30 September 2022

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2022

Zanaga Iron Ore Company Limited ("ZIOC" or the "Company") (AIM: ZIOC) is pleased to announce its unaudited interim results for the six months ended 30 June 2022 and an update on post reporting period end events to September 2022.

Highlights

·   Early Production Project ("EPP Project" or "EPP")

o  Numerous production scenarios remain under investigation on processing facilities and suitable logistics solutions, with a particular focus on an export solutions through the Republic of Congo ("RoC")

o  Multiple contract operators have been engaged across mining, logistics, and processing disciplines with the objective of providing updated cost estimates in-country

o  Significant engagement underway with other mining project developers in RoC to explore potential collaboration opportunities, especially in relation to logistics solutions and alternatives for upgrades to existing infrastructure

·   Zanaga Iron Ore Project (the "Project" or the "Zanaga Project") 30Mtpa staged development project (12Mtpa Stage One ("Stage One"), plus 18Mtpa Stage Two expansion ("Stage Two"))

o The Project Team continue to engage in activity to ascertain opportunities for optimisation and improvement of the 30Mtpa staged development project and will update the market as these improvements develop. No material updates are available for the H1 2022 period.

·   Work programme and budget for 2022, and $1.2m Jumelles Ltd working capital loan facility, agreed with Glencore Projects Pty Ltd ("Glencore"), a subsidiary of Glencore plc

o Loan provides full financing for the Zanaga Project budget until 30 June 2023

Corporate

·   Funding update - Shard Merchant Capital Ltd ("SMC") 21 million share equity subscription agreement

o  Proceeds of £1,141,574 has been received to date from SMC since launch, following 18,000,000 shares being placed by SMC, with a further 3,000,000 ordinary shares remaining to be placed at 29 September 2022

o  Of the total amount received to date, mentioned above, £62,628 was received by ZIOC from the SMC facility during the first half of 2022 and no further cash has been received since 30 June 2022 to date

o  Proceeds applied to general working capital, including the provision of further contributions to the Zanaga Project's operations

·   Cash balance of US$0.3m as at 30 June 2022 and cash balance of US$0.1m as at 29 September 2022.

o  Jumelles level loan from Glencore resulted in reduced future funding for ZIOC towards the Project

o  Current available cash on hand is expected to cover ZIOC's corporate overheads until end Q1 2023, with current SMC facility placement expected to extend ZIOC working capital to end Q3 2023

·   Annual General Meeting to be held in November 2022, and notice will be sent to shareholders shortly.

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

"I am pleased to report that significant work is underway to evaluate options to enable initial small scale production of iron ore from the Republic of Congo, utilising existing infrastructure.

The iron ore market has experienced substantial underinvestment by the major iron ore producers over the last decade. This provides an opportunity to demonstrate that smaller scale production can be delivered initially from RoC, with the upside potential of de-risking the larger scale potential following infrastructure upgrades. We look forward to providing an update on our activities in due course".

Copies of the unaudited interim results for the six months ended 30 June 2022 are available on the Company's website at www.zanagairon.com

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                        Scott Mathieson, Edward Thomas

Adviser and Corporate Broker                       +44 20 3100 2000

About us:

Zanaga Iron Ore Company Limited ("ZIOC" or the "Company") (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 its associate Jumelles Limited. 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.

Business Review - Operations

Iron Ore Market

The iron ore market has experienced substantial underinvestment by the major iron ore producers over the last decade, with no notable iron ore mine project approvals to report. Iron ore prices remain relatively stable as China continues to demonstrate robust demand in spite of the impact of Covid on industrial activity in China. Furthermore, given the current geopolitical environment, it is clear that resource independence is more important than ever and strategic investors are starting to consider iron ore development options outside of the usual territories of Australia and Brazil. In this respect, the quality of the Zanaga Project, and Republic of Congo's iron ore resources, has the potential to deliver substantial iron ore production to strategic customers looking to secure positions in the commodity.

EPP Project

The Project Team continue to undertake a process to evaluate the potential development of an EPP Project that would be quicker to construct than the larger 30Mtpa staged development project and would utilise existing road, rail and port infrastructure.

Engagement with other mining project developers in RoC has been increased in order to explore potential collaboration opportunities, especially in relation to logistics solutions and alternatives for upgrades to existing infrastructure. Multiple contract operators have been engaged across mining, logistics, and processing disciplines with the objective providing updated cost estimates in-country.

The Project Team continue to advance study work in an effort to improve their understanding of the viability of the EPP Project. The Project Team continue to evaluate the potential for the EPP Project to operate as a standalone project, or as an initial pathway to production during the construction period of the flagship 30Mtpa Staged Development Project.

30Mtpa staged development project

The Project Team's ultimate objective remains to develop the flagship 30Mtpa staged development mining project. As a reminder, the Stage One project plans to produce 12Mtpa of premium quality 66% Fe content iron ore pellet feed product at bottom quartile operating costs for more than 30 years on a standalone basis.

The Stage Two expansion of 18Mtpa is nominally scheduled to suit the project mine development, construction timing and forecast cash flow generation, and would increase the Project's total production capacity to 30Mtpa. The product grade would increase to an even higher premium quality 67.5% Fe content due to the addition of 18Mtpa of 68.5% Fe content iron ore pellet feed production, at an even lower operating cost. The capital expenditure for the additional 18Mtpa production, including contingency, could potentially be financed from the cash flows from the Stage One phase.

The Zanaga Project Team has continually taken steps to monitor evolving improvements into its strategy for assessing the options available for the development of the Zanaga Project. The Project Team maintained its view that high quality products will continue to achieve significant price premiums in the future and has sought to lock in this additional revenue benefit into the Project's development plan.

The Project Team will continue to engage in activity to ascertain opportunities for optimisation and improvement of the 30Mtpa staged development project and will update the market as these improvements develop.

Cash Reserves and Project Funding

As reported in the Company's annual results published on 30 June 2022, Glencore and ZIOC agreed a 2022 Project Work Programme and Budget for the Zanaga Project of US$1.3m plus US$0.1m of discretionary spend, dependent on certain workstreams requiring capital. ZIOC agreed to contribute towards this work programme and budget an amount comprising US$0.09m; the remaining budget amount will be funded via a loan facility provided directly to Jumelles Ltd by Glencore thus requiring less funding by ZIOC over the subsequent 12 months compared to the historical levels observed. On 29 June 2022, Glencore and the group signed a side letter to the Jumelles loan facility confirming that there will be no dilution of the group's holding in Jumelles as a result of this change in funding structure.

We are pleased to report that the Zanaga Project's activities are currently running in line with the 2022 budget forecast.

As at 29 September 2022, ZIOC had cash reserves of US$0.1m and the Board continues to take a very prudent approach to the management of the business and its cash reserves.

ZIOC is pleased that a financing structure is in place at the Jumelles level which ensures sufficient capital in place to cover all in-country costs associated with the Project until end June 2023. Furthermore, the SMC facility remains in place and has given, and continues to give, the Company access to funding through a relatively low cost structure which minimises dilution to shareholders. Going forward ZIOC's operating costs have been reduced to a low level with no contributions at a project level until at least end Q2 2023 and no board or management remuneration in place (as announced previously). Furthermore, no future contributions to project-level costs will be considered until ZIOC has first built up cash reserves capable of funding longer term corporate overheads at the current reduced level.

Outlook

During 2022 the Project Team have made a number of significant steps in advancing solutions to unlock the key logistical challenges associated the EPP Project. The Project Team are engaging with other mining project developers in RoC to explore potential collaboration opportunities, especially in relation to logistics solutions and alternatives for upgrades to existing infrastructure. We look forward to updating our shareholders on the outcome of these initiatives.

Financial review

Results from operations

The financial statements contain the results for ZIOC for the first half of 2022. ZIOC made a loss in the half-year of US$0.5m compared to a loss of US$1.9m in the full year ended December 2021. The loss for the 2022 half-year period comprised:

General expenses of US$0.2m (2021: US$0.4m), consisting of: Directors' fees of US$Nil (2021: US$Nil), professional fees of US$Nil (2021: US$Nil), LTIP charge of US$0.1m (2021 US$0.3m) and US$0.1m (2021: US$0.1m) of other general operating expenses.

The share of loss of associate of US$0.3m (2021: US$0.4m) relates to ZIOC's investment in Jumelles Limited ("Jumelles"), the joint venture company in respect of the Zanaga Project. From May 2014, as a result of the completion of the Feasibility Study and thus consideration to complete the Glencore share option, only 50% (less one share) of the Jumelles results are now included above.

During the half year period, the Company's share of Jumelles' project expenditure was US$0.3m including the effects of currency translation of $0.04m gain. Capitalised exploration assets remain at US$80.0m.

Financial position

ZIOC's net asset value ("NAV") of US$37.5m is comprised of a US$37.1m investment in Jumelles, US$0.3m of cash balances and US$0.1m net current assets.

Cost of investment

The investment in associate relates to the carrying value of the investment in Jumelles, which as at 30 June 2022 owned 50% less one share of the Project. The carrying value of this investment decreased in 2022 due to:

·    Company funding per the Funding Agreement of US$0.1m; and

·    The Company's US$0.3m share of the comprehensive loss US$0.6m made by Jumelles during the half-year.

As at 30 June 2022, Jumelles had aggregated assets of US$81.0m (June 2021: US$81.3m) and aggregated liabilities of US$0.9m (June 2021: US$0.7m). Non-current assets consisted of US$80.0m (June 2021: US$80.0m) of capitalised exploration assets and US$0.8m (June 2021: US$1.0m) of other fixed assets including property, plant and equipment. Cash balances amounted to US$0.2m (June 2021: US$0.3m) and other current assets were US$Nil (June 2021: US$Nil).

Cash flow

Cash balances have decreased by US$0.1m since 31 December 2021. Additional investment in Jumelles required under the Funding Agreement (details set out in note 1 to the financial statements) utilised US$0.1m, operating activities US$0.1m. The Shard facility provided funds of US$0.1m.