Proposed Strategic Investment in Zanaga Project

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"), AND IS DISCLOSED IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF MAR

10 February 2026

Zanaga Iron Ore Company Limited

("ZIOC" or the "Company")

Binding Term Sheet Signed for Proposed Strategic Investment in Zanaga Project

Zanaga Iron Ore Company Limited (AIM: ZIOC) is pleased to announce a strategic transaction with Red Arc Minerals Inc ("RAM"), a private investment company backed by leading mining industry executives and focussed on the development of strategic-scale high-grade iron ore assets.

ZIOC and its wholly owned subsidiary, Jumelles BVI Limited ("Jumelles"), have signed a binding term sheet ("The Binding Term Sheet") for a proposed strategic investment by RAM (the "Transaction") in the Company's Zanaga Iron Ore Project (the "Zanaga Project" or the "Project").

The proposed strategic investment by RAM would enable the completion of essential technical work to advance the Project towards a Final Investment Decision ("FID"). It would also secure additional upside value potential and further optionality linked to the successful development of the Project for the benefit of ZIOC shareholders and stakeholders in the Republic of Congo. As a result, the Board believes that the Transaction has the potential to deliver meaningful value to ZIOC shareholders both in the short and long term, while also being non-dilutive to ZIOC shareholders.

The Transaction is subject to the completion of due diligence, entering into of definitive documents as well as approval by shareholders and regulators as set out in the Binding Term Sheet.

Jumelles is a wholly owned subsidiary of ZIOC and currently holds a 100% interest in the Zanaga Project.

Transaction highlights

· Binding Term Sheet agreed with RAM, setting out the principal terms of proposed staged investments in the Zanaga Project via two tranches, which would deliver substantial financing that is non-dilutive to ZIOC shareholders.

· Tranche One investment of up to US$25 million in cash to advance the Zanaga Project to FID and acquire an aggregate 20% interest in Jumelles (to be funded in five equal sub-tranches).

· Tranche Two investment of US$125 million via a cash payment to ZIOC (at RAM's option) to acquire an incremental 67.5% fully diluted ownership of Jumelles from ZIOC (resulting in aggregate RAM ownership of Jumelles of 87.5%), exercisable within 18 months of completion of the full US$25 million Tranche One.

· Royalty granted to ZIOC on the closing of Tranche Two of 1.0% of Net Sales Revenue ("NSR") on all iron ore concentrate sales from the Project, subject to a partial buy-back at RAM's option (US$50 million for 0.50%).

· From the closing of the Transaction, RAM will have the right to representation on the Jumelles board and to reserved matters. Upon reaching 50.1% or more ownership of Jumelles RAM will be granted the right to majority board representation.

· From the closing of the Transaction, the Company shall have the right to require RAM to exchange its Jumelles shares for ZIOC shares at a price of 15.0 pence per share (which represents a ZIOC market valuation of £125 million (c.US$169 million[1]), a 96% premium[2] to the ZIOC 30-day VWAP, if RAM does not complete each Tranche One and Tranche Two closings within a defined period.

· The Transaction is a fundamental change of business for the purposes of AIM Rule 15 and is therefore subject to shareholder approval, by way of ordinary resolution at an Extraordinary General Meeting ("EGM") of the Company, as well as definitive documentation, amongst other things.

· ZIOC has agreed to exclusivity provisions until 30 June 2026 (which may be extended) and a Break Fee of US$1.5 million payable to RAM as well as an Alternative Transaction Fee within 12 months after the exclusivity period, if applicable.

· Completion of the definitive long-form documentation (including a joint venture agreement) is targeted by 31 May 2026, and an EGM to approve the Transaction is targeted by 30 June 2026.

RAM is backed by, among others, certain individuals and groups who participated in ZIOC's fundraising in 2025, including Sir Mick Davis and Heeney Capital. Entry into the Binding Term Sheet is a related party transaction for the purposes of the AIM Rules. Pursuant to the definitive documents, the Company also expects the Transaction to be a related party transaction for the purposes of the AIM Rules.

Martin Knauth, CEO of ZIOC, commented:

"I am pleased to announce the signing of binding terms with Red Arc Minerals, a company founded by Sir Mick Davis and Heeney Capital to invest in strategic high-grade iron ore assets.

"The transaction represents a major acceleration of the Company's growth strategy by providing the non-dilutive capital required to advance the Zanaga Project through the pre-production phase and towards a final investment decision.

"The transaction aims to deliver significant value to ZIOC shareholders, in the short and long term, by creating a clear pathway to retaining a strategic ownership stake and securing a compelling royalty interest in a world-class producing iron ore asset.

"Through our extensive strategic partnering process, we believe this proposal provides the greatest opportunity for the Company and its shareholders to participate in the success of the Project as it advances towards production.

"Red Arc Minerals brings both financial strength and deep industry expertise that enhances our ability to deliver the Project. Our established relationship with some of the mining industry's most respected leaders continues to mature, and this transaction is indicative of their confidence in the Project's world-class technical and financial credentials.

"I look forward to addressing shareholders and interested parties at our forthcoming investor event in Cape Town."

Investor Event

The Company will provide an update on the Binding Term Sheet and Transaction at its investor event during Mining Indaba 2026, on 10 February 2026 at 3 pm South African Standard Time, at the Mount Nelson Hotel, Cape Town, South Africa. A copy of the presentation will also be made available on the Company's website.

Rationale for the transaction structure

The Transaction, as envisaged in the Binding Term Sheet, has been structured to achieve multiple objectives for ZIOC shareholders, which are summarised below:

1. Limiting dilution to ZIOC shareholders

· The transaction envisaged would not result in direct dilution to ZIOC shareholders as it is an investment at the Jumelles subsidiary level and the Tranche One investment may only potentially be converted into ZIOC shares by either party at 15 pence per share (and subject to certain conditions and restrictions).

2. Advance the Zanaga Project to a FID

· Tranche One is expected to fully fund the Project through Front End Engineering Design ("FEED") completion to FID, including capital available for contingency and continued Jumelles project working capital costs to cover the final financing negotiation phase of the Project post FEED.

3. Near-term path to significant floor price cash value (via Tranche Two payment)

· If RAM exercises the Tranche Two option, US$125 million of cash will be received by ZIOC, which may be distributed to ZIOC shareholders in due course (equating to 11 pence per share).

· ZIOC intends to retain this cash on the Company's books until such time as the Zanaga Project FID is taken, in order to consider the attractiveness of investing it to retain an equity stake in the Zanaga Project going forward (such decision will depend on the project economics at the time of the Project's FID).

4. Optionality to retain 12.5% project ownership

· The envisaged transaction has been structured to enable ZIOC to fully fund its pro-rata 12.5% share of an estimated US$1 billion total project equity contribution required from the final equity investors in the Project at construction.

· In the event that ZIOC elects to fund such pro-rata 12.5% final equity contribution at construction, ZIOC would have retained a sizeable share of a fully financed strategic iron ore asset with highly attractive economics.

· By way of illustration, if the Zanaga Project generates EBITDA of US$2 billion per annum in Stage Two, ZIOC's attributable share of such EBITDA would equate to US$250 million per annum, or 22 pence per share per annum to ZIOC only (with no RAM participation).

5. Royalty upside to ZIOC shareholders only

· The transaction structure envisages a 1% NSR royalty to be paid to ZIOC only (subject to a partial buy-back at RAM's option of US$50 million for 0.50%), which enables additional substantial value upside that is indifferent to the Project's economics.

· ZIOC is not expected to need to invest further in the Zanaga Project to receive this annual royalty payment.

· By way of illustration, based on a 1% NSR royalty if the Zanaga Project generates US$3,246 billion of net sales revenue per annum in Stage Two, the NSR royalty payable to ZIOC would equate to US$32.5 million per annum, which would equate to 3 pence per share per annum to ZIOC only (with no RAM participation).

Principal terms of the envisaged Transaction (as set out in the Binding Term Sheet)

Parties

· Zanaga Iron Ore Company Limited

· Jumelles BVI Limited, a wholly owned subsidiary of ZIOC

· Red Arc Minerals Inc, a private investment company incorporated in the United States of America

Tranche One - subscription for up to 20% of Jumelles for up to US$25 million to fund the Zanaga Project to FID

Subject to satisfaction of the relevant conditions (including due diligence, definitive documentation and shareholder approval), RAM is proposed to subscribe, in a series of primary issuances, for newly issued common shares in Jumelles (the "Common Shares") representing in aggregate 20% of the outstanding Common Shares for total cash consideration of US$25 million ("Tranche One").

Tranche One is proposed to be funded in five sub-tranches of US$5 million each, with each sub-tranche representing 4% of the outstanding Common Shares. The first sub-tranche is expected to close as soon as reasonably practicable following completion of long form transaction agreements, final due diligence, and securing of ZIOC shareholder approval. Subsequent sub-tranches are expected to be completed over the following 18 months in accordance with the definitive documentation, with sub-tranches 1A, 1B and 1C being binding on RAM, sub-tranches 1D and 1E will be at RAM's option, and RAM having the right to accelerate the timing of subsequent sub-tranches.

Tranche Two - RAM option to purchase a further 67.5% interest in the Zanaga Project from ZIOC for US$125 million

At RAM's election, RAM has the right, within 18 months following completion of the final Tranche One sub-tranche, to purchase, from ZIOC, additional Common Shares in Jumelles for US$125 million in cash (Tranche Two), resulting in RAM holding an aggregate 87.5% fully diluted ownership of Jumelles.

Exchange of shares

If on or after 30 June 2027 the conditions for each Tranche One sub-tranches closing have been satisfied, the Company and Jumelles are not in breach of the agreement, and RAM does not complete each Tranche One and Tranche Two closings, the Company has the right to require RAM to exchange its Jumelles shares for Company shares at 15.0 pence per ZIOC share for the amount invested by RAM (which represents a ZIOC market valuation of £125 million (c.US$169 million1), a 96% premium2 to the to the ZIOC 30-day VWAP). RAM also has that right to require exchange its shares in Jumelles for shares in the Company at that price after the expiry of three years from the date of the definitive documents, if the Company was entitled to but has not required RAM to exchange the Jumelles Shares. Based on today's issued share capital, if the entire Tranche One US$25m is ever converted into ZIOC shares, RAM would own at most 13% of ZIOC. The Board has agreed that it will not invoke the Takeover Provisions in Article 33 of the Company's Articles Association in respect of such conversion.

Royalty (to ZIOC only)

Upon completion of any Tranche Two closing, ZIOC would be granted a 1.0% NSR royalty on net sales revenues from iron ore concentrate sales from the Zanaga Project by the relevant project-owning entity (the "Royalty").

Royalty payments (once payable) are proposed to be made semi-annually on 31 March and 30 September.

Jumelles would have the right to reduce the Royalty to 0.50% NSR upon payment to ZIOC of US$50 million in cash.

Joint venture agreement and governance

The parties intend to enter into definitive long-form documentation, including a joint venture agreement (the "JVA"), expected to govern, among other matters:

· The terms of the joint venture and control/management of the Zanaga Project

· Funding and work programmes

· The composition of the Board of Jumelles and reserved matters

· The annual budgeting process and approval framework

· Information and reporting required for ZIOC's public disclosures

Jumelles Board representation (indicative):

· Following the initial closing: four directors (RAM nominated: two; ZIOC nominated: two)

· Following RAM reaching 50.1% or more ownership (the "Governance Flip"): RAM may designate three directors and ZIOC one director (with ZIOC's director designation rights ceasing if ZIOC's ownership falls below 5%)

Liquidity and project financing provisions (indicative)

Subject to the definitive documentation and relevant regulatory approvals, and following completion of Tranche One and Tranche Two, RAM would have certain rights to pursue a sale of Jumelles (subject to an equity valuation threshold) or to progress a financing constituting a final investment decision in respect of the Zanaga Project, with ZIOC and other equity holders required to participate on the terms set out in the definitive documentation.

ZIOC equity issuance

From the closing of the first tranche until the expiry of the Tranche Two Option, RAM will be provided with a right to participate in any ZIOC equity raise, up to the minimum of the Heeney Capital or Red Arc Minerals related Concert Party holding, or 30% (less any shares taken up by a member of the Heeney Capital or the Red Arc Minerals related concert party).

Conditions and other provisions

Completion of the Transaction will be subject to customary conditions for a transaction of this type, including confirmatory due diligence, approval by the Company's Board, shareholder approval, execution of definitive documentation and receipt of any required regulatory approvals.

Exclusivity and Break Fee and Alternative Transaction Fee

The Binding Term Sheet includes exclusivity provisions through 30 June 2026 (subject to renewal mechanics for up to three, 30 day, extensions if RAM is continuing to pursue the transaction).

ZIOC has agreed to pay RAM a Break Fee of US$1,500,000 if it or connected parties breach the exclusivity provisions in the Binding Term Sheet or if they do not proceed to definitive documentation where RAM is willing to on the terms in aggregate no more onerous that those set out in the Binding Term Sheet. This fee will not be payable where definitive documents are entered into but the ZIOC shareholders do not approve of the transaction.

In addition, where Break Fee has become payable or if an alternative transaction is announced prior to the meeting at which the approval of ZIOC shareholders is sought and the ZIOC shareholders do not approve the transaction and, definitive documents for an alternative transaction are executed within twelve months following the end of the exclusivity period (including any extensions thereof), then a further alternative transaction fee will be payable to RAM equal to 10% of the consideration under the alternative transaction.

Timetable and next steps

ZIOC and RAM have agreed on the following timetable:

· By 31 May 2026: execution of the definitive long-form transaction documentation, including the JVA

· By 30 June 2026: convening of an EGM for shareholders to vote on the Transaction

A shareholder circular containing further details of the Transaction, together with a notice convening the EGM, will be published in due course.

Related party transaction

RAM is controlled by Heeney Capital, which is a related party of ZIOC for the purposes of the AIM Rules by virtue of being an associate of a Substantial Shareholder of ZIOC. Heeney Capital controls and makes all investment decisions for, Greymont Bay I LLC and Regatta HCRP I LP, which in aggregate own 25.26% of ZIOC's issued share capital. Therefore, RAM is a related party of ZIOC for the purposes of the AIM Rules.

As the Break Fee and alternative transaction fee summarised above are binding from execution of the Binding Term Sheet, the entry into the Binding Term Sheet with RAM is a related party transaction for the purposes of the AIM Rules for Companies. The Company's independent directors, being all of the directors with the exception of Philip Mitchell who is a representative of Greymont Bay, following due and careful consideration and in consultation with the Company's Nominated Adviser, Panmure Liberum Limited, consider the terms of the Break Fee and the Alternative Transaction Fee in the Binding Term Sheet to be fair and reasonable insofar as all shareholders of the Company are concerned.

For further information, please contact:

ENDS

About ZIOC:

Zanaga Iron Ore Company Limited (AIM ticker: ZIOC) is an iron ore exploration and development company, with its flagship asset being the 100% owned Zanaga Iron Ore Project, located in the Republic of Congo. The Government Mining Licence, Environmental Permit and Mining Convention are all in place for the Project.

The Zanaga Iron Ore Project is a globally significant asset with a 6.9 billion tonne resource and a 2.1 billion tonne reserve, targeting 30Mtpa production of high-grade DRI pellet feed with very low impurity levels. When fully developed, Stage One (12Mtpa) and Stage Two (18Mtpa expansion) together could establish Zanaga as one of the world's largest iron ore mines. With all key permits secured, Zanaga is well positioned to benefit from increasing demand for high-quality, low-impurity iron ore, supported by low operating costs and an efficient slurry pipeline to port.

In the context of the global transition towards lower-carbon steel production, the Zanaga Project is well positioned to become one of the largest producers of high-grade, premium DRI pellet feed iron ore concentrate.

The Zanaga Iron Ore Company Limited LEI number is 21380085XNXEX6NL6L23.

About RAM:

RAM is a private investment company focussed on the development of strategic-scale high-grade iron ore assets. RAM is controlled and founded by Sir Mick Davis and Heeney Capital, and other leading mining industry executives and experienced investment professionals. Its team has extensive technical expertise in large-scale project financing and development, along with a proven track record of project delivery, including specific iron ore expertise.

Andrew Trahar acts as Corporate Development & Investor Relations Manager of ZIOC, pursuant to a consultancy arrangement with ZIOC. Given Andrew Trahar's extensive Project expertise, the ZIOC Board has consented to him also providing consultancy services to RAM, to assist RAM in its subsequent engagement with strategic stakeholders.