Ann: Mbila Further Update , page-12

ZYL Limited acquires Kangwane North anthracite in revised deal
Tuesday, February 19, 2013 by Proactive Investors


ZYL Limited (ASX: ZYL) has negotiated a new agreement with York Energy NL to acquire the Kangwane North Project on new terms.

The re-structured agreement will provide ZYL with a right to acquire up to a 70% stake in Kangwane North anthracite project in South Africa.

Importantly for ZYL it will consolidate ZYL’s strategic anthracite holdings within the Kangwane Coal field.

It alspo enhances the flexibility and synergies that can be harnessed with the nearby Kangwane Central and Kangwane South projects.

Deal terms

The original York transaction that was announced to the market on the 25th May 2012, valued the acquisition of York at $12 million.

In the revised agreement ZYL will acquire York's rights to acquire up to 70% for the issue of 35 million shares in ZYL. On current ZYL price, this would be a running price of A$595,000.

There will also be a retirement of a loan between the parties related to the 25 May 2012 agreement that was used to fund Yorks operational obligations of the Mbila transaction.

CEO Ian Benning said, “This acquisition provides ZYL with interests in three strategic anthracite projects within the Kangwane coal field.

It will provide ZYL with potential synergies with Kangwane Central and Kangwane South in terms of management, coal washing plant and technical facilities and the blending of different product qualities.

It will also offer the prospect of reducing capital expenditure and operating costs. It will also provide the company with an access to an additional rail siding on the main rail line between Maputo and Gauteng, the economic hub of South Africa”.