JOHANNESBURG (miningweekly.com) – AltX- and Aim-listed Kibo Mining has renegotiated terms for the payback of a £1.5-million loan facility provided by asset management group Sanderson Capital Partners, giving Sanderson a stake in the Mbeya coal-to-power project.
While Kibo was required to pay back the loan in either cash or shares by August 31, Sanderson will instead convert the loan into a 2.5% equity interest in Mbeya Development Company, which is a 100% subsidiary of Kibo, by September 14.
In addition, Kibo will issue £150 000 in ordinary shares to Sanderson as a loan conversion fee.
Sanderson will also grant Kibo access to a new £600 000 standby loan facility until February 28, 2017.
"We are pleased with the renegotiated settlement terms for the Sanderson loan facility. This will relieve pressure on our working capital position and significantly enhance our ability to expedite the remaining Mbeya project development work. It also avoids further dilution in Kibo's equity as a consequence of costs incurred in the development of the project,” said CEO Louis Coetzee.
The renegotiated settlement terms for the facility also set the first independent baseline for the current value of the Mbeya project and mark the first direct equity investment in the project.
“Following the announcement of our renegotiated agreement with China-based contractor Sepco III, we believe this represents another significant endorsement of the financial viability of the Mbeya coal-to-power project and [that it] will further bolster confidence in the project as we move towards financial close,” added Coetzee.