ZYL has proposed a series of transactions that will lead to the settlement of all legal issues and the raising of sufficient capital to fund ongoing development. This will result in a trebling of issued capital and a total capital raising of $13 million (AUD) over the next year or so.

While this is a substantial dilution, the company does have a very robust asset base that should lead to substantial share price appreciation as the various projects are developed. The future capital structure is shown below.

The proposed capital raisings are shown below, with the placement having already been completed. The Kangwane Central and Kangwane North shares will be issued to complete the relevant transactions and for associated fees. The shares issued for the Convertible Notes assumes a conversion at a fixed $0.03 per share.

The “Market Cap” equivalent is intended to show the effect of the various share issues on the market capitalisation of the company. Thus, upon completion the company would have a market capitalisation of $34 million at $0.02 per share.

If one subtracts the $13 million in capital raised, we would have an “enterprise value” equivalent of $21 million. Not much, compared with the net present value of the Kangwane Central project of $144 million (ASX release 30 November 2012), and this is only one of several anthracite projects owned by ZYL.

Capital   Structure
No Shares Price “Market Cap Equiv” Percent
Today 561,667,899 $0.02 11,233,358 33%
Rights issue 280,833,950 $0.02 5,616,679 16%
Kangwane C. 42,000,000 $0.02 840,000 2%
Kangwane N. 35,000,000 $0.02 700,000 2%
C Note Exercise 200,000,000 $0.02 4,000,000 12%
Vendors 602,808,688 $0.02 12,056,174 35%
Total 1,722,310,537 34,446,211 100%
Capital Raisings
Placement (complete)


Rights Issue


Convertible Note






Disclosure: Market Capital holds securities in ZYL Ltd as at the date of publication of this article.