Zanaga Iron Ore Co Ltd (AIM:ZIOC) said it is entering the most exciting phase in its history, following a year of sweeping changes to its ownership, strategy and project plans, said Clifford Elphick.
His comments came alongside full-year results for the company, which owns a giant iron ore project in the Republic of Congo from which the company takes its name.
Elphick told investors: "We remain confident in the significant inherent value of the Zanaga Project and our strategic direction towards construction readiness.
"Our assessment of opportunities that have the potential to unlock existing infrastructure solutions, as well as options available for lowering capital and operating costs of the project have been a key focus of the team, along with the process of finding a strategic partner to develop the project, we hope to provide an update on these initiatives in due course."
The company has emerged from the transformation with a strengthened balance sheet, no debt and full control of its flagship project in the Zanaga Iron Ore Project, having bought back Glencore’s 43% stake in March.
A new investor group, including former mining executives from Anglo American and Xstrata, came on board as part of a $23 million equity raise that also marked the end of Glencore’s marketing rights.
The mine development itself is targeting production of 30 million tonnes a year in two phases and is already fully permitted.
The company said a recent feasibility study reconfirmed the economics of the project, but more significantly, test work has now shown the ore can be processed into direct reduction iron (DRI) grade pellet feed.
This high-quality product is essential for cleaner steelmaking in electric arc furnaces and commands a price premium. Zanaga expects the ability to produce DRI-grade material to unlock a meaningful uplift in the project's valuation.
Further initiatives are underway to cut development costs and enhance returns.
These include a potential pellet plant, a single 30 million tonne pipeline to lower infrastructure spending, and the use of dry tailings management to reduce long-term maintenance costs.
The company has also signed agreements to develop local port and power infrastructure, and is in discussions with potential strategic partners to help move the project towards a construction decision.
With $3.9 million in cash as of late June, Zanaga said it is financially secure for the near term.
It described the current period as transformative and said it is confident in the project’s potential to meet rising global demand for high-grade, low-impurity iron ore.
It posted a pre-tax loss for the 12 months ended December 31 of just under $2.3 million.