through 2015."

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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 joint venture partnership with Glencore plc. 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.