¦Problems at Mbila(from marketcap.com.au link) posted by Sam222...

¦Problems at Mbila
(from marketcap.com.au link) posted by Sam222 last Friday. The full review can be found on their website.
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"In a rather bland release on the Mbila BFS in November, ZYL reported a “…lower than expected conversion from Resources to Reserves…”. This halved the share price on the day of the release. My take is this:

The deal to acquire the Mbila project required a small initial payment to earn 5%, but a much more substantial payment to acquire up to a 44% interest, subject to BFS completion. The BFS has effectively reported that the project is not what ZYL thought it was buying.

In December 2012 ZYL stated that, for the above reason, they did not believe the company was bound by the agreement. In January 2013 the company further announced that a condition precedent had not been met by the vendor and therefore the agreement had lapsed and all monies paid must be refunded.

Thus, it appears that the Mbila deal will be subject to renegotiation, termination, and perhaps ultimately litigation. Should ZYL be unsuccessful in any renegotiation or legal action, the company may not have the financial wherewithal to meet its remaining obligations under the agreement. However without pre-empting the outcome of any legal action, ZYL’s position does appear to be strong, based upon recent announcements."