Perth-based emerging metallurgical coal producer ZYL Limited has successfully renegotiated the acquisition of the Southern Anthracite Project in the Mpumalanga Province in South Africa. ZYL now has the right to acquire a 70 per cent interest in the Southern Anthracite Project, an increase of 14 per cent direct interest in the project compared to the previous agreement. “The renegotiation is approximately A$3.15 million less than the original acquisition price and is a great outcome in terms of capital management,” said ZYL Managing Director Dr Eric Lilford.
The new share sale agreement gives ZYL complete control over the timing of a Bankable Feasibility Study (BFS) for the Southern Anthracite Project. “This outcome is significant because it allows us to prioritise our resources, better manage our capital and implement our corporate strategy of developing Kangwane for anthracite exports whilst developing Mbila to supply domestic customers in the high quality ferro smelting and mineral sands industries,” said Dr Lilford.
Preliminary studies indicate the quality of anthracite for the Southern Anthracite Project has similar specifications to Kangwane and is well suited for export. “In terms of our corporate strategy, we intend to develop the Southern Anthracite Project soon after the Kangwane Project commences production to reduce ZYL’s reliance on a single mine for export and provide surety of supply for potential export markets,” said Dr Lilford .
“The next step in the Southern Anthracite Project is to better define the resource through further exploration and release a JORC Code compliant update,” said Dr Lilford. The new structure and commercial terms of the acquisition are detailed in the appendix.