Zanaga Iron Lines up $25M in Deal with Red Arc

Why It Matters

The financing de‑risks Zanaga’s development, positioning the project for a faster final investment decision and signaling growing private‑capital interest in Central African mining assets.

Key Takeaways

• $25M initial tranche funds engineering, pre‑production work.
• Red Arc may own 87.5% after second tranche.
• ZIOC retains 1% royalty on iron‑ore concentrate sales.
• Deal structured to keep listed company non‑dilutive.
• Funding accelerates path to final investment decision.

Pulse Analysis

Zanaga Iron’s project in the Republic of Congo sits on a sizable high‑grade iron‑ore deposit that has attracted attention from both strategic miners and financial investors. Historically, African mining ventures have struggled to secure the deep‑pocket capital required to move from exploration to commercial production. By locking in a $25 million initial investment from Red Arc Minerals, Zanaga gains the engineering studies, permitting work, and infrastructure planning needed to demonstrate economic viability, a critical step before any final investment decision can be justified.

The deal’s tiered structure is noteworthy for its balance of risk and reward. Red Arc receives an immediate 20% equity position in Jumelles, the project‑holding subsidiary, while retaining an option to inject a further $125 million for a dominant 87.5% stake. This approach allows Red Arc to assess project milestones before committing the larger sum, and it protects Zanaga’s shareholders by keeping the listed entity non‑dilutive. Moreover, the 1% net‑sales royalty retained by ZIOC ensures a continuing revenue stream even if the majority ownership shifts, aligning incentives for both parties to achieve commercial production.

For the broader Congo mining sector, the transaction underscores a shift toward private‑equity‑driven financing models that can bypass traditional bank lending constraints. Successful execution could catalyze additional investments in the region’s mineral corridor, improve export infrastructure, and enhance the country’s fiscal revenues. Investors will watch closely for the due‑diligence outcomes and regulatory approvals, as the deal’s completion could set a precedent for future partnerships between listed African miners and specialist private investors seeking high‑potential, under‑developed assets.

Zanaga Iron lines up $25M in deal with Red Arc

Staff Writer · February 10, 2026 · 3:47 am

The Zanaga project is located in the south‑west of the Republic of Congo, close to the border with Gabon. (Image courtesy of Zanaga Iron Ore.)

Zanaga Iron (LON: ZIOC) has signed a binding term sheet with Red Arc Minerals that could see up to $25 million invested to advance its namesake iron‑ore project in the Democratic Republic of Congo towards a final investment decision.

The agreement outlines a staged investment by Red Arc Minerals, a private group founded by mining veteran Mick Davis, starting with an initial tranche of up to $25 million in cash to fund engineering and other pre‑production work. That funding, to be paid in five equal sub‑tranches, would earn Red Arc an aggregate 20 % interest in Jumelles, Zanaga’s subsidiary and the project owner.

A second tranche gives Red Arc the option, exercisable within 18 months of completing the first stage, to pay $125 million in cash to ZIOC for an additional 67.5 % fully‑diluted stake in Jumelles, lifting its ownership to 87.5 %. If that option is exercised, ZIOC would retain a 1 % net‑sales‑revenue royalty on iron‑ore concentrate sales, with Red Arc able to buy back half of the royalty for $50 million.

ZIOC said the structure leaves the listed company itself non‑dilutive, with chief executive Martin Knauth calling the transaction a major acceleration enabled by capital that allows the project to move through the pre‑production phase and towards a final investment decision.

The transaction remains subject to due diligence, the execution of definitive agreements, and approval from shareholders and regulators, as set out in the term sheet.