30 July 2014

Grant of Options

Zanaga Iron Ore Company ("ZIOC" or the "Company") announces that on 29 July 2014 the Board approved the grant of 9,027,274 share options over ordinary shares of no par value in the Company ("Ordinary Shares") to certain Directors, key employees of and consultants to the Company ("Share Options") in recognition of the achievement of key corporate and project milestones since 2012 and to incentivise key employees and consultants to achieve certain new performance targets.

1,613,856 of the Share Options have been awarded to Directors in the amounts and with the vesting terms and exercise prices stated below.

The remaining 7,413,418 Share Options have the following vesting terms and exercise prices:

·      5,513,418 will vest immediately and 1,900,000 will vest on 31 December 2015 or sooner on the satisfaction of certain performance or other vesting conditions; and

·      5,813,418 have an exercise price of 0.01p per Ordinary Share and the remaining 1,600,000 have an exercise price of 18.50p per Ordinary Share, being the mid-market closing price on 28 July 2013.

All of the Share Options are exercisable within 10 years of the date of award and are being made as part of the Company's overall management incentivisation plan by way of individual share option agreements.  Such arrangements fall outside the 2010 LTIP trust scheme which was set up at the time of the Company's IPO and which remains in place.

Directors' Options

The Share Options granted to Directors were as follows:

Director                         Share Options                           

David Elzas                    400,924                        
Colin Harris                    611,085*                                  

Clinton Dines                  201,847            

Alistair Franklin              400,000**                    

* This includes 409,237 options awarded to Harris GeoConsult Ltd, the company which provides the services of Colin Harris as a consultant and in which company Colin Harris has an interest.

** This includes 199,076 options awarded to Alistair Franklin upon his appointment as a Director in February 2013 with a nil consideration exercise price, which were disclosed in the Company's 2013 Annual Report but which are only now being formally issued.

The Share Options issued to the Directors have an exercise price of 0.01p per Ordinary Share, other than those awarded to Alistair Franklin, as mentioned above.

409,237 of the Share Options awarded to Harris GeoConsult Ltd vest on the date of grant. The remaining 1,204,619 Share Options granted to Directors will vest in three equal tranches, being the date of grant, February 2015 and February 2016.

Messrs Clifford Elphick (Chairman) and Michael Haworth (Non-executive Director) have agreed not to participate in any new share option awards.

Total Shares Under Option

Following the award as disclosed in this announcement, in aggregate the newly issued Share Options and existing unexercised share options will represent 4.64% of the Company's current issued share capital.

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           Simon Atkinson and Christopher Britton

and Corporate Broker                     +44 20 3100 2000

Bell Pottinger

Financial PR                                   Daniel Thöle and Marianna Bowes
+44 20 7861 3232

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. 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.