Kibo Mining PLC (LON:KIBO), the Tanzania-focused mineral exploration and development company, has agreed a financing deal with Sanderson Capital.
Sanderson will provide US$2.94mln in cash in five tranches between now and June of next year.
See Kibo Mining to receive US$5.5mln for Mbeya development work
The facility will tide Kibo over until it receives the US$3.67mln development cost recovery from SEPCO III, which it will receive on achieving financial close of the Mbeya coal-to-power project (MCPP).
Kibo will issue shares to Sanderson to the value of US$732,036, which is the difference between the amount Kibo is due from SEPCO and the cash Sanderson is providing.
Kibo will repay to Sanderson the amounts drawn down on the facility on receipt of the funds it is due from SEPCO III.
In addition, Kibo will also pay a corporate advisory fee of £71,442 to Beaufort Securities to be satisfied through the issue of 1.02mln shares.
"We are pleased with the facility that was agreed with Sanderson, which allows us to create short to medium term funding certainty in a market that remains challenging for capital raising. It also provides Kibo with a creative way of leveraging the deferred SEPCO III payment and provides a funding solution with minimal dilution to shareholders,” said Louis Coetzee, chief executive officer of Kibo.
The company is currently working on a reverse takeover of Opera Investments that will see the gold deposits at Imweru and Lubando reversed into the AIM-listed shell company.
“The funds which have been made available will satisfy the company's cash requirements for a significant time, allowing management to focus all their time and energy on bringing the MCPP to a successful financial close as early as possible in 2017, as well as concluding the Opera transaction and complete the planned feasibility work on the Imweru gold project as scheduled," Coetzee said.
Shares in Kibo were down 0.68p at 6.44p in mid-morning trading.