The funding deal provides interest free cash for a fixed term, until August 31, and it supports the group’s efforts to complete a definitive feasibility study for the proposed Mbeya coal-to-power project (MCPP) in Tanzania.
Louis Coetzee, Kibo chief executive, highlighted that the Sanderson deal gives Kibo adequate funding to focus on the project, but, also lets it retain flexibility to investigate additional or alternative sources of funding.
“With this funding in place, we can focus our attention on an exciting six months ahead to prove and deliver the MCPP as a project with solid, robust bankable credentials," Coetzee said.
He added: "The MCPP is progressing at an expeditious pace.
“We are now only a few months away from expected completion of the definitive feasibility studies for both the mining and power elements of the MCPP and at an advanced stage with the MCPP commercial arrangements and agreements.”
Although the Sanderson facility doesn’t carry interest, it is subject to certain fees. Kibo will initially pay an arrangement fee and it will pay £51,000 for each of the five envisaged £300,000 draw-downs.
The draw-down fees will be paid in shares, with 1.18mln new shares issued at a time.
Additionally, Kibo has to pay £75,000, as a 5% corporate advisory fee, to its broker Beaufort Securities. This will also be paid in cash.