Zanaga Iron Ore Company Ltd Mining Convention Ratification (5666C)

TIDMZIOC

RNS Number : 5666C

Zanaga Iron Ore Company Ltd

29 June 2016

29 June 2016

Mining Convention Ratification for Zanaga Iron Ore Project

Zanaga Iron Ore Company Limited ("ZIOC") (AIM:ZIOC) is pleased to announce that the Zanaga Iron Ore Project (the "Zanaga Project"), a joint venture with Glencore plc, has had its Mine Operating Agreement ("the Mining Convention") adopted as a law of the Republic of Congo ("RoC").

The Mining Convention covers the proposed staged development of the Zanaga Project and sets out the fiscal and legal terms with respect to the construction and operation of the Zanaga Project pursuant to its Mining Licence.

With effect from 20 May 2016, the Mining Convention has been promulgated as a law of the RoC (Law No 15-2016 of 29 April 2016), following ratification by the Parliament of the RoC and publication in the Official Gazette on 28 June 2016.

The ratification of the Mining Convention and its adoption as law is a significant milestone for the permitting of the Zanaga Project; it confirms, as a legal act, the provisions relating to the development and operation of the Project.

The Zanaga Project team continues to be engaged in advancing other key permits and agreements which are part of the ongoing process of establishing the operating framework for the Project.

Clifford Elphick, Non-Executive Chairman of ZIOC, commented: "I am delighted that the Zanaga Project has now had its Mining Convention approved and adopted as law. We believe this further demonstrates the Government of the Republic of Congo's support for the development of the country's mining sector and is testament to the Project's strong stakeholder relations.

This world class iron ore project has the potential to have a significant beneficial impact on the RoC, both at the grassroots level around the Project site, as well as more broadly on the country's infrastructure and economy.

The Mining Convention, which establishes the Project's fiscal and operating regime, is now confirmed as an act of law. Such confirmation is expected to be well received by potential financial investors and lenders as the Project navigates the current challenges of the iron ore market."

Key terms of the Mining Convention

Duration of Mining Licence

-- 25-year operating licence effective from the issue of the Mining Licence (August 2014) and renewable for successive terms of 15 years and in accordance with the Mining Code.

Royalties and Tax

   --    A mining royalty of 3% 
   --    Identification of the specific taxes which will apply to the Project 
   --    A 5 year tax holiday following the construction phase and a corporate tax rate of 15% 

Customs

-- Agreement of the customs regime which will apply to the Project, including exemptions from import duties and taxes on plant and equipment imported temporarily for project construction

Permitting

   --     Agreement of the permitting regime which will apply to the Project 

Land

   --    Agreement of the process by which land will be made available for development of the project 

State participation

   --    The RoC will receive a non-dilutory 10% stake in the Mining Company 

For further information please contact:

Zanaga Iron Ore

   Corporate Development and                               Andrew Trahar 
   Investor Relations Manager                                [phone] 

Liberum Capital Limited

   Nominated Adviser, Financial                             Richard Crawley 
   Adviser and Corporate Broker                             Neil Elliot 

[phone]

Bell Pottinger

   Financial PR                                                      Marianne Bowes 

and Daniel Thöle

[phone]

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.

This information is provided by RNS

The company news service from the London Stock Exchange

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June 29, 2016 02:00 ET (06:00 GMT)