Zanaga Iron Ore Reports Transformational Year: DRI-Grade Product Confirmed, Strategic Investment Secured

Zanaga Iron Ore has packed a lot into this results statement, and most of it points in the right direction. The headline is simple: the company says it has confirmed that the Zanaga Project can produce premium Direct Reduction Iron, or DRI, grade iron ore concentrate, and that matters because DRI-grade material is the sort of product steelmakers increasingly want for lower-carbon steel production.

There is also a clear corporate reset here. Glencore is out, new mining-heavy backers are in, a strategic investment deal is being worked up with Red Arc Minerals, and fresh equity has given the group breathing room. For a company that still has no production and no revenue, that is a big shift.

Zanaga Iron Ore results 2025 – the key numbers retail investors should focus on

Metric	Figure	Why it matters
Stage One capex	US$2,174 million	Higher upfront build cost than the 2024 update
Stage One NPV	US$2,539 million	Net present value – a measure of estimated project value
Combined NPV	US$4,897 million	Up 29.4% versus the 2024 feasibility study update
Combined IRR	24.3%	Internal rate of return – a measure of project profitability
Cash cost savings identified	US$2.2 billion	Potential life-of-mine savings from development workstreams
2025 fundraise	US$23.01 million gross	Funded the Glencore buyback and working capital
2026 equity raise	£5.7 million gross	Supports bulk sampling and overheads
2025 total comprehensive loss	US$7.2 million	Reminder this is still an early-stage developer

DRI-grade iron ore confirmation is the biggest value driver in this Zanaga RNS

This is the bit that really moves the story. DRI-grade iron ore is higher quality feedstock used in direct reduced iron processes, which are increasingly important as steelmakers try to cut emissions. Zanaga says test work confirmed Stage One hematite concentrate at 68.5% Fe, 1.05% SiO2, 0.47% Al2O3 and 0.034% P, while Stage Two magnetite concentrate came in at 69.1% Fe, 1.96% SiO2, 0.40% Al2O3 and 0.028% P.

That quality uplift feeds straight into economics. The company says confirmation of DRI-grade pellet feed has increased project revenue potential to US$11,325 million over the life of mine. On the April 2026 economic update, Stage One NPV rose to US$2,539 million from US$1,939 million, while combined NPV rose to US$4,897 million from US$3,784 million.

That is undeniably strong. In plain English, the market may pay more for the product Zanaga thinks it can make, and that extra revenue more than offsets some higher processing costs.

There is a catch, though. Stage One capex rose to US$2,174 million from US$1,935 million, and the updated Stage One processing, filtration and handling costs are estimated at US$11.97 per tonne of concentrate versus US$8.42 per tonne in the 2024 study. So the project looks better, but it is not getting cheaper to build in the near term.

Zanaga cost savings from pipeline and tailings studies look real, but they are not all immediate

Management spent 2025 working through four targeted initiatives, and says these delivered US$2.2 billion in cash cost savings. The most meaningful looks to be tailings. Tailings are the leftover waste material after processing ore, and the company says thickened and dry tailings could reduce life-of-mine cash expenditure by US$1,280 million.

That is a serious number, and it matters beyond money. Tailings design is a major environmental and social issue in mining, so a safer, more modern solution can help both economics and project credibility.

The single 30 Mtpa pipeline study is a bit more nuanced. Total upfront pipeline capex is estimated at US$986 million, which increases Stage One capex by US$349 million but reduces total capex by US$357 million compared with a two-stage pipeline approach. It could also cut operating costs by US$950 million over the mine life by removing the need for a booster station and its fuel use.

That sounds great, but the company is honest that the NPV impact is limited because spending more cash earlier offsets savings later. I actually like that candour. It tells you management is not trying to sell every technical tweak as a silver bullet.

Glencore exit changes the Zanaga investment case in a big way

In March 2025, ZIOC raised US$23.01 million gross and used US$15 million of that to repurchase and cancel Glencore’s entire 43% shareholding. That also terminated Glencore’s Offtake Agreement and Relationship Agreement with the group.

Strategically, that looks positive to me. It removes a dominant shareholder and gives ZIOC more freedom to bring in new partners and rethink marketing arrangements. The fact a new investor group with heavyweight mining names backed the deal also adds credibility.

But shareholders should not ignore the dilution maths. In 2025, the company bought back and cancelled 290,843,718 shares, then issued 447,430,243 new shares. Shares in issue rose to 832,380,210 at 31 December 2025, and after the 2026 raise the total number of shares rose again to 991,101,694.

Red Arc Minerals deal could fund Zanaga to FID, but investors need to read the small print

The proposed Red Arc Minerals investment is potentially the next major milestone. Under the binding term sheet signed in February 2026, Red Arc could invest up to US$25 million in Tranche One to fund the project through to Final Investment Decision, or FID, and acquire 20% of Jumelles, the project holding company.

Then comes the big option. Red Arc can choose to pay ZIOC US$125 million in cash for a further 67.5% fully diluted interest in Jumelles, taking its total ownership to 87.5%. If that happens, ZIOC would also receive a 1.0% net sales revenue royalty on concentrate sales, subject to a partial buy-back option of US$50 million for 0.50%.

This is good and bad at the same time. Good, because it could fund the project to a proper decision point without direct plc-level dilution and could eventually put serious cash on ZIOC’s balance sheet. Bad, because if Tranche Two happens, ZIOC becomes a minority owner of the asset unless it later chooses to put money back in.

Also, this deal is not done yet. The company says transaction documentation is expected during July 2026, and there can be no certainty that the transaction will complete.

2026 equity raise removes near-term funding stress, but dilution remains part of the story

In May 2026, ZIOC raised £5.7 million gross, or about US$7.7 million, by issuing 142 million shares at 4 pence. The placing was oversubscribed, which is a decent sign that investors bought into the strategy.

The money is earmarked for the bulk sampling campaign, in-country overheads and corporate working capital. Importantly, the board says this raise removed material uncertainty around going concern, meaning it now believes the group has enough cash for at least twelve months from approving the accounts.

The headline section says cash was US$1.28 million at 31 December 2025 and US$5.40 million at 30 June 2026. In the going concern note, the 30 June 2026 cash figure is given as US$5.6 million. That discrepancy is in the RNS text, so investors should note it, even if the broad message is the same – cash has improved.

Zanaga financial results still show a high-risk pre-production miner

For all the strategic progress, this is still a company burning cash while trying to advance a giant project. Total comprehensive loss for 2025 was US$7.2 million, up from US$2.3 million in 2024, with general expenses of US$7.3 million.

There is no operating revenue. Net assets were US$86.5 million, including US$85.3 million of exploration and evaluation assets, so most of the balance sheet value rests on the future success of the Zanaga Project.

That means the main risks remain the usual big-ticket ones: iron ore prices, project financing, infrastructure, permitting, host country risk in the Republic of Congo, and execution. The Stage One build cost of US$2.17 billion tells you exactly why this remains speculative.

What this Zanaga Iron Ore update means for retail investors now

This is one of the better updates I have seen from ZIOC in a long time. The DRI-grade confirmation strengthens the investment case, the project economics have improved materially, and the company has done the hard corporate work of resetting the shareholder base and bringing in fresh strategic interest.

At the same time, this is still not a simple story. Zanaga has a potentially valuable asset, but it also has a massive funding challenge ahead, no production cash flow, and a deal with Red Arc that is promising rather than completed.

My take is straightforward: this RNS is clearly positive, but it does not remove the risk. If Red Arc completes, FEED is funded and the project moves towards a 2027 construction decision, the upside case gets much easier to believe. Until then, ZIOC remains a high-risk, high-reward iron ore development play rather than a finished investment story.