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

some fairly aggressive buying today moving in the right direction.

September 01, 2010
Kenmare Steadies The Ship At Moma, And Is Now Within Sight Of A 10 Per Cent Market Share In The Production Of Titanium Feedstock

By Alastair Ford

This years a happier year than last year, thats for sure. So says Michael Carvill, managing director of Kenmare Resources, and given the bumps and scrapes that Kenmare incurred last year, its hard to disagree. Back in 2009, when markets were on the floor, Kenmare needed additional working capital to help it overcome teething issues with the start up of production at its Moma mineral sands mine in Mozambique. Market conditions being what they were, it was forced to offer equity at a heavy discount, and needless to say, existing shareholders werent exactly thrilled. But there was precious little choice, and, once the money was in, the company sorted out its issues with its plant and its contractors, fired up the Moma plant and started producing.

Then in March of this year, a second, far more substantial offering was made, also at a significant discount, and this time the shares were really hammered. On news that Kenmare planned to raise just under 180 million gross at a price of 12p per share, the companys shares dropped from 23p to just a whisker above the placing price. Again, existing shareholders werent delighted, but back in March the equity markets werent a whole lot friendlier than they were last year. Theyre not that friendly now. Still, after a wait that in total amounts to much, much more than a decade, Kenmare has finally got Moma up and running, and, with the new cash in the bank, is already looking at a major expansion. All told, that's not a bad result.

It may take a little while for all the dust that was thrown up in 2009 and earlier this year to settle. But, at the current price of 18p, the shares are at least starting to perk up again, helped along by a reasonably positive set of interim results put out by Kenmare at the end of August, which showed production coming along very nicely indeed. Were now operating at 100 per cent of nameplate capacity in terms of ilmenite production, says Michael, 90 per cent in terms of zircon, and 60 per cent of rutile. But then rutile always was the laggard of the pack, the runt of the litter. Its the ilmenite and the zircon that will make the running for now, generating the bulk of the US$40 million revenue that Kenmare booked in the first half. That number stacks up well against the US$26 million in sales that the company reported for the whole of 2009, and shows just how well things have progressed. The sting behind that number, though, is that cost of sales rang in at a whopping US$41 million, so operating profits are still some way off. Having said that, though, this time round Kenmare was actually able to book a US$21 million foreign exchange gain, which meant, for any bean counters out there, that at the bottom line the company was at least in the black.

And Michael Carvill is confident that the only way forward for Kenmare now is onwards and upwards. Production at site is going well, he says. The market has improved and is ready to take all our product. Weve fixed our production issues, and we believe that Moma has turned a corner in terms of production. The question now is whether the company can make a meaningful profit, and for that the pricing of ilmenite, zircon and rutile needs to continue to move in its favour. The current dynamic is indeed favourable, as Chinese demand is increasing by 16 per cent per year, according to numbers cited by Michael, but there are several other variables to consider too. Its an industry which is in a state of flux, says Michael. Historically its been a closely held oligopoly, made up of Anglo, Rio Tinto, and Iluka. Thats changed now that Exxaro has taken over from Anglo, Rio has issues in South Africa with electricity costs, and Iluka is concentrating on zircon. So none of the old truisms hold true for the next ten years.

What remains beyond doubt is that Kenmare has a huge resource available to it at Moma, and it now has the ability to exploit it. On current plans the company will increase production from 800,000 tonnes per year to 1.2 million tonnes, or 10 per cent of world titanium feedstock supply and six per cent of world zircon supply. That production upgrade should be completed within about 18 months time, and once thats bedded down a further production upgrade is on the cards. And why not? As Michael says, theres 200 years of supply in this mine, and weve now got a facility in place on an excellent orebody. He then adds perhaps the most important statement of all: were seeing steady increases in prices. Clearly itd be better if prices were even higher, but with other mineral sands operations in South Africa grappling with cost issues, as the global economy continues to recover from the 2008 crash Kenmare should be well positioned to step in and meet the increased demand.

http://www.minesite.com/nc/minews/singlenews/article/kenmare-steadies-the-ship-at-moma-and-is-now-within-sight-of-a-10-per-cent-market-share-in-the-prod/1.html

RNS Blackrock increases shareholding to 6.09%

Daily Mail,Saturday, Sept.4th. Broker BUYS.KENMARE RESOURCES.Canaccord says buy at 19p. The stock has genuine unstoppable momentum.

An 18% drop after the following bit of news.

Kenmare Resources
Doc re. Settling Pond Breach at Moma Mine
Kenmare Resources plc ("Kenmare" or "the Company")
8(th) October, 2010
Settling Pond Breach at Moma Mine
At approximately 2am today (Friday, 8(th) October), a settling pond adjacent to
the Moma Mine breached its southern wall. This caused a non-toxic discharge of
water, sand and clay that flowed through part of the nearby village of Topuito.
A full scale search is currently underway for a 4 year old girl, who has been
missing from the village since the incident.
The priority for Kenmare, the local community and Government is the search for
the missing child and moving those people affected by the discharge to other
parts of the village and to temporary accommodation provided by Kenmare.
The Kenmare Moma Incident Management Team was immediately mobilised by Jacob
Deysel, Kenmare Operations Director, who is at the Moma Mine. The Kenmare team,
local community and Government officials are working together to locate the
missing child, make the area safe, assist with evacuation of the affected
population and assess any possible injuries or damage caused. It is believed
that approximately 115 households have been impacted by the flow of water, sand
and clay.
Mining operations have been suspended for the moment and restoration work has
already commenced at the village of Topuito.
Mining at Moma is undertaken using two dredges and a floating concentrator
plant. Once the minerals are extracted, sand and clay tailings are deposited
behind the plant through a series of settling ponds. A containment wall on one
of these settling ponds failed during the early hours of the morning.
Kenmare has always regarded the health and safety of the community and its
employees as its highest priority and is treating this incident with the utmost
seriousness.
Managing Director, Michael Carvill, is en route to Moma and will arrive there
later today. Speaking en route to Moma, Michael Carvill said: "Everything will
be done to locate the missing child and to relocate and support the individuals
affected by the incident. Kenmare will fully investigate the incident and will
also co-operate with the authorities in this regard."
A full assessment is in progress and updates will be issued as new information
becomes available.

After all the disapointments are we in the money ? .

I should say! Nearly double since early October

SP down today. More litigation on the way? Article on Kenmare Resources in the Irishtimes.com today

Thanks for the info., Learner. Had a stella run lately, so maybe a little top heavy. Down today like a lot of resource cos., though the litagation is a little worrying. 10 million? but could take many months.

i wonder if the litigation issue is now settled

Kenmare Resources - Buy at 48 p - the fall yesterday is likely profit taking after a strong run. But, the City remains very positive for the group's prospects. Obviously, after a strong run investors may want to top slice and sell half of their holding, but Questor's rating remains buy. - Questor

Interim results yesterday and shares often fall a little, even if they are good as in kenmares case. Due a 10p jump in price anytime shortly.

look at the market cap and then decide whether you can take the risk of investing in mozambique.

Just made a sizeable investment in these today @ 41.33

Kenmare Resources soared into the top spot on rumours it had placed a multi-million rand order for 32 pumps to aid the expansion of its Moma Titanium Mine in Mozambique.

The expansion, which will increase the size of the plant by 50%, is set to reach completion by the first quarter of next year, according to dredgingtoday.com.

Good start for KMR today , 45.33
+2.63 (+6.16%)

I bought a shed load of KMR @ 41.33 last week , Kenmare is also benefiting from rumours that sector peer Sierra Rutile had pre-sold its entire production capacity for the first few months of 2012.

And a bid coming from the Chinese who have invested heavily in Mozambique is a possibility.

Very good morning for KMR today , watch for profit taking @ 55p

Kenmare Resources (Irish: JEV.IR - news) 48.92p Questor says BUY

Cynics may argue that “they would say that” since RBC is the company’s broker, but Questor also toyed with naming the company as one of the tips of 2012.

That’s because of a supply crunch in the commodity it produces and its 50pc expansion projects will be completed later this year, probably in the third quarter.

The company operates the Moma titanium mine in Mozambique.

Approximately 5m tonnes of titanium dioxide are consumed each year worldwide, mainly in the coatings, plastics and paper industries, and there is insufficient new production of the mineral sands when compared with the potential demand.

The paint used on aeroplanes contains titanium, so large new airline orders for aircraft such as the Boeing Dreamliner are also boosting demand for titanium alloys.

The main mineral sources of the metal oxide are the minerals ilmenite and rutile, but Kenmare also produces zircon, which is a high-value product.

Logistically, the operation is sound. The mine is located on the coast and the company has its own port for offloading the product. Mining (Euronext: SMI.NX - news) of the mineral sand is also relatively low cost as it is done by dredging.

Prices for titanium are expected to rise this year, despite some softening of demand in the fourth quarter.

Larger Australian peer Iluka has said that it will be selling titanium dioxide at prices in the first half of 2012 at prices that are 100pc to 145pc more than 2011 averages. Prices of zircon are expected to be about 30pc higher, it said.

There has also been some softening of demand in China, especially for zircon which is used in ceramic tiles. However, the supply- side dynamics remain fairly sound.

Kenmare itself is seeing legacy contracts come to an end, so it can lock in these higher prices when new contracts are negotiated. There is also talk of a further expansion once the current one is completed in the third quarter of this year.

The shares are trading on a December 2012 earnings multiple of 8.7, falling to just 5.1 in 2013.

The shares are up an impressive 161pc since being tipped on September 5 2010 at 18¾p, compared with a FTSE 100 (Euronext: VFTSE.NX - news) up 4pc. Questor feels there is much further to go. Obviously, after such a strong run, some investors may want to top-slice this investment and sell half of their holding, but Questor’s rating on the shares remains buy.

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Last week, Canadian bank RBC (MCX: RBCI.ME - news) named FTSE 250 (FTSE: ^FTMC - news) titanium miner Kenmare one of its top picks of 2012, with a price target of 90p a share.

Kenmare Resources (Irish: JEV.IR - news) 48.92p Questor says BUY

Cynics may argue that “they would say that” since RBC is the company’s broker, but Questor also toyed with naming the company as one of the tips of 2012.

That’s because of a supply crunch in the commodity it produces and its 50pc expansion projects will be completed later this year, probably in the third quarter.

The company operates the Moma titanium mine in Mozambique.

Approximately 5m tonnes of titanium dioxide are consumed each year worldwide, mainly in the coatings, plastics and paper industries, and there is insufficient new production of the mineral sands when compared with the potential demand.

The paint used on aeroplanes contains titanium, so large new airline orders for aircraft such as the Boeing Dreamliner are also boosting demand for titanium alloys.

The main mineral sources of the metal oxide are the minerals ilmenite and rutile, but Kenmare also produces zircon, which is a high-value product.

Logistically, the operation is sound. The mine is located on the coast and the company has its own port for offloading the product. Mining (Euronext: SMI.NX - news) of the mineral sand is also relatively low cost as it is done by dredging.

Prices for titanium are expected to rise this year, despite some softening of demand in the fourth quarter.

Larger Australian peer Iluka has said that it will be selling titanium dioxide at prices in the first half of 2012 at prices that are 100pc to 145pc more than 2011 averages. Prices of zircon are expected to be about 30pc higher, it said.

There has also been some softening of demand in China, especially for zircon which is used in ceramic tiles. However, the supply- side dynamics remain fairly sound.

Kenmare itself is seeing legacy contracts come to an end, so it can lock in these higher prices when new contracts are negotiated. There is also talk of a further expansion once the current one is completed in the third quarter of this year.

The shares are trading on a December 2012 earnings multiple of 8.7, falling to just 5.1 in 2013.

The shares are up an impressive 161pc since being tipped on September 5 2010 at 18¾p, compared with a FTSE 100 (Euronext: VFTSE.NX - news) up 4pc. Questor feels there is much further to go. Obviously, after such a strong run, some investors may want to top-slice this investment and sell half of their holding, but Questor’s rating on the shares remains buy.

Greggs (Other OTC: GGGSF.PK - news) 510.5p Questor says HOLD

Not all High Street (BSE: HIGHSTREE.BO - news) operators had a terrible Christmas and bakery chain Greggs is one of them.

In the five weeks to January 7, like-for-like sales were up 5.1pc, with total sales rising 10.8pc. For the full-year, same-store sales rose 1.4pc and total sales were up 5.8pc. This was ahead of analysts’ expectations after the company said it expected the number would be “marginally positive”.

In total, a net 84 new stores were opened, bringing the estate to 1,571 stores, with 90 openings expected in 2012.

The shares are trading on a December 2012 earnings multiple of 13.4 times, falling to 12.2 next year.

The valuation is supported by the dividend, with the shares yielding a prospective 3.7pc, rising to 4.1pc next year. The company has increased its dividend payments every year for the past 26 years.

The shares were first tipped on August 12 2009 at 400p and are now 28pc ahead, compared with a market up 19pc.

The company has proved that it can still grow in difficult times by introducing new product ranges such as porridge.

The shares are below their peak of 550½p in July, but they are now a hold given the market backdrop.

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