From the FT on the 19th June

http://search.ft.com/search/article.html?id=040619001094&query=kenmare&vsc_appId=totalSearch&state=Form

COMPANIES UK & IRELAND: Kenmare negotiates $269m loan
By John Murray Brown
Financial Times; Jun 19, 2004



One of the largest debt financings for an independent mining company was announced yesterday when Kenmare Resources agreed a $269m (146.5m) facility to develop the Moma titanium mine in Mozambique.

Drawdown of the debt is contingent on the Irish company raising equity of $79m, lifting the value of the project to $345m.

The company already has commitments of $55m from a number of large investment funds.

Documents will be posted to shareholders on Monday for an open offer to raise up to $42m.

A banker at NM Rothschild, lead advisers on the financing, said the debt package represented three times Kenmare's market capitalisation of $90m.

"I do not think there have been any listed mining companies who have done that," he said.

Among the lenders, the African Development Bank is lending $40m and the European Investment Bank $15m in senior debt and a $40m subordinated loan, reflecting the vital economic benefits to what is the poorest region of one of Africa's poorest countries.

Martin Curwen, of the EIB, said this was the first deal signed under the 2000 Cotonou agreement between the EU and African, Caribbean and Pacific countries.

He said EIB's presence would "provide comfort" to other lenders. "It is part of our mandate to support projects where the funding would not have been available from the financial markets," he said at yesterday's signing ceremony, attended by Castigo Langa, Mozambique's minister of mineral resources and energy.

KFW, the German development finance institution, is providing $50m, partly tied to the supply of electrical equipment by Siemens.

The Dutch development agency FMO is lending $15m. The only commercial bank involved is ABSA, the South African bank, which is lending $80m to support the purchase of South African goods and services by the mine.

The mine is expected to be in production in the second half of 2006, with annual output of 600,000 tonnes of ilmenite and other titanium minerals that supplies white pigment used in paint and toothpaste.

The company has already raised 4m to purchase a mineral separation plant in Western Australia, which is being dismantled and shipped to the site.

At full production, the mine will account for about 5 per cent of world supply. About two-thirds of world production is controlled by RTZ and Iluka, an Australian company spun out of the old Rennison Goldfields.

FT Comment

* There have been similar financings in the minerals sector but never where the borrowing is three times the borrower's market valuation. The Lihir gold project in Papua New Guinea raised $300m in 1995 but lenders had the comfort that Rio Tinto Zinc owned about 40 per cent of the company. Kenmare's project is 100 per cent-owned by Kenmare, a company that has no cash flow and would have reported a small loss of $40,000 last year but for interest on its bank deposits. This project clearly could transform its fortunes. There are offtake agreements in place for more than half the first five years' production with Dupont and Mitsui. Prices for mineral sands tend to be more stable than base metals, which behave more like a commodity dependent on capital goods demand. The current market cap is little more than the value of a year's production from the mine. An upgrade seems inevitable. Canaccord, the company's broker, has a current price target of 35p. This compares with a close of 17p, down 2p yesterday.


Copyright The Financial Times Ltd

has prudential sold shares?

no bought them

why the drop ?

Simple, management incompentence.

Are we going under?.

anyone know if the placing of 51 million shares on 29/8/o8 at 32p was successful?

"THE MARKET FOR ALL OUR PRODUCTS CONTINUES TO STRENGTHEN"--------THE LIFE OF THE MINE IS OVER 100 YEARS-----interim report 29/08/08. after looking in depth at the interim report the whole financial success of the mine now depends on the production ramp up to the target level of 66,000 tons of product per month by june 09 ( otherwise covenants will be broken).this had been expected much earlier.Production has been,april---12,000 tonnes,may---20,000 tonnes,june---31,000 tonnes,july---28,000 tonnes with a 7 day shutdown for remedial works.

Share price continues to weaken now 25p.

humpback please advise me where you read we have until June 09 to hit the magical 66kt pm. as i've obviously missed it.

note 7. bank loans. interim report.

minesite update this week says price of Zircon continuing to strengthen - if only we could produce some!

Thats better.todays statement said that funds had been raised at 32p per share,production was 27% higher,( by my calcalation about 50,000 tonnes plus per month )and no known reason for share price decline. In my opinion this is just a share that is out of favour like many many others.

Not 50kt, best month June @ 31kt + 27% = 40kt. still plenty to do but encouraging. The web cast planned with Carvill should be enlightening if the right questions are posed.

Best month july@ 28kt+7day shutdown would have been 36kt+27%= 45kt+ongoing daily added percentage ramp up production could possibly bring this to near 50kt if not this month,or the very near future, assuming no shutdowns.I would be grateful for any information from the web cast

New photos on web site.Share price devastated like many others,now 13p.Huge disappointment.

Good production statement today

New article, click HERE

huumpback - lousy production statement today. They will never make 66kT per month by December. No de-ramp intended, but face facts.

stockdog - why December?

comment on earlier post also
All you say humpback321, may be true, although it smacks of Company puff. The words "...ramp up...production...covenants broken..."
-may also be true, but is NOT the same as fact. We are in a World-wide recession and where is this "extra" production going? Whilst it's not a "new" product, so it requires no expensive "marketing" - but the World does not have a shortage-demand for this material - whatever is currently being used will reduce - and- no amount of "covenants" will change that.
These inescapable facts are the reason for the sp slide and then there is "Debt" - -or-is this about the only company that has funded its operations to date? I doubt it.......Also, look at the history of this Irish stock . . .. years-and-years-and . . . . still we wait....bargepoles IMHO....currently 11p oh dear.
(-If it's any comfort, I have a few stocks in the same position!)
EDIT (20Dec08):- Dir buys 1m @8p, currently 7.9p for us Retail investors - (down 10% today) - - & I don't see folks filling their boots...