Perth based ZYL Limited can now earn up to a 70% interest in the Southern Anthracite Coal Project in South Africa following the successful renegotiation of the initial agreement.

The new share sale agreement also gives ZYL complete control over the timing of a Bankable Feasibility Study for the project. ZYL initially agreed to acquire a 56% interest in the Southern Anthracite Project which is located in the Mpumalanga Province of South Africa.

It is approximately 100 kilometers from the coast to the Matola Terminal at Maputo Port in Mozambique and approximately 25 kilometers to the south of ZYL's Kangwane Project.

The Southern Anthracite Project, which is similar to the company’s primary Kangwane project, is strategically located in close proximity to rail, port, water, electricity and roads.

Previous work undertaken on the project has confirmed a conceptual Exploration Target of between 90 and 190 million tonnes at an expected calorific value range of 22 to 28 mega joules per kilogram, unwashed. The renegotiation has led to an AUD 3.15 million reduction in the upfront acquisition cost.

Importantly, ZYL can now better prioritize its resources, better manage its capital and implement its corporate strategy of developing Kangwane for anthracite exports while developing Mbila to supply domestic customers in the high quality ferro smelting and mineral sands industries.

Preliminary studies indicate the quality of anthracite for the Southern Anthracite Project has similar specifications to Kangwane and is well suited for export.

The plan is for ZYL to develop the Southern Anthracite Project soon after the Kangwane Project commences production to reduce the company’s reliance on a single mine for export and provide surety of supply for potential export markets.

Under the new agreement, ZYL will acquire 100% of the issued share capital of Oakleaf Investment Holdings from Prosperitas Capital.

Oakleaf owns 20% of the issued share capital of Altius Trading, which is currently 50% owned by ZYL and owns a 100% interest in the Southern Anthracite Project.

ZYL will pay AUD 500,000 on signing of the new agreement and AUD 500,000 two months after signing the agreement. The company will also issue 3,472,000 ZYL shares, which were last trading at AUD 0.15, valuing the share issue at AUD 520,800.