ZYL increases South Africa landholding

THE BOURSE WHISPERER: Perth-based emerging anthracite producer ZYL Limited has executed a binding Heads of Agreement for the acquisition of 100 per cent of York Energy.

The acquisition will entail a total consideration of $12 million worth of ZYL shares, less outstanding liabilities, the shares will be issued at approximately 18 cents per share.
 

Once completed, the acquisition will increase ZYL’s economic interest both in the Mbila and Kangwane project areas in South Africa.

 

Source: Company announcement

 

The company said the transaction will also allow it the opportunity to target both the domestic and export anthracite markets via multiple port and transport alternatives.

“The agreement with York is very exciting for the company as the York projects are well understood by ZYL and provide significant strategic synergies with our existing operations,” ZYL chief executive officer Ian Benning said in the company’s announcement to the Australian Securities Exchange.

“The Transaction consolidates ZYL’s position within both the South African and international anthracite markets.

“ZYL will have a well-balanced pool of assets at various stages along the exploration and development value curve, allowing for the scheduling of development based on market demands.”

ZYL said it is now in a position to produce a diverse range of coal products, catering for a greater number of consumers and increasing flexibility in terms of both mine gate sales and export options.
 
The company said it had received much interest for its product from both the Mbila and Kangwane projects, which warranted pursuing increased anthracite holdings within South Africa.

ZYL considers the acquisition of York provides that opportunity.

ZYL has already received non-binding Expressions of Interest (EOIs) from customers for over four million tonnes per annum, which exceeds the forecast full saleable production from both its Mbila and Kangwane projects.

“The Transaction will provide a solid combination of both greenfields and brownfields assets with significant upside potential,” Benning said.