PERTH (miningweekly.com) – South Africa-focused coal developer ZYL has decided not to continue with the acquisition of the Mbila anthracite project in KwaZulu-Natal, cancelling an associated A$5.6-million capital raising.
The announcement comes as ZYL announced in May that it was reviewing its assets to determine their appropriateness for operational mining purposes.
Nonexecutive chairperson Yuzheng Xie said at the time that the aim of the review was to rule out assets that were marginal, high risk or which required considerable additional exploration.
The Mbila project was estimated to have a Joint Ore Reserves Committee-compliant resource of some 125-million tonnes of anthracite.
Under the terms of a revised settlement agreement, ZYL said on Monday that it had agreed to pay the Mbila vendors some A$350 000 by July 3, and a further A$150 000 by September 25.
On the payment of the second tranche, the parties have agreed to release each other from further claims.
Shareholder Prestige Glory has agreed to provide a A$1-million convertible note which would be drawn down in two tranches, providing ZYL with the working capital to make the Mbila payments.
ZYL told shareholders that it would continue to hold its 42.86% interest in the Kangwane Central project, as well as a 70% interest in the Kangwane South project.
The board was also exploring the possibility of acquiring an additional interest in the Kangwane Central project.