Shares in coal miner ZYL have jumped after it announced an $18 million financing arrangement for its Mbila and Kangwane Central projects in South Africa.
Perth-based ZYL announced today it had finalised an $18 million, 35-month convertible note with an unnamed investor, with the loan to be provided by Chinese bank based in Australia,
Formal agreements are expected to be announced shortly, ZYL said.
The facility comprises of a convertible note term sheet, which ZYL said would allow it to finalise bankable feasibility studies for the Mbila and Kangwane projects, increase its stake in Mbila to 74 per cent and provide additional working capital.
The convertible note has a 12 per cent interest rate, with the notes convertible at a 15 per cent discount to ZYL's 20 day volume weighted average price.
A $2 million, one month bridging facility will be provided to ZYL within a month, the company said.
The bridging facility is part of the larger $18 million package.
At 12:45PM, WST, ZYL shares were up 11.1 per cent, trading at 10 cents.
"We are delighted with the financing and the support provided through this financing," chief executive Ian Benning said.
"We see this as a major milestone in the advancement of our two principal assets going forward, the Mbila and Kangwane Central projects.
"Having both bankable feasibility studies complete and a majority interest in our key projects will elevate ZYL to the next level in its project development pathway."