Zanaga Iron Ore (LSE:ZIOC) — Investor Presentation

0:01 Good morning ladies and gentlemen and welcome to the ZANAGA IRON ORE COMPANY Investor Presentation. Questions are encouraged, they can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish responses where it's appropriate to do so on the Investor Meet company platform. Before we begin, we would just like to submit the following poll and if you could give that your kind attention, I'm sure the company would be most grateful. And I would

0:32 now like to hand you over to the team from Zanaga IRON ORE COMPANY, Marty, good morning, Good morning, and thank you. And thank you for our participants in today's webinar, of which the objectives will be then to provide further information then around our transaction with Redarc Minerals, of which we have recently announced. Myself as the Chief Executive and Andrew Traier will present this webinar and then kindly answer your questions following the discussion points that we will be presenting. As long acknowledged, we firmly believe that the Zanaga project is a world class asset. What has been delineated through multiple studies over many years is a large, high grade, long life and low cost asset of which in today's world and the emerging markets, the world needs higher and higher grade iron ore products.

1:33 And the Zanaga IRON ORE COMPANY, with its long history in supporting, developing this project, now in The Republic Of Congo, on the expectation of shareholders and our strategic milestones, now have come to a position where following the full permitting process with The Republic Of Congo in 2014 for our mining licences, environmental permits awarded in 2020, that we need to create an unlocking event then to create the momentum required to move the Zanaga project into production. We, over many years, have engaged many interested entities over a long period of time and multiple processes, then to create the value expected then by our stakeholders.

2:22 And those stakeholders and our investors have asked us, if not demanded, to draw a line in the sand and get the construction process, the energetic funding processes underway to start construction and see the ZANAGA products into the market as the market also expects. The lots of entities that we have been engaging with have also been very clear that they would only invest at the asset level. And then also as part of a consortium. The world has changed since 2020, when large tier one strategic investors go it alone in large projects such as ZANAGA. And whilst the community of investors who have been engaging long and hard and diligently now with have all agreed that this unlocking mechanism of having an entry to create the interest of which then other tier ones then can follow is the only logical way that we can see ZANAGA developed.

3:30 That said, our commitment then to retain and maximise shareholder value for ZIOC shareholders remains paramount. And in this transaction, we have secured the $25,000,000 of which is required then to see the completion of the engineering processes, environmental impact assessments, coordination around the project with our communities and with our government and their non government stakeholders to actually achieve a construction decision along our strategic milestone schedule. And it is paramount that this $25,000,000 once extended, will achieve a construction decision, of which we believe then will be quite positive given the length of the work, the diligence of the work, and the outcomes of the work to be completed in the next fifteen to eighteen months.

4:29 Of which then, other investors within this consortium can diligently complete their processes and then come on board as part of that consortium in stages as they have outlined to us. This transaction also limits dilution. Yes, we could have raised this $25,000,000 to unlock the construction decision. However, that would lead to a 30% dilution for existing ZIOC shareholders. That is not in our interest in retaining and maximising value. There is slight dilution in this transaction at the asset level. However, the royalty is retained purely for ZIOC shareholders, And we have earned through this transaction a premium of 150% against today's trading price.

5:24 The project optionality we have retained through here with a management team who have delivered consistently through the engineering studies, our engineering partners who continue to support us right through the construction decision. This optionality has a right to fund or sell a retaining stake and fund what is effective a free carry through to the construction process as well as part of the investment consortium. In addition to the $25,000,000 of which have been outlined here to achieve the construction decision, a further 125,000,000 in cash to ZIOC bank account, and there our shareholders, within thirty six months of closing a tranche one deal of $25,000,000 retains then a significant asset for us at ZIOC with our shareholders to make a decision around what we do with that cash as required then under the tranche two conditions.

6:28 The royalty of 1% of net sales revenue is a significant long term value add for our ZIOC shareholders. And I have to be clear here. This cannot be transferred to anybody else. That royalty is only for ZIOC shareholders, no matter who owns or controls the asset well into the future. The strategic entities of which we have long engaged with now

7:01 have always been clear in not only having part of an investment consortium at the asset level, but clearly out of that engagement there was a single figure who then able to come to us then with a clear plan. And that person was Samik Davies, who was then recently founded Red Ark Minerals. And then in support then with Heaney Capital, who twelve months ago enabled us to get to where we are today in investing 25% of ZIOC shares in creating that cornerstone. And this relationship then between Red Ark Minerals and Heeney Capital is extremely critical in that further to the long processes of due diligence with many other interested entities, the entity of Redarc Minerals now has achieved the trust. They've been completing the due diligence processes over the last twelve months with ZANAGA's technical partners and resulted in this transaction.

8:06 We can see that the belief is there, the trust is there, and the due diligence boxes when it comes to technical risk, sovereign risk, and financial risk about investing in ZANAGA project now have been completed.

8:25 In introducing the transaction at a high level, as recently announced, the Redarc Minerals have offered the $25,000,000 as tranche one to complete the engineering processes, which are well scoped, well planned, well resourced, and well understood when it comes to schedule and the deliverables out of those engineering, social impact and community engagement processes. Upon completion of tranche one brings us to a construction decision through the third quarter of twenty twenty seven. Then tranche two can be triggered by Redarc Minerals in then providing 125,000,000 of additional cash directly to ZIOC, raising then the percentage of ownership from 20% at the project level to 87.5% at the project level.

9:22 Upon which then ZIOC remains at the table and a significant part of the project decision making management team at 12.5%, in addition then to the royalty flows and through the operations phase of the project. And at this point, I would hand to Andrew then to take us through some of the more technical details of the transaction and the value retained for ZIOC. Thanks, Marty. So we have to admit that the complexity of the transaction takes a bit of time to understand and wrap one's head around, but hopefully these new slides, which have been loaded onto our websites will help our shareholders understand the transaction better.

10:14 So going through the different steps. In tranche one, as Marty mentioned, dollars 25,000,000 invested in the project to take it to a construction decision. The effective purchase price is 15p per share that Red Hawk Minerals is paying. Because if they don't move forward to tranche two, we have the right to reabsorb 100% of the asset level ownership and Red Oak Minerals would have paid 15p per share to fund the project to that construction decision. This equates to 150% premium to the current share price. So as Marty mentioned, when we were considering our different options, we did not want to dilute the ZIOC shareholders and suffer significant dilution when raising the $25,000,000 Instead, we've done a deal at a premium to the share price prior to announcement.

11:14 When that funding is spent and Red Rock Minerals actually has the option to trigger this earlier, if Red Rock Minerals elects to trigger the tranche two option, then ZIOC will own three assets. ZIOC will own $125,000,000 of cash that Redarc would have paid to ZIOC, which is equivalent to 11 per share, nearly twice the current share price, which ZIOC would own in hard cash. In addition, ZIOC could still own 12.5% of a fully construction ready project, a strategic asset that ZIOC can either sell for further value or elect to retain and fund its share of the construction.

12:01 And the third asset that ZIOC could own at this point in time is that royalty, very significant, very valuable royalty. When the project goes into full blown construction, at that point in time, the project's approximate total capital cost is $2,000,000,000 which notionally we are estimating in a worst case scenario, 1,000,000,000 of debt and $1,000,000,000 of equity from the investors would be required to build it. At that point in time, ZIOC will have in the bank the $125,000,000 that it needs to fully fund and stand its corner on the 12.5% ownership of the fully financed producing mine. Effectively, what this transaction has created is a mechanism for ZIOC to be fully free carried without any further funding into the project into a 12.5% ownership stake in the cash generative large scale mine.

13:03 What that means in terms of value for ZIOC shareholders is that ZIOC shareholders would, at that point in time, if we elected as ZIOC to invest in retaining our 12 and a half percent stake, a very significant EBITDA, attributable EBITDA to ZIOC of approximately $113,000,000 in stage one, rising in stage two to nearly $300,000,000 without any further funding being required. Because the stage two project has been designed to be fully financed from cash flows from stage one. So ZIOC at that point in time would have an attributable earnings share of $300,000,000 in the fully producing stage two minutee. In addition, ZIOC would have the 1% royalty, which equates to $13,000,000 a year of payments in stage one, rising to $32,000,000 a year of annual payments to ZIOC alone in stage two.

14:12 What does this mean in terms of value progression? We've put together a couple of slides that we hope will provide a clearer understanding to our shareholders of the value at each point in time. In stage one today, the tranche one payments are effectively going in at an effective 15p per share price, which is 150% premium for a minority stake by Red Oak Minerals. If Red Oak Minerals elects to exercise that tranche two, ZIOC would have that $125,000,000 of hard cash in the bank, nearly twice our current market capitalization, plus and we've notionally valued the remaining 12.5% stake at the same purchase price, a very conservative valuation for our remaining 12.5% of the asset at 23,000,000, Plus we would own a royalty that Red Hawk Minerals has a right to buy half of for $50,000,000 So we're valuing that at twice the buyback price.

15:26 Total value then after tranche two is triggered of 22p per share. A very significant multiple of over three times the current share price, nearly four times the current share price. If going into construction, ZIOC elects to fund its corner on the project, as I was mentioning earlier in that previous slide, ZIOC would own 12.5% of the producing asset and we're valuing the EBITDA at five times EBITDA, which is a pretty standard metric for an asset of this nature, valuing our stake in the stage one project at $564,000,000 and we're valuing the royalty payments at 10 times royalty payments, which is a standard metric for royalty valuations.

16:16 That combined valuation would come to approximately $700,000,000.61 per share equivalent today. This is a 10 times multiple above the current share price. As the project ramps up in stage two, the project stake that we would be owning of 12.5%, as I mentioned, would be generating approximately $300,000,000 of attributable EBITDA to ZIOC. That would then on a five times multiple be valued at nearly $1,500,000,000. And the royalty payments once again on a 10 times multiple would be valued at $320,000,000.

17:02 Therefore, delivering a value to ZIOC of its assets, its royalty and share in the project of $1,800,000,000 equating to 159p per share.

17:17 Those figures in the right in the grey box exclude any value received in dividends from the project or royalty payments from the project in the interim periods. So that's just an illustrative value of the sale value of the underlying assets that ZIOC would own at that point in time. So as you can see, the transaction we've structured here involves a premium in the first tranche, a massive premium underpinned by cash when tranche two is exercised, including the upside value of the royalty instrument, and if ZIOC elects to then fund its corner going into the project's construction, a very significant and large multiple above where we are priced today in terms of ownership of a cash generative asset.

18:09 At any point in time along the way, these assets can also be sold. We can sell the royalty to a royalty company if the value is right. We can sell the stake in the project to a strategic steel mill or trading house that might want to buy it and secure offtake. So we do have optionality in the interim period to also arbitrage at points in time against these values and unlock near term value to be able to make distributions to our shareholders if bids are received for these individual ownership stakes. We've had a number of questions from investors about Redarc Minerals having the right to pay $50,000,000 to buy half of the royalty back.

18:57 We've put together a slide on the next page which shows the impact on these values if Red Oak Minerals decides to trigger that early buyback of half of the royalty instrument. And as you can see in comparison to the previous slide, the impact is negligible. In fact, there are some significant benefits. In tranche two, which is the point in time at which Red Rock Minerals would have the right to do that, ZIOC's cash on hand in the bank would increase to $175,000,000 because of that $50,000,000 royalty buyback payment. In addition, we would still own 12.5% of the project, which we are valuing extremely conservatively at, we're still at that $23,000,000 value.

19:48 And we would still own a 0.5% royalty, which is still very significant and very valuable and very attractive to royalty companies who might want to buy it from us. In stage one and stage two of the project's construction phase, at that point in time we would have the $50,000,000 from the buyback of the royalty cash in the bank and we would still own the remaining 12.5% stake in the project fully financed and producing cash flows, plus we would still own a 0.5% royalty that is still very valuable in both stages. So as you can see in comparison on both slides, the impact is negligible on the value walk that we have created for ZIOC shareholders.

20:39 In essence, the critical thing that we've done in this transaction is we've avoided selling any stake in the project at a discount. In fact, it's been a stake sale at a premium. And we've created a mechanism for us to unlock substantial long term value while also retaining the optionality to consider bids from other parties in the near term should they want to own any of these instruments. All of which we believe creates a pathway to very valuable upside potential well beyond the current valuation of the business. In summary, the $25,000,000 that we have secured from the business now funds the project and the business through a major de risking milestone into the construction capability decision of the project and put ZIOC in a position where any cash burn at a ZIOC GLSCO level is absolutely minimised and all costs of the asset and its forward progression are being funded by the Redarc Minerals investment.

21:52 Marty, would you like to add any further comments? Thank you, Andrew. Yes, so as I mentioned just previously, the work streams which will take us to a construction decision are well scoped and well planned, scheduled and resourced. We've also shared these then with our partners in The Republic Of Congo, both domestic and government levels. And our project partners and consultants are ready to commence this work. And certainly following the successful inputs into the work streams which we've published through 2025. This $25,000,000 transaction enables us to complete all of this work then to a tier one standard of construction decision as well, with peer reviews, risk assessments, coordination, and certainly clear communication with our project communities, which will be involved in a critical part of any mineral development in the world being resettlement.

22:57 And the impact assessments then around environment and community and domestic economy as well. We don't see any reason that this FID process is out of sync then with tier one investors'

23:16 expectations. And upon which we will never stop engaging then with Redarc Minerals with other strategics, then around forming this consortium, then to raise the critical capital, then to achieve the stage one milestones as well. And certainly the strategic timetable post FID is aimed to meet what we all expect then to be another upswing in the iron ore commodity cycle in the early 2030s. We believe this transaction is highly valuable, both for ZIOC shareholders and stakeholders. But critically, and I'll repeat, it enables us to unlock what some may perceive to be a stalemate when it comes to international strategic investors.

24:09 This transaction with Redarc Minerals unlocks, and that's a critical word,

24:15 action in 2026 and achieves the project momentum required then to meet the expectations of all our stakeholders and see the ZANAGA project come to market. Perfect. Marty, Andrew, if I may just jump back in there. Thank you very much indeed for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab that's situated on the right hand corner of your screen. But just while the team take a few moments to review those questions that have been submitted already, I'd just like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can all be accessed via your investor dashboards.

24:57 Marty, Andrew, as you can see there, we have received a number of questions throughout your presentation and thank you to all of those on the call for taking the time to submit their questions. But guys at this point, if I may just hand back to you to read out those questions and give your responses where it's appropriate to do so. And if I pick up from you at the end, that'd be great. Thank you. Thanks very much. I've got a list of some of the questions here and we'll address a few of the pre submitted ones first of all, and then we'll go on to answering some of the newly submitted questions. We had a few questions come through around NPV of the asset versus the value of the deal. And so first of all, NPVs are based on a calculation of discounted cash flows, risk adjusted and effectively provide a representation of 100% value of a fully de risked asset.

26:00 In reality, assets don't trade at 100% of NPV. They trade at very low multiples of potential NPV. And in this transaction and those who've studied finance will be aware that market valuations dictates market values of listed stocks. This transaction involves a significant premium to the price of ZANAGA IRON ORE COMPANY prior to announcement. Prior to announcement, the stock was trading at about seven point five to eight pence per share. The tranche one investment alone is a 15p per share entry price for that minority position, which is a very significant premium to the market price of ZANOGA IRON ORE COMPANY prior to the deal being announced.

26:59 We also had some questions around our comparisons previously to the CAMI project, Champion Irons asset. It's a different project. It's a different location. And we use that as a comparable to not only explain to our own shareholders, but also to put the news out there to potential strategics that we believed that we should be valued higher. We communicated that value expectation to different strategics and our own shareholders. And after disclosing those comparable numbers, our stock continued to trade at 7.5 to eight P. So we believe that we did everything we could to try and attract strategic investors to come in at the highest valuation possible.

27:46 And this brings us on to the next question, process. We have been running a process for a number of years around this asset, with a view to attracting a strategic investor to come in and do a deal with us. A deal that we wanted proper value from. And as outlined in those previous slides, transaction transaction we have structured does create a pathway to ZIOC shareholders receiving end time value of 600 sorry, 100 to $1,800,000,000 700,000,000 to $1,800,000,000 And that is why we structured the deal this way. We haven't received a standalone unilateral bid from some of the strategics that we have been talking to. And many of our investors asked us to draw a line in the sand, run a process, force them to bid. And that's what we've done.

28:43 And we have now put the cards down on the table and forced other strategics to realize that the deal is going to be done. This asset is going to move forward and they need to get on board or step aside. And the situation remains, and this is another question that came across, which is, can bids be received for ZANAGA IRON or company or the project prior to the EGM to approve the Red Hawk Minerals transaction? Absolutely bids can be received. Any entity is free to submit a bid to the board of directors for consideration. Absolutely that can be done. And we have the mechanisms in place to be able to receive such offers. And we frankly would encourage any entity to consider making offers if they would like to.

29:37 But we have drawn a line in the sand and we've now forced the hand of strategics to either step up and compete or come in and participate in the strategic consortium to build the transaction. Another question that has come across from investors is why RAM just acquire the whole of ZANAGA IRON ORE COMPANY? Well, anyone is able to make an offer for ZANAGA IRON ORE COMPANY, and we are always open to bids to acquire the ZANAGA IRON ORE COMPANY, but we want full value for ZANAGA IRON ORE COMPANY shareholders to be received.

30:24 And that has always been our ambition and will remain our ambition. And if any offer is received, whether it's from Red Rock Minerals or any other strategic partner, we intend to get full value for ZIOC shareholders in due course and certainly significant value well beyond the current share price. The next thing that we had a question on is planned news release around the project's economics. Marty has been leading a process and is nearing completion of a process to conclude the assembly of the updated contract packages. We would guide investors to the fact that there shouldn't be a sort of big expectation of any dramatic change.

31:13 And that certainly has no impact or bearing on any other bids from other strategics or any of the process that Red Oak Minerals is conducting. So we are still planning to release that information as soon as it is signed off by the board. And that process is nearing a final completion. Another question was whether there would be an intention by Red Oak Minerals or the Heeni Capital Group to delist ZIOC. HENI Capital has not expressed any desire to attempt to force any delisting process. In fact, HENI Capital have been very supportive of retaining ZIOC as a listed entity, a listed entity that would retain a stake in the project, secure the long term cash flows associated with that and retain exclusively for ZIOC ownership of that long term valuable royalty. So we have no intention of ever entertaining any delisting of ZIOC at all. And we believe that investors, once they wrap their heads around this complex transaction and understand the value walk that we've just taken them through, we'll certainly want to see ZIOC remain as a listed business.

32:27 Another question revolves around the royalty buyback. We have covered that we think with a lot of information around value. Effectively, the value that the buyback has been structured at is 10 times the annual payments, approximately nearly 10 times the annual payments from the royalty in stage one. And so we think it represents very attractive value for ZIOC. Obviously, there was a negotiation that took place. ZIOC fought hard for a royalty, and we're very pleased that we secured the royalty and after an intensive negotiation structured a deal that works out very well and provides a lot of value for ZIOC shareholders.

33:16 Another question has come around conflicts management. This is a related party transaction. And as a result, there has been very strict adherence to conflicts management. The board of directors as well as its advisers, legal and nomad and brokers have all been involved in managing that related party transaction, as well as the support that I am providing to RedOgMinerals to assist with all the sort of financial modeling that I have historically been doing for the asset and some of the debt and strategic investor engagements

33:53 that have taken place in the past. And so very strict complex management process has been run to ensure that ZIOC shareholders are protected and that the board of directors is managing the process in a very clear and transparent manner with the support of its financial advisors.

34:12 I think it's also important at this point in time to talk about ZIOC's own protections at the shareholder level of the asset company. We've had questions about how ZIOC will be protected in its remaining 12.5% ownership stake in the project. The process that's being undertaken right now is the drafting of that detailed shareholder agreement, and we have top quality lawyers drafting the shareholder agreement in conjunction with Redarc Minerals to ensure that standard reserved matters, governance matters and shareholder protections are in place for ZIOC such that ZIOC has representation on the board, dilution protection and the ability to influence and decide on next steps around the project's development and financing.

35:07 So that work is being undertaken right now and is being done by top quality lawyers acting on behalf of ZIOC. I think it's probably a good time now to go on to some of the individual questions that are now coming across live on the Q and A platform.

35:32 So John asked about the dilution. So as we've explained earlier in the presentation, what is happening here is that we've effectively now financed the full FEED development phase to a construction decision at 15p per share, absolute worst case scenario for ZIOC 15p per share. As Marty mentioned, if we had gone and raised $25,000,000 in the open market to fund the project, that would have equated to a very dilution refund raise for ZIOC shareholders, something we wanted to avoid. And normally those kinds of fundraisers take place at discounts to share prices at the point in time. Instead, we've raised this money at a 150% premium to the share price.

36:28 That is very difficult to achieve and we're very proud of ourselves for having done this fundraise at that premium. In addition, the dilution that would take place at the asset level, if it does take place, Red Oak Minerals triggers tranche two would result in ZIOC receiving 125,000,000 of cash, still retaining the royalty upside and still retaining the right to own a very significant free carried effective interest in a highly cash generative asset. Red Oak Minerals still has to come up with all the capital to finance the remainder of the project. And so as the expression goes, the pressure is on the back of Red Ark Minerals to deliver the funding for the construction decision, debt and equity packages and ZIOC retains the right to fund or take back control of 100% of the project at a value accretive price for ZIOC shareholders.

37:39 Another question came around the buyback mechanism. I think we've now addressed that and explained the multiple. I know Ian and John, you've asked about the valuation of the buyback. As I mentioned, it's being valued at 10 times.

37:59 So Red Oak Minerals has to pay 10, the effective 10 times of the because they're buying half of the royalty back and the annual royalty payments are approximately $11,000,000 per year in that initial tranche. So they're paying 50,000,000 for half of it. So they're paying 10 times the royalty payments value. Another question from Ian around Hini Capital and the fact that it is backing Red Oak Minerals and has also invested in ZANAGA IRON ORE COMPANY. Very grateful for the significant support that Healy Capital has provided at the ZANAGA IRON ORE COMPANY level, critically funding the vast majority of the buyback and cancellation of the Glencore shareholding, unlocking us from that situation where it was challenging to progress the project at that point in time.

39:07 And we are also very grateful that Heaney Capital are backing this transaction at a premium to the share price, 150 premium to the share price. So another question, Presumably a question from Chris around ZIOC being liable for 12.5% of the debt. No, that's not correct. The ZIOC would not be liable for 12.5% of the debt. The debt processes when financings of transactions take place at project levels. Of course there are the security provided over assets by the debt providers, large scale banks, for example.

39:56 The important thing to bear in mind here is that there'll be no guarantees over that debt provided by ZIOC. ZIOC is only liable or at its option, I should say, is only on the hook should it wish to consider funding $125,000,000 of the notional billion dollar equity check going into construction. There is a chance by the way that if we get a larger quantum of debt in place, and we believe that it is possible to get a larger quantum of debt and certainly the asset is so low operating cost and so cash generative that it can wear a larger quantum of debt that ZIOC may not even have to put in its full $125,000,000 to stand its corner on the construction equity costs.

40:42 So for example, if we were to get the equity check down to $500,000,000 rather than a billion, ZIOC would only have to contribute approximately $62,500,000 of equity and would be able to retain or distribute back to shareholders the remaining amount. And we do not believe that there is any likelihood of ZIOC needing to fund anything more than it's 12.5% of that equity check. And Andy, just to note there as well. It's another reason that we have to respect our firm strategic milestones when it comes to the project.

41:32 And we've waited a long time. We've worked a long time to get to this point. And now that the clarity of the quality of ZANAGA products are now being distributed around the world. We can see that this unlocking event, being this RAM transaction, allows people then to start seeing into the future onto where ZANAGA would be placed on the world production stage. That note, and then Andy's note there that we might be able to raise via RAIM, a higher percentage of debt is now getting more interest as well. And it reinforces the decision to stick to this line in the sand that we've made.

42:20 Another question that came across from Julian is around the implications of the Sundance transaction in Republic Of Congo or the Sundance award in Republic Of Congo. That has no implication on us at all. We are completely separate from that and there's no bearing on us at all. And it was never ever part of our considerations. Okay, another question from Ian around supplier financing or third party credit arrangements. We have explored to fund the FEED work programme. We have explored every alternative available to us to finance the next phase of work.

43:15 So yes, we can confirm we've investigated every option to finance this next phase. And this is by far and away the best deal at a premium for a minority stake, where if they did trigger the acquisition of a majority stake, we would sit on substantial future optionality to create very large value for our shareholders. Taylor, I've already answered the question around if someone made an approach, we would then be in, if we were to receive an approach by somebody to acquire the asset prior to the EGM, then we would have the option to delay or reschedule the EGM. And it would depend of course on whether that offer was a valuable offer. And certainly we would welcome any party making approaches to offer a counter bid to this transaction.

44:35 Nigel, you've asked a question around whether ZIOC could have an option to increase its share in the project by investing the sale proceeds of the $50,000,000 royalty if it was actually bought back and received by Red Oak Minerals. That hasn't been something that's been agreed in our transaction with Red Oak Minerals. So at this stage we cannot do that, but we can certainly retain our 12.5% ownership. Kevin, you've asked if we can commit to answering all questions. We're answering every question that we have here on the platform.

45:20 And to the best of our ability, we're going through every single one and checking that we've answered them and we're just ticking them off one by one. Then you said here, share via published communication to demonstrate it's being open and transparent. We're being open and transparent. We don't have a publication plan. This Q and A and investor me company presentation will be available for future rewatching and review by any shareholder. And so it will be available for other participants to review and watch again and go over again. So all of this information that we're talking about right now will be available.

46:11 And that demonstrates further our commitment in investing our funds into investor meet company to manage this platform and provide a pathway of trans, of sort of communication with our shareholders. Yes. And then another question was around the lock in in September last year. Yes, it was a strategic investor who requested the lock in. We're not at liberty to disclose which strategic investor. Sorry, Julian, I see you've said that you want us to answer a question around Everblue.

46:57 We have, we cannot comment on behalf of our individual shareholders. So we will not speak for each shareholder. The shareholder vote will take place of course in June. But what we can say is that the largest shareholders have been very vocal about their support for this transaction. And we're very pleased to have received that confirmation of their support. Ben you've asked about how likely, how highly do you rate the likelihood of an incoming bid based on your historic negotiations with other parties? To be honest, it's impossible to answer. We have no idea.

47:44 We've spoken to lots of parties for many years and we can only wait to see if a competing bid comes across. Steve, you've asked about ZIOC having a seat on the board of the joint venture shareholder company, Jamelle's, after Ram triggers the acquisition of the 87.5% stake. You've asked about how much influence does ZIOC really have at that point in time? So we have a lot of experience in drafting shareholder agreements that build in protections to make sure that we will have very strong rights. We've also already negotiated and some of this has already been disclosed in the announcement that was put out that we will have this representation and standard customary reserve matters on things that are critical around the project's development and financing.

48:54 We've Ian asked a question about why ZIOC agreed to this deal before the completion of the value enhancement stages. We've already announced the key value enhancement stages. Those are already baked and the upside that has concluded from those value enhancement stages has already been disclosed. And we would encourage our investors to understand that we're not expecting any significant value enhancement items to be announced in the near term either, near or medium term for that matter. The focus there is on completing detailed engineering from the work which has been announced. Taylor, you've asked about whether we will actively approach other interested parties in order to challenge RAM's offer. We've already spoken to all of the typical parties that would invest in this kind of a project.

49:59 They're all aware we've informed them of the transaction. They're aware of it. The opportunity is there for them. Our door is wide open. They can make an offer. We've engaged all of them and made sure they're aware of this transaction, yes. Question from John here about who the leading mining industry veterans are in RAM. Are they related to Greymont via Heeney? And are there any other entities that are part of RAM?

50:46 So we've already disclosed obviously McDavis and Heeney Capital themselves. We haven't disclosed any of the other entities involved in RAM and in due course we will ask RAM if we can provide a bit more detail around those individuals as well to you. But that's something we just need to check with Ram. No issue from our side, but we just, know, out of respect, we just need to check with them as well. You've mentioned here, Desmond, the question around the other beneficial owners of Gulf Iron and Steel. Gulf Iron and Steel is an entity affiliated with Greymont Bay.

51:33 And so, and that is the information we've disclosed to the market. We provided information of that and the entities affiliated and the Greymont Bay backers are also publicly disclosed and announced as well in previous announcements. David, you've put up a comment here about how shareholders had a vision of a 9F buyout. Oh, okay. Yeah, no. And I see that. Thank you. Were saying thank you for the work that we've done there. Thank you very much. We continue to work on trying to do everything we can to unlock value from here as well. And certainly, as I think we've outlined in the slides, this is at a significant premium prior to announcement and it's a very significant premium today. We understand and we're apologetic about the fact that this transaction is complex to understand.

52:45 And hopefully now these slides will support the shareholders ability to understand its various complexities. Another question around the Gulf Finance deal offtake agreement. Yes, is signed. It is signed and it is a commercial agreement in line with standard offtake transactions. Yes, I think we've answered that one then. Thanks James. We have also Ian just a question around whether we had tried to look at royalty, sales of a royalty to fund some of this future work.

53:45 And Ian, we can tell you that we have tested it and the interest and pricing around buying a royalty at this stage was at fractions of the $100,000,000 partial buyback price that Red Oak Minerals agreed to fractions. So we have secured a royalty structure for ourselves that really values highly this royalty at 10 times the cash payments when it's actually producing. So we think we've got a great deal on the royalty value here. Certainly pre FID. Upon a construction decision, many other companies have seen a crystallisation of what their true royalty potential would be.

54:31 And again, that's going to be in the hands of ZIOC at that point. Julian, you've asked a question about what percentage shareholder vote is required at the EGM to proceed with the Red Hawk Minerals transaction. A 51% vote on the day is required to proceed with the transaction. So Roy, you asked about the value of the royalty and how we've said that it's such a valuable thing. And why did we agree to a buyback mechanism?

55:18 Mean, let's be clear, Obviously Red Oak Minerals didn't even want a role to be in place for ZIOC and we were absolutely insistent that we had to have a royalty. There was a very lengthy and intensive negotiation around it. And we're very pleased with the outcome and that we've retained a large royalty 0.5% on an asset of this size and this revenue generation is huge. But we started 1% if they want to buy that down to 0.5%, they've got to pass an additional $50,000,000 on top. Just bear in mind that if they do that, they would have paid us 125,000,000 of cash plus 50,000,000. We would have $175,000,000 of cash. Our share price today, our market cap today is $65,000,000 We would receive 175,000,000 of cash.

56:08 We'd still own 12.5% of the project and have the ability to fund our 12.5% And we'd still have a 0.5% royalty on top for the long term. So we think we've got a really great deal here. David, you asked a question around Chinese interest in the project. We have, of course, engaged with Chinese parties and welcomed them into the process. And so we've also engaged with them, yes. Taylor, you asked if we are now actively in the shop window, I. E. Are we available for sale? We've always been available for sale. The project's always been available for sale.

56:54 It's all about value and we want proper value for our shareholders as I hope you would expect we would. And so anyone can make an offer and the board is available to entertain such offers. Christopher asked a question around project power. Marty, do you want to comment on that risk to securing power for the project in the long term? Sure. There's two critical project pillars, as we call them, then for the project. And again, they start with P power and port facilities. So we've been engaging since we published or announced those MOUs with Arise's Special Economic Zone and E and I's joint venture with the Congo State, which is named CEC, between December 24 and January 25.

57:54 Those discussions have continued to advance and the engineering basis for both port infrastructure and export infrastructure, as well as power generation and transmission infrastructure as part of this $25,000,000 work programme. Okay, I'm just going to deal with a question here from David. So the great thing David asked a question about this transaction. Does this transaction remove any future requirement for placing in the market and further dilution to shareholders? Or is there still a possibility that this will happen? As we've explained the benefit of this transaction is that $25,000,000 allows the project to be fully funded right through to a construction decision without any dilution to shareholders in the list code.

58:50 Now there will come a point in time where we may need to secure a little bit of money, a small amount of money from the market to fund that interim period, depending of course on whether Red Oak Minerals exercise that $125,000,000 buyback. If that is exercised sooner, then of course we will not need to raise any further money at all. And everything that we have done has always been to avoid raising money as much as possible, avoid diluting our shareholders as much as possible. And there may come a point in time where we may have to raise a small amount of money just to cover our list co costs, which are very low, But we're doing everything that we can to avoid that. And we'll continue to ensure that we avoid it as much as possible.

59:46 John, you've asked a question here about RAM agreed half a percent for $50,000,000 in the RAM royalty deal. Why did we not use the same valuation for the funding requirement for development with them? They're very different instruments, to be honest, John, very different instruments and very different types of funding and risk. So this, as we've mentioned, the share price was trading 7.5 to 8p per share. The effective purchase price that Red Hawk Minerals is paying for tranche one is 15p per share for a minority position. We've done a deal that is massive premium to the share price prior to announcement and a massive premium to the share price today.

1:00:33 That is a huge win for us for equity. Ron asked the question about if this deal is so good, why is the share price on the floor? So, and I don't know if anyone has deleted this before, but I think we actually answered that question before to be honest, Ron. So we can't comment as to why people sold shares immediately after the announcement of the deal. We were astounded to be honest because we actually have done a deal that's an effective see through valuation of 15p per share. We think that possibly it's because the transaction is complex and writing it all out in an announcement maybe didn't provide the right kind of clarification.

1:01:26 We did our best and we tried to communicate the deal terms to shareholders as much as possible. We even put the see through valuations there in the announcement, but we think that the complexity and we certainly understand from many shareholders that we've spoken to that some of them called us and were upset at first and they misunderstood the deal. But when we explained the deal to them again and repeated that explanation and took them through it, then actually everyone we've spoken to has subsequently said, oh, this is a fantastic deal. We didn't understand it at first. We thought that we were going to be diluted down to 12.5% of the royalty as well. That's not the case. The royalty remains exclusively for ZIOC. The equity optionality in the project is massive.

1:02:15 We have the ability to receive substantial cash payments at each step along the way, plus the option to then retain a stake of free carried interest in the project. The board of directors has always taken the view that if someone came along and fully financed this project into a construction decision that ZIOC would very happily be diluted at the asset level to retain a significant stake in that fully financed cash generative significant mining asset and that remaining 12.5% if ZIOC retains it and it's of course it's ZIOC selection would be extremely valuable. There are lots of entities that love to buy 10 to 15% stakes and fully financed massively cash generative assets like this.

1:03:03 So I hope that we've, we don't understand why the share price went down. We think it was confusion, misunderstanding. We acknowledge it's a complex transaction. We're sorry about that, but we hope that we're doing everything we can to try and at least explain this transaction and get people to understand it better because we can't understand why the share price would have gone down and why it's trading at 6P per share today when the effect of initial purchase price is 15p per share. It doesn't make sense to us either. Pete you've asked about how we have the quality product that every major country in the world wants for the green steel transition.

1:03:49 So why is there no interest in acquiring the percentage of the project? We actually have had lots of interest. We've just not have an entity step up to say that they want to fund the full project development cost and take the project on unilaterally. Red Oak Minerals has stepped up to do that and Red Oak Minerals is working with other entities that have voiced an interest in just being a participant in a consortium and not actually wanting to be on the lead of the development group. So John, you asked the question that what value did the company receive for the 20% marketing offtake agreement?

1:04:35 Well, it was a fantastic outcome for us. We landed up taking out the Glencore position and securing 80% of the offtake back for ourselves. Previously Glencore had 100 of the offtake and we got 80% of the offtake back ourselves without having to pay any price for it. That's why it was such a good deal for us. And the fact that Greymont Bay, the associated entity of Greymont Bay, Gulf Iron and Steel landed up with 20%. It was value accretive to us. We got Glencore out and we landed up retaining, getting back 80% of the offtake. That's the value that we got from us.

1:05:26 Joe asked a question around where the AGM will be. We will announce due course the location of the AGM, we'll let you know of course, that has to be done with lots of time in advance. If ZIOC decides not to contribute, its $125,000,000 to the project, what we are agreeing at the moment and negotiating at the moment is a mechanism about how that is treated. But we have a lot of options if I mean, knows? Let's imagine that there's a position where we take that we actually don't want to fund our 12.5% of the project. We would likely run a process to invite steel mills, trading houses, other strategics to buy that 12.5% from us and they can fund the 12.5%.

1:06:23 And as we've said, the valuation we believe is conservative. Having a construction ready project of this scale and quality will certainly then be a new valuation when we get to that point. Yep. And John, I see you've asked a question about Garfin and Steel. We've just answered that already. It's an entity affiliated with Greymont Bay. Okay. You've asked it again a minute later. I think we've answered those ones now. Yeah, we've explained that one. Bobby's asked the share price would only be 15 P of Ram was definitively proceeding with the development.

1:07:12 We're not so sure we agree with that to be honest Bobby like we'll have a fully construction ready fully financed to completion of detailed engineering project fully funded by Red Oak Minerals at an effective entry price of 15p per share. So we're not so sure why anyone wouldn't be valuing the stock at least that price today given the optionality because that's what effectively Red Hawk Minerals is committing to pay today for that minority stake. Right, Marty has just mentioned by the way that he does have an alternative meeting that he has to go to shortly. He may have to drop off, but I think that that's okay.

1:08:09 Pete asked a question here about in the past Mr. Alphic has provided a quote and he's absent in this RNS. There's no reason particularly for that. It was important we felt that Marty spoke for the transaction and the business, but we can confirm that Mr Alphic is very supportive and very happy with this transaction. And in due course, he has said that maybe he should have included a quote, but he was not considered at the time, but certainly in due course, we'll find out if he can include one as well and certainly before the EGM, but he's confirmed his strong support for this transaction.

1:08:54 He's very happy with the transaction. Ben asked about the FEED finance being funded faster by Red Oak Minerals. We've negotiated the payment structure to align with the payments of the FEED work programs. There's no need to accelerate it faster. That's already been negotiated and agreed. John, you asked the question about the, you said, how do we explain the transfer of 87% ownership prior to completion of the FEED and FED? We're not transferring 87% of the ownership prior to completion of the FED. We actually, we've done a deal where there is a significant premium that's being paid to fund that interim step. And that interim step is the critical phase that needs to be completed to get to that construction ready status. And that is the de risking capital that Red Rock Minerals are paying a massive premium We're delighted that they're paying a premium for it.

1:10:01 And it's only after that, that they then have to pay $125,000,000 of cash. Plus we keep 12.5% of the asset. Plus we keep the royalty. So we've retained extensive optionality. How anyone cannot see that if that is triggered versus our share price today at $66,000,000 market cap today versus $125,000,000 hard cash payment, where we complete those work streams. We're not so sure that the disconnect. Dollars 25,000,000 includes contingency John. Yes. So the $25,000,000 to get to FID includes full contingency as well as buffer capital that we wanted from Red Oak Minerals to allow us to complete the full project financing process and effectively fully funds at least the next two years of work on completion of FID as well as the project financing steps and advisors to get through full financing.

1:11:10 So the 25,000,000 includes a decent buffer of contingency capital for any unknowns as well as project financing and asset retention costs after the FID process completes so we can get that full financing package in place. Exactly. Antti, do you want to answer David's question around whether there's a possibility that the FEED and FIT work programme would complete earlier than eighteen months? Well, we'd certainly like to. Now, these are required steps, you know, whether we were talking about transaction such as this in 2019 or 2023, here in 2026. Again, to achieve all of this work to equator principles, as well as then to other indirect global standards, the work has to be undertaken in a certain way. And that takes a certain amount of time, as well as the engagement from some of the world's largest consultants, particularly in the process, the mine, environmental and social engineering spaces and sectors as well.

1:12:19 So the work, as I mentioned, has been well scoped. We've been working with these same project partners now for eighteen months. And now on the back of this transaction, we're actually able to mobilise the resources and get the work done according to the schedule. We're very happy on the transparency then between the project partners and through our risk management lens as well in keeping other NGO and other industry related advisors aware on how the project would be developed. And I can say that they're very, very satisfied in the way we've approached the work in the last ten years and specifically in the last two years with a very clear community and stakeholder engagement in Congo.

1:13:14 And this funding enables us then to take that to the next step. So as an investment consortium, and also from a global industry perspective, I'm very satisfied in their support, whether they're visible or invisible, in that we are approaching the project development in the right way. Ian you asked about why the first five, first three, five million tranches are the only ones that are binding in the first 25,000,000, and that's because Red Oak Minerals wanted to see, to have the ability to see the progress that Marty and the technical team are making before triggering the next fourth and fifth tranches.

1:14:08 Can they be accelerated? Marty's already done a very accelerated programme. The base case of course is conservative but Marty's already working on mobilising a number of these work streams. John, you asked about the extra 67.5% ownership being done at today's share price valuation. Well, it's not because if you look at the valuation that we outlined in the presentation, you can see that it's being done at a, I'll go back to the slide actually. You can see it's being done at a valuation that is nearly four times the current share price.

1:14:55 And it provides us not just with four times the current share price but it also provides us with twice the current share price in cash while we still retain three assets. So it's being done at a very significant premium and we still then have the cash to fund our corner on the project's construction. So we're put into a very advantageous position to have lots of optionality to take different decisions that work best for us. And I'll take Ben's note there. Thank you. Think that the world is frustrated currently, but when we take a microcosm around ZANAGA project, I'm very satisfied that we have not only engaged strategic investors globally in a number of different industry sectors as well, not just in finance and offtake and iron steel production.

1:15:59 But the transaction here that we are now getting into the long form detail of is highly valuable, still retains optionality, and then has a clear and transparent result then between ZIOC shareholders, as well as in the entry of Redarc Minerals. And so I thank you, not only for your patience over the past twelve or so years to get us to this point, but certainly for the last hour and a half of your time. I and the team appreciate that very much. Marty, Andrew, if I may just jump back in there. Thank you very much indeed for being so generous of your time there and addressing all of those questions that came in from investors. Of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback?

1:16:55 On behalf of the management team of ZANAGA IRON ORE COMPANY LIMITED, we would like to thank you for attending today's presentation. That now concludes today's session, so good morning to you all.