Under the terms of the settlement, which Zyl outlined in a statement, a placement of 68 million shares to Chinese vendor Prestige Glory will be undertaken at $0.02 to raise $1.4 million.

Prestige Glory will also undertake an underwritten non-renounceable rights issue, through a prospectus issue, on the basis of at least one Zyl share for every two Zyl shares held at the record date at a minimum issue price of $0.02 per share.

Prestige Glory will fully underwrite the rights issue or procure that the rights issue is fully underwritten. The issue will raise a minimum of $5.6 million net of costs.

The maturity of the existing bridging facility has been extended for a further six months, until September 30, 2013.

In addition, Zyl has commenced discussions to extend the facility from $2 million to $3 million.

The company plans to raise further capital to repay the bridging facility using the proceeds of convertible notes. It is proposed that 60 convertible notes be issued, each with a face value of at least $100,000, to raise $6 million.

Zyl said that as part of the recapitalization, Prestige Glory will, on a best endeavours basis, seek to subscribe for 100% of the convertible notes.

Following completion of the placement, the rights issue and the convertible notes, the company will have raised about $13 million and the Mbila vendors and Prestige Glory will hold approximately 35% and 21%, respectively, of the issued share capital of Zyl.

Prestige Glory can increase its shareholding to approximately 34% should it take up all of the shares to be issued.

The negotiations also change Zyl’s project ownership. The company will now own 50.1% of the Kangwane Central Project, 50.1% of the Kangwane North Project, 70% of the Kangwane South Project and 74% of the Mbila Project.

The company also announced that non-executive chairman Glenn Whiddon had resigned from the board.

Zyl said it had proposed that a representative of Prestige Glory be appointed to the board as his replacement.

John Beck, a senior South African businessman, will become a consultant to Zyl. Beck’s involvement with Zyl will facilitate the development process and provide access to otherwise unavailable opportunities.

The Mbila project, situated in South Africa’s KwaZulu region near Richards Bay terminal, comprises a 19,000 hectare mining right area and a 53,000ha prospecting area.

Last October, Zyl announced it would be expanding the scope of its feasibility study for Mbila following provision of $18 million in funding from an unnamed investor.

In November, the company said the transaction had been put on hold until “engagements with the vendors are concluded”

Zyl renegotiated the payment terms of the acquisition with the projects vendors so the two payments to secure 51% ownership totalling $13.6 million would be due no later than December 31, 2012. But in January 2013, Zyl released a statement asserting it did not consider itself bound by the agreement and that “consequently no further payment in terms of the agreement are to be made”

In February, the company initiated dispute resolution and released a statement to ASX.

“The company has advised the vendors that it does not accept the position of the vendors and that it maintains its position that the Mbila agreement has lapsed and that consequently it is not bound thereby,” the company said in the statement.