Four convertible notes, each with a value of $250,000, will be available to the company in four tranches, the first available immediately. The following tranches will be available in October and December, with the final one in February next year.

All tranches of payments for the convertible notes, other than the first tranche, are subject to Zyl acquiring at least a 50.1% interest in the Kangwane Central Project. Zyl continues to hold a 42.86% interest in the project.

Following this, Prestige Glory must procure an extension of the bridging facility between ZYL and Prestige Glory until September 30, 2014.

"The investment by Finevest in ZYL is seen as an extremely positive development,” non-executive chairman Yuzheng Xie said in a statement.

“The funds provided by way of the convertible notes will provide valuable working capital to ZYL, whose primary goal is to advance the Kangwane Central anthracite project towards development.

“Finevest recognize the strategic significance of the Kangwane asset and their experience in the resources sector will be invaluable to ZYL as we move forward."

Under the MOU, Zyl has agreed to undertake a non-renounceable pro-rata rights issue on a one-for-1.5 basis at $0.005 per share, fully underwritten by Finevest, which will receive a 5% commission on the amount underwritten.

Zyl has agreed to pay $500,000 of the facility within five business days following conclusion of the rights issue.

If Finevest does not obtain 50.1% of the issued capital of Zyl following the completion of the rights issue, it has a “top-up right” to subscribe to enough shares to take it to 50.1%.

Finevest will also have the right, but not obligation, to nominate directors to the board of ZYL

equal to its percentage shareholding.

Zyl said that it would seek to obtain the necessary shareholder approvals required for the conversion of the convertible notes into shares, for Finevest to fully underwrite the rights issue and for Finevest to exercise the top-up right by October 31.

Finevest is an investment company, with money in diversified sectors including energy resources and telecoms in South Africa, Australia and other countries.

It has existing coal investments and relationships in the South African resources sector that it wishes to leverage by developing the assets of Zyl.