Business
Xstrata Exercises Option over
Xstrata Exercises Option over.
About this update from Zanaga Iron Ore Co. Ltd.
[{"type":"text","content":"\n RNS Number : 8350A Zanaga Iron Ore Company Ltd 08 February 2011 \n \n\n \n \nXstrata Exercises Option over Zanaga Iron Ore Project\nJOINT NEWS RELEASE\n \nZug and London, 8 February 2011\nXstrata plc (\"Xstrata\") and Zanaga Iron Ore Company Limited (\"ZIOC\"), are pleased to announce that Xstrata has elected to exercise its call option over Jumelles Limited (\"Jumelles\"). Jumelles is presently a subsidiary of AIM listed ZIOC, and through its subsidiary MPD Congo owns the Zanaga iron ore project in the Republic of Congo. \nAs provided for in the call option agreement entered into by Jumelles and Xstrata, Xstrata will acquire a 50% plus one share interest in Jumelles in return for a commitment to fund a Feasibility Study to a minimum of $100 million. Upon exercise, Xstrata will commence work on the Feasibility Study, the first part of which will be a value engineering exercise, building on the pre-feasibility work undertaken by Jumelles. Following the exercise of the Call Option, Xstrata will control ZIOC's sole mineral asset, the Zanaga Project, and ZIOC will have a strategic partnership in respect of the Zanaga Project with Xstrata, a major mining company. \nFollowing the exercise of the Call Option, which is expected to complete on Friday 11 February 2011, the principal business of ZIOC will comprise managing its 50% less one share interest in the Zanaga Project, which will be controlled by Xstrata at both a shareholder and director level, and monitoring both the finalisation of the pre feasibility study (\"PFS\") and the preparation of the Feasibility Study.\nXstrata's decision to exercise its call option underscores its long stated strategy to enter the iron ore market. Xstrata has assembled an iron ore team, which is currently managed through Xstrata Coal. Taking the Zanaga Project with the projects acquired as part of Sphere Minerals, Xstrata has to date secured control of a resource base of more than 7 billion tonnes of iron ore. \nXstrata Coal Chief Executive Peter Freyberg said: \"Our decision to exercise our option to acquire management control of the Zanaga Project enables Xstrata to evaluate in greater depth the potential of the project, as part of our strategy to build a meaningful iron ore business over the medium term. \n\"We look forward to working with...