Zanaga Iron Ore Company Ltd (LON:ZIOC) said the Stage One development of the Zanaga iron ore project could cost between US$2,154mln and US$2,275mln, broadly in line with previous estimates, according to a re-costing exercise.
Capital expenditure for the 12 million tonnes per annum (Mtpa) Stage One project is expected to range between -2.9% and +2.5% of a 2014 Feasibility Study estimate.
"The Zanaga Project Team have worked with third party technical experts to re-assess the potential capital and operating costs that could be achieved in the current market for the 12Mpta Stage One project, as outlined in the 2014 Feasibility Study,” said non-executive chairman Clifford Elphick.
“The review of these figures indicates that the capital and operating costs estimated in 2014 remain valid in today's market environment, encouraging us to continue to pursue pathways available for development of the 30Mtpa staged development project, especially during the current high iron ore price environment."
The company owns 50% less one share in the iron ore project in the Republic of Congo through its investment in its associate Jumelles Ltd. The Zanaga project is one of the largest iron ore deposits in Africa and has the potential to become a world-class iron ore producer.
The project's 2.1 billion tonne ore reserve estimate has been re-stated by independent consultants SRK and updated based on market pricing as of 31 December 2020. The restatement confirms that the ore reserves are JORC-compliant and is based on the 30Mtpa Feasibility Study.
In a separate statement, the company said it received net proceeds of about £559,455 in relation to a previously announced placing by Shard Merchant Capital Ltd (SMC) of a second tranche of 7 million shares under a subscription agreement.
Zanaga said SMC will also subscribe for a third tranche of 7 million shares.