core sector communique

ZANAGA IRON ORE COMPANY LIMITED
("ZIOC" or the "Company")
Zanaga Project Update

Zanaga Iron Ore Company Limited (AIM:ZIOC) is pleased to announce the following update on the Zanaga Iron Ore Project (the “Zanaga Project”) in the Republic of Congo (Congo Brazzaville)

Highlights Value Engineering Exercise (“VEE”) completed 

o results confirm the economic viability of the Zanaga Project
o post VEE the projected cost of the 45 Mtpa railway option remains in line with IPO estimates
o an alternative 30Mtpa slurry pipeline transportation option identified with potential to further enhance project economics Xstrata intends to commit to a Pipeline Study shortly to refine the pipeline option and its economics Feasibility Study (“FS”) drilling and Environmental and Social Impact Assessment (ESIA) work continues on schedule
o FS expected to conclude in Q1 2014 Joint search initiated with Xstrata for a strategic partner for the Zanaga Project

Clifford Elphick, Non-Executive Chairman of ZIOC, commented:
“Following the completion of the Value Engineering Exercise, ZIOC is pleased to provide an update on the Zanaga Project. It is extremely pleasing that the PFS and VEE work streams have confirmed the economic viability of the 45 Mtpa railway option. In addition, significant potential incremental value has been identified based on modifying the mode of transport to a slurry pipeline, producing a high grade pellet feed product. Xstrata intends to commit to a Pipeline Study shortly to refine this option and its costing, which will assist in determining which