20th May 2016 09:37
LONDON (Alliance News) - Kibo Mining PLC Friday said it has drawndown another tranche from its loan facility, resulting in the company issuing more shares to its lender in return.
Kibo has decided to drawdown a third tranche from the GBP1.5 million facility that was secured from Sanderson Capital Partners Ltd back in early March, swapping 1.2 million shares for the tranche totalling GBP300,000.
That calculates to a price equal to 3.95 pence per share, which is 4.1% lower than Kibo's closing share price on Thursday.
However, Kibo has also issued further shares to Sanderson covering a portion of the second tranche that was drawndown to make up for a shortfall.
Kibo has to pay a drawdown fee to Sanderson each time it decides to utilise a new tranche and settles that by issuing 1.2 million shares to Sanderson for each tranche, as demonstrated by the third tranche drawndown on Friday.
However, the shares issued to settle the fees are expected to be within a range of 4.0 to 5.0 pence, and when Kibo Mining obtained the second tranche back in April its share price was outside of that range.
As a result, the 1.2 million shares issued in early April to cover the drawdown fee had a lower value than expected. To settle the GBP51,000 shortfall, Kibo Friday said it has issued 220,851 shares to Sanderson at an effective price of 4.3 pence to settle that shortfall related to the second drawdown.
Notably, as the shares that were issued on Friday to cover the fee for the third drawdown averaged a price below 4.0 pence, it is likely that Kibo may have to settle another shortfall in the future.
Kibo shares were up 2.4% to 4.35 pence per share on Friday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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