Kibo Mining Plc said Dec. 21 that it entered into a binding term sheet with Sanderson Capital Partners Ltd. for a new US$2.9 million forward payment facility to be paid in five tranches until June 2017.

The facility has an effect of forward selling the receivable at a 20% discount.

This new facility will be advanced as part of the US$3.7 million development cost recovery, payable to the company from SEPCO III on achieving financial close of the Mbeya coal-to-power project.

Kibo will issue new ordinary shares to Sanderson to the value of US$732,036 in 30 days, while Sanderson will also have the right to convert up to £1.5 million of the amount drawn down on the facility into Kibo shares.

In March, the company raised £1.5 million through an interest-free loan arrangement with Sanderson to complete a definitive feasibility study for the proposed Mbeya project.

CEO Louis Coetzee said the funds will allow the company to focus time and energy on bringing the project to a financial close as early as possible in 2017, as well as concluding the transaction with Opera Investments Plc and completing the planned feasibility work on the Imweru gold project as scheduled.