Zanaga Iron Ore Co Ltd (AIM:ZIOC, FRA:6ZA) announced it is seeking a financial adviser to review funding options for its iron ore project in the Republic of Congo, after its board determined that Red Arc Minerals was unlikely to complete its proposed equity investment by 30 November.

The companies first disclosed the proposed investment in February and have continued talks since Red Arc’s exclusivity expired on 31 July. Several matters still need agreement, and Zanaga has already begun exploring other ways to fund the project.

“We have made encouraging progress with Red Arc Minerals and remain committed to working constructively with RAM to explore the proposed transaction,” said ZOIC chair Clifford Elphick, adding: “However, recognising that further matters need to be agreed, we believe it is prudent to broaden our financing options and undertake a strategic review of all available alternatives, to maximise value for all shareholders and stakeholders.”

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The Red Arc proposal remains among the options the adviser will assess.

Zanaga said Red Arc had provided evidence of progress towards securing financing of up to US$500 million.

Technical work continues at the wholly owned project. Zanaga has completed its bulk sampling programme and plans to carry out metallurgical testing and further engineering work.

Elphick added: “we continue to advance the technical development of the Zanaga Project. The successful completion of the bulk sampling programme is an important milestone, and forthcoming metallurgical testing and engineering work will further strengthen the Project’s technical foundation.

“Our priority remains to secure the right funding solution to unlock Zanaga’s significant long-term potential.”